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 SKETCH 
 
 CAUSES OF THE ADVANCE AND DECLINE 
 
 NATIONS-, 
 
 WITH STRICTURES ON 
 SYSTEMS OF FINANCE, 
 
 PARTICULARLY APPLIED TO THOSE OF 
 
 FRANCE 
 
 AND 
 
 GREAT BRITAIN. 
 
 JLOtttHHU 
 
 PRINTED FOR THE AUTHOR, 
 
 And sold by J. Johnson, St. Paul's-Church-yard; and 
 
 Darton and Harvey, Gracechurch Street, 
 
 M,DCC,xr.r.
 
 \^1 
 
 V. 
 
 ADVERTISEMENT. 
 
 X ROM a conviction that it would be 
 highly culpable, to delay giving any in- 
 formation on a fubjecl, which the prefent 
 afpecl of public affairs renders more than 
 commonly interefting; and which certain 
 circumftances prevent me from entering 
 into fo fully as I had originally intended, 
 or as its nature and importance demand; 
 I have, in the following Sketch, attempted 
 a difcufhonof its firft principles: further 
 illuftrations of which, with thofe parts of 
 the fubjecl which have been unavoidably 
 omitted, I propofe laying before the 
 public at a future period. 
 
 THE AUTHOR. 

 
 SKETCH, &c, 
 
 CHAP. I. 
 
 Introduttion. 
 
 ALTHOUGH every fpecies of inequality 
 were unknown to men, in the early peri- 
 ods of fociety, yet in its progrefs towards civiliz- 
 ation, in which the appropriation of lands and 
 the partial accumulation of riches take place, 
 we fhould difcover the foundation of new and 
 extraordinary changes, the difference of riches 
 would begin to mark the difference of rank ; by 
 degrees, we fhould fee different orders eftablifh- 
 ed, and at length completely formed the com- 
 plicated mafs, which fociety at this moment 
 prefents, in the civilized countries of the earth. 
 
 In this Mate of fociety, we difcover that rela- 
 tion between the individual and the community, 
 from whence arifes the union of interefts and 
 exertions, by which the wants and defires of 
 men are more abundantly fupplied. But in this 
 ftate, the proportion of the annual produce, 
 which each individual enjoys, is by no means 
 B regulated
 
 .( 2 ) 
 
 regulated by the degree of his induflry or abili- 
 ty ; as riches, while they remove the neceffity of 
 application, fecure to their owner a much larger 
 proportion of it. 
 
 To fhew the nature of the circumftances ne- 
 cefTary to this extraordinary production ; and 
 of riches, which give to many fo large a part of 
 it; together with the order of its distribution, 
 which would take place in the natural flate of 
 things; and that moft confident with the general 
 good of fociety, is the obje£t of this work. 
 
 As our judgement of the other parts of this 
 fubjeft mull be founded on the knowledge of 
 the nature of ftock, it, in the natural order, falls 
 firft under confideration. 
 
 CHAP. II. 
 
 Stock. 
 
 JL HE whole of the ftock of the fociety is en- 
 gaged in the three following employments; manu- 
 facturing, farming and mercantile ; into one or 
 other of which every poffible manner of employ- 
 ing ftock may be reduced. Under the title of 
 manufacturing ftock, we include the whole of 
 that employed with the afliftance of workmen, in 
 the production of commodities, either directly, 
 or in thofe employments which are neceflary to 
 
 others,
 
 ( 3 ) 
 
 Others, and of which they may be efteemed a 
 branch. In the order of merchants, we include 
 all thofe who purchafe goods for the purpofe of 
 difpofing of them, and (lock thus employed we 
 fhall call mercantile flock. 
 
 The confideration of the nature and ufes of 
 thefe three divifions of ftock, will divide this 
 chapter into three parts. 
 
 PART I. 
 
 MANUFACTURING STOCK. 
 
 In the employments of men in civilized focie- 
 ty, two circumftances are particularly to be 
 remarked; lft, That in very few cafes labour is 
 left unaflifted; and 2d, that in no inftance, the im- 
 mediate productions of the workman are the re- 
 wards of his labour. In molt cafes alfo, before a 
 commodity can be fitted for ufe, a very confider- 
 able time muft elapfe. In the mean time, the 
 workmen muft be fupported. Thefe circum- 
 ftances point out the two neceffary divifions of 
 ftock in every manufacturing employment. The 
 firft, called the fixed capital, and confifting of 
 machines and other contrivances, for abridging 
 labour. The fecond, called the circulating, which 
 provides the wages of the workmen, and the 
 raw materials on which they are employed, to- 
 gether with the fubfiftence of the manufacturer, 
 B 2 until
 
 ( 4 ) 
 
 until the commodities, on which his workmen are 
 employed, can be difpofed of. 
 
 The expences of the manufacturer, in erecting 
 works, Sec: are repaid, by being enabled to fave 
 an equivalent in the production of his manufac- 
 tures; as, by their afliftance, he may be enabled 
 to produce a certain quantity of goods, with a 
 proportionally fmaller number of workmen; and 
 thus fave the whole amount of the difference of 
 wages. 
 
 Improvements in the manufacturing art are, in- 
 general, made with fo much judgement, as not 
 only to repay the manufacturer every expence, 
 but alfo to enable him to fell his produ6tions at 
 a considerably lower price, than thofe produced 
 the ordinary way. As long as he can conceal 
 the improvement, his profits are confiderably 
 augmented. In fome cafes, the advantages arif- 
 ing from fuch improvements are fecured, by 
 patents, to the inventor for a certain time. This, 
 independently of the encouragement which it 
 very properly gives to ingenious men, is, in an- 
 other point of view, no more than juftice ; as it 
 feldom happens, that a man, at the firft attempt, 
 can put his ideas into execution, without com- 
 mitting fome miftakes. If, therefore, he were 
 not fecured for fome time in the advantages arif- 
 ing from his difcoveries, it would often happen, 
 that in ferving the public he would fufFer mate- 
 rially ;
 
 ( 5 ) 
 
 rially ; as others would profit by his failures. 
 Improvements are often of a kind which mufl 
 be concealed, in order that the advantages arif- 
 ing from them may be txclufively enjoyed by 
 the inventor : of this kind me may confider im- 
 provements in the art of dying, &c. &c. The 
 public, however, muft, in the end, gain by all im- 
 provements, either on the expiration of the time 
 for which the patent was granted, or by their be- 
 ing made public, which always happens fooner 
 or later. 
 
 Strange as the afTertion may at firft fight ap- 
 pear, improvements in the arts are, however, lefs 
 owing to the ingenuity of individuals, than the 
 actual circumftances of the fociety. In the courfe 
 of this work, we mail have occafion to point out 
 the circumftances which determine, at diffe- 
 rent times, the fiate of manufactures with refpecl: 
 to their different degrees of improvement, and to 
 {hew, that a mode of manufacturing which, in one 
 ftate of fociety, would be attended by the moft 
 beneficial effects, would, in another, be attended 
 by the reverfe. 
 
 In forming, therefore, a right judgement of 
 thefe improvements, and their effects, we muff 
 compare the ftate of fociety, with refpect to 
 them, at different periods, and we fhall difcover, 
 that although, at any particular time, they ad- 
 vance fo (lowly as to be fcarcely perceptible ; 
 B 3 yeu
 
 ( 6 ) 
 
 yet, that they are certain and regular, depend- 
 ing on principles in their own nature fixed and 
 invariable. It will be fufficient for our purpofe, 
 in this place, to remark, that the effe&s of thefe 
 improvements are fo great, even in but a mode- 
 rate ftate of the advancement of fociety, that it 
 enables the manufacturer, not only to advance 
 wages fufficient to induce workmen to relinquifh 
 their ufual employments, in which they enjoyed 
 the whole produce of their labour, but aifo to 
 fell his goods considerably cheaper than thofe 
 produced by labour merely manual. 
 
 Until the manufacturer difpofes of the produce 
 of the labourers whom he employs, it is fuffi- 
 ciently evident, he muft be out of pocket the 
 whole amount of the wages advanced to his work- 
 men, the value of the raw materials, and his 
 own fubfiftence : the total amount of which will 
 be either great or fmall, according to the num- 
 ber of workmen, the value of the materials, and 
 the length of time neceifary for the completion 
 of the manufacture. 
 
 This part, or the circulating part of manufac- 
 turing ftock, we fee is neceifarily refolved into 
 the commodities of the ordinary confumption of 
 the manufacturer, and of his workmen, together 
 with the value of the materials on which they are 
 employed. If thefe commodities did not exift 
 in the fociety, no works could be undertaken 
 
 which
 
 ( 7 ) 
 
 which propofe for their object the completion of 
 manufactures at a remote period; as men would 
 be under the neceffity of employing themfelves 
 immediately in feeking fubfiitence. 
 
 That part of the manufacturing flock, neceffa- 
 ry for the purchafe of the raw materials, will be 
 found to refolve itielf into the fame two parts; 
 contrivances for abridging labour; and confum- 
 .able commodities. The firft, to occafion a great 
 produce from little labour ; the fecond, to feed, 
 cloath, and provide, both the workmen and their 
 employer, until the object of their labour is com- 
 pleted, and difpofed of. 
 
 Thefe materials, according to their different 
 kinds, are either the productions of the farmer ; 
 as wool, flax, Sec. or the productions of the ftock 
 and labour employed in mining, &c. Now, as 
 the flock thus employed will be found to refolve 
 itfelf into the fame two portions, the materials 
 produced by it may very properly be co'nfidered as 
 alfo refolvable into the fame two portions. If, for 
 example, we fuppofe the perfon employed in the 
 working of a copper mine, to work up the metal 
 into all the various forms in which it afterwards 
 appears, we fhould make no diftinction between 
 the flock neceffary, in the firft place, for work- 
 ing the mine, and that in the fecond, for provid- 
 ing the tools and fubfiflence of the workmen, for 
 the further manufacturing the metal into the dif- 
 ferent articles, ready for comfumption. We 
 B 4 fhould
 
 ( 8 ) 
 
 fhould blend the whole under the two divions of 
 which we have fpoken ; fixed, and circulating 
 ftock. 
 
 As fociety advances in improvement, the divj- 
 fion of employments increafes. The perfon who 
 works the mine, frequently difpofes of the ore. 
 The extracting of the metal furnifhes employ- 
 ment for a fecqpd ; the working of the metal, 
 to a confiderable number; and, often, before thfr 
 raw material appears in the form of an article 
 fitted for consumption, it may have given employ- 
 ment to the ftock, and labour of hundreds. 
 
 However inexplicable the real nature of the 
 employments of men may appear, in civilized 
 and in rich focieties, we fhall find, on reflection, 
 the principles which regulate them, few and in- 
 variable. Perhaps, it would be altogether im- 
 poflible to fhew the proportions, which the parts 
 of ftock bear to each other, in the feveral manu- 
 facturing employments ; nor would it, though it 
 were poflible, be at all to our purpofe. For it is 
 notour intention to fhew the parts into which ma- 
 nufacturing (lock, in a particular employment,may 
 be refolved, but the parts into which the manu- 
 facturing ftock of the fociety, taken in a mafs, 
 muft, neceffarily and unavoidably, be reduced. 
 Thefe parts are only two ; machines, and other 
 contrivances, by the aftiftance of which we are 
 more abundantly fupplied with the neceflaries 
 and conveniencies of life, and a quantity of com- 
 modities
 
 { 9 ) 
 
 modities fufficient for the consumption of the 
 manufacturer and his workmen, till the objecls of 
 their labour are completed. 
 
 PART II. 
 
 FARMING STOCfi. 
 
 Farming Stock is divided into the fame two 
 portions as manufacturing. Under the deno- 
 mination of fixed capital, we are to confider im- 
 plements of hufbandry, and all improvements 
 which tend, ultimately, to increafe the produce of 
 the land. The circulating capital provides the 
 wages of the labourers, the fubfiftence of the far- 
 mer, and the feed, which may be confidered, with, 
 refpeft to him, as raw materials, with refpect to 
 the manufacturer. Wages and the fubfiftence of 
 the farmer are refolvable, alfo, into confumable 
 commodities. 
 
 Thus, when we do not allow ourfelves to be 
 deceived by partial appearances, we difcover the 
 nature of both this, and the manufacturing ftock 
 of the fociety, to be extremely fimple. We fee 
 a quantity of goods regularly confumed, and thefe 
 replaced by labour. We muft, alfo, eafily per- 
 ceive how great the quantity of confumable com- 
 modities, accumulated within the fociety, muft 
 be, which is fufficient to fupport the manufactur- 
 ers, and the labouring part of the community, 
 until the commodities, on which, at any moment, 
 
 labour
 
 ( io ) 
 
 labour is employed, can be made ready for coiw 
 fumption. 
 
 In the anticipation of the rewards of labour, 
 we obferve a ftriking difference between the ftate 
 of men, in civilized fociety, and thofe who derive 
 a precarious fubfiftence from the chace. The 
 fubfiftence of the Indian depends on the fuccefs 
 of prefent exertion; while man, in a civilized ftate, 
 draws it from the produce of former labours. 
 That this takes place with refpe£l to food, is too 
 notorious not to ftrike every one ; but a moment's 
 refle&ion will enable us to difcover, that it alfo 
 takes place with every article of our confumption. 
 
 Hence an important and an unavoidable con- 
 clufion, that the inhabitants of any country can 
 never be more numerous, than the commodities 
 (under which we include food, and the other ar- 
 tides of common confumption) actually exifting 
 in the fociety can maintain, until the commodi- 
 ties, on which, at that moment, labour is employ- 
 ed, are finifhed and ready for confumption. 
 Hence, alfo, as the quantity of the food, and other 
 produce of the farmer, mud depend on the ftate 
 of the improvement of the lands, and his fixed 
 (lock, and on the number of labourers employed ; 
 and as the quantity of the productions of the ma- 
 nufacturer muft alfo depend on his fixed flock, 
 together with the number of workmen which his 
 flock permits him to employ ; fo the ftate of the 
 
 population
 
 ( H ) 
 
 population of every civilized fociety, is directly 
 determined by the abundance of farming and 
 manufacturing (lock; that the population can-never 
 exceed what the lands in their actual Rate of im- 
 provement, can maintain, is fufficiently evident; 
 and that (lock cannot increafe without peoplej 
 we fhall afterwards more fully demonftrate. 
 
 PART III. 
 
 MERCANTILE STOCK. 
 
 From local advantages, or from other caufes, 
 it frequently happens, that particular fpecies of 
 manufactures may be produced at a lefs expence 
 in one country than in another, or even in dif- 
 ferent parts of the fame country. Ihofe commo- 
 dities, for example, to the production of which 
 large quantities of fuel are neceffary, will (other 
 things being equal) be produced at a cheaper rate, 
 in thofe countries, in which fuel abounds, than in 
 thofe to which it rauft be carried at a considera- 
 ble expence. 
 
 In the many intermediate fteps between that 
 {late in which man ftands alone, and that in which 
 interelt connects him intimately with others, there 
 mult have been a period at which a commercial 
 intercourfe firft began to take place, between 
 places feparated from each other, which mult ne- 
 ceffarily have arifen from the circumftances above 
 mentioned. 
 
 Hence
 
 ( ik ) 
 
 Hence arifes the employment of the merchant, 
 and the neceffity of mercantile flock. This in- 
 tercourfe, however, is flow in its progrefs, and 
 from the manner in which it gradually takes 
 place, in a particular ftate, we fhall be able to 
 comprehend how it becomes more extended, and 
 to fee, diflin&ly, the limits to which it is confined, 
 by the ftate of focjety at any one period. 
 
 Let us fuppofe that two places, London and 
 York, for example, were fupplied with all the 
 articles of their confumption, by their own pro- 
 duce, (which at one period muft actually have 
 been the cafe;) but that, in York, a certain com- 
 modity was produced by lefs labour than in Lon- 
 don ; fuppofe woollen cloths: certain individuals 
 muft necefiarily find an intereft in purchafmg 
 cloths at York, in order to difpofe of them in 
 London. If the difference of price were great, 
 the influx of this fpecies of goods from York, 
 would compel the manufacturer at London to 
 employ himfelf in fome other way; and London 
 would in a fhort time be fupplied with this article 
 altogether from York, 
 
 If we fuppofe that, on an average, a fpace of 
 three months is neceffary, before thefe goods can 
 be expofed to fale, in the London market, from 
 the time of being completely out of the hands of 
 the workmen at York, it muft necefiarily follow, 
 that, if there be conftantly at the London market, 
 a quantity fufficient to anfwer the regular demand, 
 
 that
 
 ( 13 ) 
 
 that a quantity of flock, precifely of the value of 
 three months confumption of that article, is em- 
 ployed, over and above that which would be ne- 
 celfary, if London had been fupplied by its own 
 produce. 
 
 We may remark, by the way, that the time, in 
 which it is poflible to fend goods from one place 
 to another, will, by no means, regulate the quan- 
 tity of flock which may be neceffary ; as the ma- 
 nufacturer muft colled a certain quantity toge- 
 ther, before they will pay the expence of convey- 
 ance: which is alfo, in general, very flow; as no 
 commodities, except thofe of great value, and 
 fmall bulk, can bear the expence of the quickefi 
 mode of conveyance; the advantage, arifingfrom. 
 the quicker tranfmiffion, being more than overba- 
 lanced by the additional expence. 
 
 Thus, in addition to the commodities neceffa- 
 ry for the confumption of the workmen and ma- 
 nufacturers,until the articles be fini{hed,on which 
 the labour of the fociety is employed, we fee the 
 neceflity of a further accumulation, fufficient for 
 the confumption of the fociety, until the articles 
 of this kind can be procured from the places in 
 which they are produced. Thefe commodities 
 belong to the merchant, and are called mercan- 
 tile flock. The proportion which the mercantile 
 flock may bear to the manufacturing and farm- 
 ing, will be determined by circumftances, to be 
 treated of hereafter. 
 
 CHAP.
 
 ( H ) 
 
 CHAP. III. 
 
 Of the. Extent of the Market* 
 
 A CONDITION abfolutely neceffary to the 
 extending the market, for the productions of any 
 particular country, is, that it have fome advan- 
 tage by which certain goods may be fold as cheap, 
 or cheaper, at a diftant place, than thofe pro- 
 duced there ; proper allowances being made for 
 the neceffary expences of tranfportation, &c. 
 and the profits of the perfon who engages in fuch 
 an employment. 
 
 In obferving attentively the nature of the com- 
 merce carried on in any country, enjoying free- 
 dom of internal communication, we fhall imme- 
 diately obferve, that in fcarcely an inftance, are 
 the produ&ions of any town confumed entirely by 
 its own neighbourhood, or that it does not receive 
 from fome other place, part of the articles of its 
 confumption. This rauft arife from the circum- 
 flance above mentioned, as in mod countries, 
 England for example, in which this freedom of 
 communication is allowed, people enjoy a liber- 
 ty of withdrawing their (lock from one employ- 
 ment, and placing it in another, if they deem it 
 of any advantage. If, therefore, goods be car- 
 ried
 
 ( '5 ) 
 
 ricd from the north to the fouth, or from the 
 eaft to the weft, and after a great many expences, 
 fold as cheap as thofe with which they may come 
 in competition, itmuft arife from fome very con- 
 Cderable advantage which one place enjoys over 
 another, in the production of fuch commodities. 
 In fome cafes, thefe advantages are altogether 
 natural, from fuch, commercial intercourfe mull 
 have at firft arifen. But, in addition to thefe, we 
 fhall find another to which they give birth ; we 
 mean, the advantage arifing from the divifion of 
 employments, and which, in every cafe, depend* 
 on the extent of the market. This will be more 
 fully explained in a following chapter. 
 
 Another condition, as neceifary as the firft, is, 
 that the flock of the fociety be fufficient in quan- 
 tity to allow of it. Whatever advantage one 
 part of the country may have over another, in the 
 production of certain manufactures, the extent of 
 the exchange of commodities muft be regulated 
 by the quantity of the accumulation: for as the 
 mercantile ftock is employed in procuring, from 
 one part of the country, thofe articles, in the pro- 
 duction of which it may have an advantage ; fo 
 the quantity which the merchant may find an in- 
 tereft in importing; or, in other words, the quan- 
 tity of flock which he can thus employ with ad- 
 vantage, muft be regulated by the quantity of 
 goods which he can difpofe of, or the value which 
 3 he
 
 f 16 ) 
 
 he can receive in exchange for them. In a very 
 few inilances the merchant is paid for his com- 
 modities, by the merely natural productions of 
 the country : the furs, for example, of North 
 America. In this cafe, no degree of improve- 
 ment or accumulation in North America is ne- 
 ceffary, in order to afford a more extended mar- 
 ket for the productions of other countries. Such 
 inftances however are rare, and we fhall find the 
 quantity of goods, which people can purchafe, to 
 depend, in general, on the commodities which they 
 have in their power to give in exchange for them; 
 and which, unlefs in a very few instances, depend 
 on the quantity of ftock employed in production. 
 The commerce between two improved countries, 
 or different parts of the fame improved-country, 
 confiitsaltogether in an exchange of manufactured 
 commodities, or the productions of the farmer. 
 As mercantile flock, therefore, is employed in 
 exchanging, and not in producing, it mufl be 
 more or lefs dependent on the other two branches 
 of the general flock. It will be found however 
 to alter, in the proportion which its quantity may 
 bear to the quantity of flock otherwife employed 
 according to the flate of fociety, with refpect to 
 improvement in the arts, and the quantity of ac- 
 cumulation on the whole. 
 
 CHAP.
 
 ( 17 ) 
 
 CHAP. IV. 
 
 Of the Effeil of the Extent of the Market on the Produc* 
 tive Poxvers of Labour, employed by Stock. 
 
 Wi 
 
 HEN the flock of a country has become 
 fufficient to allow of the three divifions, of which 
 we have fpoken, and when a greater quantity of a 
 particular commodity is produced, at certain 
 places, than that neceffary for their confumption; 
 a divifion of labour takes place, which will always 
 be greater or lefs, in proportion to the quantity to 
 be produced, or to the extent of the market. The 
 following extract from the work of Dr. Smith, 
 will fnfficiently illuftrate the effects of this divi- 
 fion, " To take an example, (fays he,) from a 
 very trifling manufacture, but one in which the 
 divifion of labour has been often taken notice 
 of; the trade of the pinmaker. A workman not 
 educated to this bufinefs, (which the divifion of 
 labour has rendered a diftinfl trade,) nor ac- 
 quainted with the ufe of the machinery employed, 
 (to the invention of which probably the fame di- 
 vifion of labour has given occafion,) would 
 Scarcely, perhaps, with his utmoft induftry, make 
 one pin a day, and certainly could not make 
 twenty. But in the way in which this bufinefs is 
 C now
 
 ( t8 ) 
 
 now carried on, not only the whole work is a pe- 
 culiar trade, but it is divided into a number of 
 branches, of which the greater part are likewife 
 peculiar trades. One man draws out the wire, 
 another ftraights it, a third cuts it, a fourth points 
 it, a fifth grinds it at the top for receiving the 
 head j to make the head requires two or three 
 diftincl operations, to put it on is a peculiar bufi- 
 nefs, to whiten the pins is another, it is even a 
 trade by itfelf to put them into paper ; and the 
 important bufinefs of making a pin, is in this 
 manner divided into about eighteen diftin£t ope- 
 rations, which in fome manufactories are all per- 
 formed by diftincl hands, though in others, the 
 fame man will fometimes perform two or three of 
 them. I have feen a fmall manufactory of this 
 kind, where ten men only were employed, and 
 where fome of them confequently performed two 
 or three diftincl operations. But though they 
 were very poor, and there\bre but indifferently 
 accommodated with the neceffary machinery, 
 they could, when they exerted themfelves, make 
 among them, about twelve pounds of pins a day. 
 There are in a pound upwards of four thoufand 
 pins of a middling fize. Thofe ten perfons, there- 
 fore, could make, among them, upwards of forty 
 thoufand pins a day: each perfon, therefore, 
 making a tenth of forty thoufand pins, might be 
 conhdered as making four thoufand pins a day. 
 
 But,
 
 ( »9 ) 
 
 But, if they had all wrought feparately, and in- 
 dependently, and without any of them having 
 been educated to this particular bufinefs, they 
 certainly could not each of them have made 
 twenty, perhaps not one pin a day; that is, cer- 
 tainly not the two hundredth, and perhaps not the 
 four thoufandth part of what they are at prefent 
 capable of performing, in confequence of a pro- 
 per divifion, and combination of their different 
 operations." 
 
 From this we may form a very good idea re- 
 fpe&ing the effects of a judicious divifion of la- 
 bour, and which will always be in proportion to the 
 quantity of a certain commodity to be produced, 
 or to the extent of the market. In many other 
 employments, as the fame author obferves, a divi- 
 fion of the fame kind takes place, but being, from 
 the magnitude of the works, or from other 
 caufes, divided, fo as that a few only of the ope- 
 rations can be perceived at one time, it is much 
 lefs evident. 
 
 In this inftance, however, we have feen the di- 
 vifion of labour, only as it tends to produce a 
 greater quantity of goods, by a proper application 
 of it. But we may go further, and fee a divifion 
 take place, which involves the flocks of hundreds, 
 and the labour perhaps of many thoufands. We 
 fhall take one inftance only, which will fufficient- 
 ly illuftrate this point. In the working of a me- 
 C 2 tallic
 
 ( 20 ) 
 
 tallic mine, the flock of an individual, however 
 great, is often trifling, compared with that necef- 
 fary for even drawing the ore from the earth. We 
 frequently fee companies formed for this purpofc, 
 and even their united (locks, are altogether in- 
 efficient for working up the metal into manufac- 
 tures. This forms employment for the flocks of 
 others, who give it, perhaps, another afpe£l, when 
 it is handed over to a third; and, as we have for- 
 merly obferved, the metal may pafs through the 
 hands of hundreds, before it appears in the form 
 for which it was originally deftined. Were 
 we to conceive the whole of the flock, which is 
 thus divided amongfl fo many, in pofleflion of 
 one perfon, or company, they mufl be determined 
 by its quantity, in the 'manner of employing it, 
 and the proportions of it, which might with 
 advantage be employed in each flage of the pro- 
 cefs, from the procuring the metal from the mine, 
 until it was completely manufactured. Were too 
 great a quantity employed, in the firfl ftages of the 
 procefs, it mufl incapacitate them from working 
 up the whole of the metal, and the flock, employ- 
 ed in procuring the fuperabundant quantity of 
 the material, would prove wholly unprodu6live. 
 As a man who would, with a flock of /500, fet 
 about building a houfe which required £2000, 
 he mufl flop after he had got the foundation 
 laid, and his flock would be little better than 
 thrown away. 
 
 We.
 
 ( *l ) 
 
 We are not to conceive, however, becaufe this 
 divifion of (lock takes place, that the nature of 
 things are altered, or that no relation exifts be- 
 tween the parts of ftock in the feveral employ- 
 ments. The term demand, fo well known amongfl 
 merchants and manufacturers, is a demonflrative 
 proof, that this relation does exift. The perfon 
 who works up the metal into the common articles 
 of confumption, is determined by the quantity of 
 thefe articles, for which there is a demand ; the 
 perfon, who extracts the ore, is determined in the 
 quantity which he purchafes from the miner, by 
 the quantity of the metal he can difpofe of; and 
 the miner alfo, is determined in the quantity of 
 ftock he can employ with advantage, by the 
 quantity of the produce for which there is a de- 
 mand. Of this, however, we mall treat more 
 particularly hereafter, where we fhall place the 
 nature of demand, in a new point of view. 
 
 The divifions of ftock, which take place in the 
 produftion of certain commodities, it is fufficient- 
 ly evident, muft be regulated by the quantity of 
 the commodities, for which there is a demand. 
 If the market, however, were confined to a parti-, 
 cular town, or its neighbourhood, but a very 
 triflng part of this divifion could take place; and 
 it may be doubted, if any manufactures, but thofe 
 of the moft fimple and homely kind, would ever, 
 be eftablifhed. 
 
 C 3 Nothing
 
 C « ) 
 
 Nothing contributes fo much to the extending 
 the market, for the productions of particular 
 places, as the eftablifhing of good roads and ca- 
 nals. The advantages which arife from them, 
 will fcarcely admit of calculation: for when we 
 cbferye certain articles fold at a cheaper rate, in 
 one part of the country, than in another, we are 
 not to compare the difference of price, with the 
 expence of making a communication, becaufe 
 thofe articles, which could not bear the expence 
 of ordinary carnage, may very well bear the 
 charges attendant on a conveyance by water; and 
 by the market becoming more extenfive, greater 
 divifions of labour and flock may take place in 
 their production ; and confequently may be fold 
 at a price ftill lower. 
 
 CHAP.
 
 ( *3 ) 
 
 CHAP. V, 
 
 Of the Extent of the Market, as it affecls the Manner of 
 the Employment of Stock. 
 
 I 
 
 F we fuppofe a country excluded from all fo- 
 reign intercourfe, the divifions which take place 
 in its ftock, and the manner of its being employ- 
 ed, muft be regulated by its internal confump- 
 tion, and as the communications between the fe- 
 veral parts of it are more or lefs eafy. 
 
 But, when commerce takes place between dif- 
 ferent nations, the confumption of the one has a 
 confiderable effect on the productions of the 
 other. If the commerce of England were folely 
 confined to itfelf, its flock would neceffarily be 
 employed, in the production of articles for its 
 own confumption ; but if, in this flate, a connec- 
 tion were fuddenly opened with another country, 
 France fuppofe, we mould fee a very material 
 change in the products of England ; many of thefe 
 would find a market in France; and many of the 
 products of France, would find a fale in the 
 markets of England. The importation of French 
 commodities into England, and of Englifh into 
 France, would neceffarily alter the common 
 courfe of the demand. Certain manufactures in 
 C 4 England
 
 ( *4 ) 
 
 England would, perhaps, be annihilated, by the 
 influx of goods from France: the fame would 
 happen in France, by the influx of goods from 
 England. Many workmen would be thrown out 
 of employment in both countries, and, as they 
 are feldom addifted to philofophizing, would 
 perhaps, deem their deftru£lion inevitable. 
 
 The future effects of fuch a communication 
 are well worth attending to. After the commerce 
 between the two countries had got into a regular 
 courfe, as the demand had been increafed in each 
 country for certain fpecies of goods, the nock 
 and labour thrown out of one employment, 
 would find it in another: the fame ftock, the 
 fame labour, would ftill be employed, though in 
 a different manner. The inconveniences attend- 
 ing this freedom of intercourfe would be only 
 temporary, and, which is particularly deferving of 
 notice, the greater the diftrefs of the workmen, 
 on the abolition of commercial reftriclions, the 
 ft ranger the proof of the neceffity of fuch an abo- 
 lition, as it demonftrates the poflibility of a more 
 proper application of ftock. 
 
 The advantage accruing to the two countries, 
 England and France, from fuch a freedom of 
 commerce, would be, in the firft place, the diffe- 
 rence between the price of the commodities inw 
 ported into each country, compared with the 
 prjce of fuch commodities before the communi- 
 cation:
 
 ( *5 ) 
 
 "cation; (not to fpeak of new productions un- 
 known to each country before *\ and in the fe- 
 cond, a further reduction of their price, as great- 
 er divifions of flock and labour took place in 
 their production. 
 
 If we carry our views but a little farther, we 
 fhall difcover, that the more extended the fo- 
 reign commerce of any country is, the fewer 
 mult be the fpecies of its manufactures. If we 
 compare the number of the fpecies of manu- 
 factures, in a particular town, with the number 
 in the whole country, or with the different kinds 
 of commodities confumed within the town, we 
 fhall find the former bear a very fmall proportion 
 to either of the latter. But when we alfo com- 
 pare the quantity of the commodity or commo- 
 dities produced within that town, with its con- 
 fumption of thefe fame commodities, we fhall 
 obferve a very ftriking difference, which will be 
 either greater or lefs, in proportion to the extent 
 of its commerce, with the towns and country in 
 its neighbourhood. 
 
 The nature of foreign commerce, and the man- 
 ner in which it enriches nations, is fimply by af- 
 fording a more extended market for the produc- 
 tions of each, by which, in each nation, the 
 quantity of commodities may be greatly increaf- 
 ed, in confequence of the greater divifions of 
 flock and labour. 
 
 Commerce
 
 ( 26 ) 
 
 Commerce between nations is precifely of 
 the fame kind, with the exchange which takes 
 place between individuals, after the divifion of 
 employments has been eftablifhed; and, as in this 
 cafe, the more he is confined to a particular and 
 fimple operation, the more it tends to the good 
 of the fociety of which he is a member; fo in 
 that, the more fimple the labours of any par- 
 ticular fociety, and the more it confines itfelf 
 to the production of but a few commodities, the 
 more it tends, not only to the good of that indi- 
 vidual nation, but alfo of every other with which 
 it is connected. 
 
 A notion is commonly entertained, that by ad- 
 mitting the manufactures of other countries, we 
 ■difcourage our own. No doubt we do, of that 
 particular fpecies of manufacture ; but it muft be 
 confidered, that our manufactures of another 
 kind are, exactly in the fame degree, encourag- 
 ed: becaufe the goods imported, muft be paid 
 for by an exportation : and, in every cafe, we 
 cannot have a more certain proof of a great ex- 
 portation, than by a great importation. An im- 
 portation, without an exportation, can take place, 
 only when foreigners come over with their ftocks, 
 for the purpofe of fettling; (which is acknow- 
 ledged to be of confiderable advantage ;) nor can 
 an exportation take place, without an importa- 
 tion, except when people leave- the country, for 
 
 the
 
 ( *7 ) 
 
 the purpofe of fettling in fome other; which is 
 as generally allowed to be of di fad vantage. 
 
 Thus far, this reafoning has ever appeared 
 fatisfactory : but it has been the opinion of many ; 
 that importation of goods is attended, in many 
 cafes, by the exportation of money. The late 
 celebrated Dr. Smith has endeavoured to prove, 
 that this opinion is altogether groundlefs ; and 
 that the quantity of money, circulating in a 
 country, can be leflened or increafed, only by 
 other methods; and that importation or exporta- 
 tion of goods, in the ordinary courfe of trade, do 
 not affeft it, as one muft balance the other. Wc 
 fhall afterwards have occafion to enforce the 
 opinion of the Doctor in part, and to point out 
 fome circumftances which regulate the quantity 
 of money, of which he does not appear to have 
 been aware. 
 
 CHAP.
 
 ( ** ) 
 
 CHAP. VI. 
 
 Of the Divifion of Stock. 
 
 E 
 
 VERY individual wiflies to engage his frock 
 in the moft profitable employment; but, as in 
 every employment, not more than a certain 
 quantity can be engaged with the common ad- 
 vantages, it will be necefTary to point out the 
 manner in which flock is engaged under different 
 circumflances, confiflently with the intereft of 
 individuals. 
 
 The flate of the fociety, with refpe£t to im- 
 provement in the arts, and the quantity of the 
 accumulation on the whole, will determine the 
 quantity .which may be engaged with advantage, 
 in each of the three employments. 
 
 As every fpecies of flock muft have arifen 
 originally from labour, it would at firfl be em- 
 ployed in affiDing it. Stock, therefore, would at 
 firfl be employed in manufacturing and farming. 
 Mercantile flock can never fland alone, as its 
 bufinefs confifls, in affifting the exchange, not in 
 the production of commodities. It is, confe- 
 quently, at all times, dependent on the other two 
 {^ranches of flock. The proportion, however, 
 
 which
 
 ( 29 ) 
 
 which it bears to them, is very different at differ- 
 ent times. 
 
 When an individual finds that, by importing 
 goods, either from foreign countries, or diftant 
 parts of the fame country, he may increafe his 
 profits, he naturally employs his ftock in doing 
 fo ; and as the ftock of the fociety becomes fuf- 
 ficient to admit of numerous divifions of labour, 
 and when the productions of particular places 
 are confirmed at a diftance, the quantity of 
 ftock, neceffary to be employed in exchanging, 
 muft be increafed. As the market for the pro- 
 ductions of every particular part of a country 
 becomes extended through the whole, fo muft 
 the mercantile ftock be increafed, in order to 
 admit of it, and thus gradually begins to bear a 
 greater proportion to the other two parts of the 
 general ftock. 
 
 In order that very great divifions of labour 
 may take place, it is often only neceffary, that all 
 the ftock and labour, employed in the produc- 
 tion of a certain commodity, be got together in 
 one place. The fame ftock, with the lame, or a 
 fmaller number of workmen, may produce a 
 much greater quantity of goods. Expenfive 
 works, which facilitate the production, may be 
 erected with advantage, when a great quantity of 
 a particular kind of goods is to be produced. 
 When a great quantity of a particular article is 
 
 manufac-
 
 ( 30 ) 
 
 manufa&ured at the fame place, it alfo happens, 
 that the flocks of five or fix different people, are 
 concerned in the complete manufacture .of it. 
 No diviiion of flock, of this kind, can take place, 
 where a fmall quantity only is to be produced, 
 although we were to fuppofe the individuals 
 equally rich, and that each employed the fame 
 number of workmen. For, in confidering the full 
 extent of the divifion of flock and of labour, we 
 are not to confine ourfelves to remarking the 
 quantity of flock and the number of workmen 
 employed, by a certain manufacturer; we muft 
 take into confideration, the flock and workmen 
 employed by others, on the material, in its diffe- 
 rent afpefts, and form our judgement from a 
 view of the whole. 
 
 But, as the more an individual is confined to a 
 fimple operation, the more he becomes dependent 
 on the other individuals of the fociety; fo with 
 particulartownsornations; and,as a certain degree 
 of accumulation of commodities is neceffary, be- 
 fore labour can be applied, in a manner which is 
 not immediately productive; (which we have al- 
 ready fhewn to be the cafe with all employments 
 in civilized fociety) and, as the abundance of this 
 accumulation mull determine the degree of this 
 divifion of labour; that is, whether labour fhall 
 be employed on commodities which require fix, 
 twelve or eighteen months, &c. to their produc- 
 tion ;
 
 f 3« ) 
 
 tion; and, as in treating of mercantile flock, we 
 have fhewn that, when a commerce takes place 
 between diflant places, a dill greater quantity of 
 goods is neceffary, than thofe, of which the ma- 
 nufacturer has the command; fo the divifions of 
 flock and labour, which take place in manufac- 
 turing, are as directly dependent on mercantile, 
 as manufacturing flock. 
 
 Thus we fee that, in different countries, or in 
 the fame country, at different times, the mofl ad- 
 vantageous divifions of labour and flock will be 
 regulated by the abundance of this fpecies of 
 riches. Under improper circumflances, great di- 
 vifions of labour would be highly deflructive : like 
 a man who failed on a three months voyage with 
 provifions on board but for two. 
 
 From the premifes, we may conclude, that the 
 quantity of mercantile flock, in proportion to 
 manufacturing and farming, is always greateft, 
 when the market for the productions of particu- 
 lar places is mofl extenfive. 
 
 The manner in which thefe divifions of flock 
 take place, and their effects on the revenue of the 
 fociety, will be eafily underflocd. The ob- 
 ject of every manufacturer and merchant, is, to 
 increafe their profits. The manufacturer at- 
 tempts it, by improving his machinery, &c. the 
 merchant, by procuring goods at the cheapefl 
 market: but as improvements in manufactur-
 
 ( 3* ) 
 
 ing, and the chcapeft market become known, 
 they are obliged to lower their prices, until 
 their profits are on a level with thofe of 
 others. As there were never two places alike 
 in every circumftance, it will generally hap- 
 pen, that commodities may be produced, at a 
 cheaper rate, in one place, than in another; that 
 is with lefs labour. It does not happen, however, 
 that manufactories are always eftablifhed at the 
 places belt adapted for them. A proper divifion 
 of labour, and a knowledge of the art, may give 
 to certain places an advantage over others, which 
 enjoy very confiderable natural ones: but when 
 certain places obtain an advantage over others 
 in the production of particular goods, from what- 
 ever caufes it may arife, whether from a natural 
 or acquired fuperiority, fuch places muft acquire 
 a ftill greater, and open to themfelves a more 
 extended market, in confequence of the divifions 
 of labour, which follow the greater demand. 
 
 A mere difference of price, is not, however, 
 the only thing which can determine the degree 
 of the extent of the market. The greater the 
 diftance between two places, the greater muft be 
 the difference of the price of particular commo- 
 dities, in order to allow of an extcnfive com- 
 merce. The profit of the merchant muft depend 
 on the additional price which he can lay on each 
 article imported ; which, in order that his profits 
 2 may
 
 ( S3 ) 
 
 ^iay be on a level with thofe of otheFs, muft be 
 determined by the time in which he can turn his 
 frock. A merchant with a ftock of /'500Q, whkh 
 Jie tufns twice a year with a profit of 5 per cent. 
 is on a level with him who, on the fame ftock. 
 which he turns but once a year, has a profit of 
 jo per cent. 
 
 But as the diftance becomes greater, and as 
 each place becomes more dependent on others 
 for the articles of its confumption, fo the quan- 
 tity of mercantile ftock increafes: thus, in a ftate 
 advancing in improvement, the manufacturing 
 and farming ftock increafe, but the mercantile 
 in a ftill greater proportion. This is the natural 
 order in which ftock divides itfelf in the pro- 
 grefs of fociety, that is, the divifion which indivi- 
 dual intereft will always tend to promote; for, 
 if this increafe of the mercantile ftock did not 
 take place, or if we were for a moment to con- 
 ceive it fuddenly leftened, we fhould perceive 
 the profits of the merchants confiderably increaf- 
 ed. It fome.times happens, from unexpected in- 
 terruptions in the ordinary cpurfe of commerce, 
 that the articles of a certain kind at market are 
 infufficient to fupply the demand. In this cafe, 
 the dealers in thefe articles enjoy a temporary- 
 monopoly; or, in other words, the mercantile 
 ftock is infufficient. The profits of the mer r 
 ^hants are, therefore, for the moment, augment-
 
 ( 34 ) 
 
 ed. If any means could be devifcd to prevent 
 ftock from being employed as mercantile, when 
 the profits of this particular employment were in- 
 creafed, merchants would enjoy a conftant mo- 
 nopoly of this kind. 
 
 As neither the merchant, nor his ftock, is em- 
 ployed directly in production, it follows that it 
 can only be augmented in two ways; ift, by the 
 profit of the merchant; or, 2d, by ftock, which 
 had been accumulated in the other two employ- 
 ments, being converted into mercantile ftock. 
 But, as competition reduces the profit in all em- 
 ployments nearly to a level, the firft will be in- 
 fufficient to account for the greater increafe of 
 the mercantile ftock in the progrefs of fociety. 
 We, on the other hand, feldom fee people with- 
 drawing their ftock from one employment, to 
 place it in another, which is always attended by 
 conftderable inconvenience. The proportions, 
 between the feveral parts of ftock, we fhall find 
 preferved more generally by the choice of pro- 
 feftions. A parent, whether farmer, manufactur- 
 er, or merchant, wiflies to place his children in 
 the moft profitable employment, which, while a 
 fociety is advancing, muft be the mercantile. 
 Thus we frequently fee part of the ftock, which 
 had been accumulated by the father, in the ma- 
 nufacturing or farming employments, engaged 
 by the children in the mercantile. 
 
 From
 
 ( 35 ) 
 
 From the great quantity of mercantile flock in 
 rich focieties, which is never employed in pro- 
 duction, and on every portion of which the mer- 
 chant expe£ls a profit, it might, at firft view, be 
 fuppofed, that the revenue of the fociety, or the 
 quantity of confumable commodities, annually 
 produced, is not increafed in quantity, in pro- 
 portion to the numbers amongft whom it is 
 to be divided. But, from what we have already 
 faid, it will be fufficiently evident, that, although 
 mercantile flock is not immediately employed in, 
 production ; yet the divifions, which take place 
 in the other employments, are dependent on it; 
 and as the objecl of thefe divifions, is to increafe 
 the produce from the fame labour, which can be 
 be marked, only, by the fall of the price of each 
 article thus produced ; and as the merchant, after 
 thefe improvements, is able to fell his goods 
 cheaper, than thofe on which the wages of labour 
 and the profit of the manufacturer, only, are 
 charged, after allowing himfelf the ordinary pro- 
 fit on his whole flock ; fo thefe improvements 
 which depend on the mercantile flock, are not 
 only fufhcient to allow of the profit on its greater 
 quantity, but more than fufficient; which may 
 be known by the difference of the price of thofe 
 commodities at different times. Of this, how- 
 ever, we mall treat more particularly hereafter. 
 
 D 2 It
 
 ( 36 ) 
 
 It mud indeed be acknowledged, that the inte- 
 reft of the lower orders is not immediately for- 
 warded by thefe divifions of ftock and labour^ 
 and the confequently greater increafe of mercan- 
 tile ftock. The abundance of their wages de- 
 pends on the increafe of the manufacturing and 
 farming ftocks. If ftock, as it was accumulated, 
 was employed in production, the demand for 
 labour would increafe along with it: did this, 
 however, take place^the revenue of the fociety 
 would never be fo great as if freedom of com- 
 merce were allowed. In the former cafe, wages 
 would quickly rife; but never to any great 
 height. In the latter, they rife more (lowly; but 
 in the courfe of fome time are much more con- 
 fiderable ; becaufe, the revenue, or the produc- 
 tions arifing from the labour and ftock of the 
 country, always increafes, as the accumulation of 
 the fociety approaches to that ftate, which admits 
 the greateft poflible divifions of labour. This 
 alfo we fhall treat more particularly of, when we 
 come to fpeak of the divifion of the revenue. 
 
 CHAP.
 
 ( 37 ) 
 
 CHAP. VII. 
 
 Of the nominal Value of Commodities \ 
 
 HP 
 
 JL HE revenue of every individual is dependent 
 on the price of fome commodity or commodities. 
 The rent of the landlord depends on the price 
 which the farmer receives for the produce of the 
 land. The wages of the workmen and labourers, 
 employed by the manufacturers and farmers, to- 
 gether with the profits of the latter, are fecured 
 by the price at which their feveral productions 
 are fold. The profit alfo of the merchant de- 
 pends on the difference between the price at 
 which he purchafes, and that at which he fells. 
 
 From thefe fa£ts, the late Dr. Smith has con- 
 cluded, that the price of all commodities is de- 
 termined by the price of the produce of the land, 
 (by which rent is ultimately regulated) the price 
 of wages and profit. Thefe he calls the compo- 
 nent parts of the price of commodities. The 
 price of commodities, therefore, according to 
 him, muft rife or fall with the rate of any or all 
 of thefe fpecies of revenue. 
 
 This mode of reafoning is, at firft fight, ex- 
 tremely plaufible, but, on a clofe examination, 
 will be found totally unfounded. For commo- 
 D 3 dities
 
 ( 38 ) 
 
 dities do not bear a certain price, becaufe wages 
 of labour, profits of flock, or rent of land are at 
 a certain rate; but becaufe the whole of the 
 produce muft be diflributed amongfl the three 
 orders of which fociety is compofed; landlords, 
 workmen, and owners of flock, (from whom eve- 
 ry other fpecies of revenue is derived) and as 
 the diflribution is made by each order charging 
 a certain nominal value on the different produc- 
 tions, as they pafs through their hands, fo, unlefs 
 they bore this value, the proper diflribution of 
 the revenue could not be made. This will be 
 befl illuflrated by an example. Let us fuppofe 
 two focieties, each confifling of fifteen families, 
 and each confined to itfelf: let it be fuppofed 
 that, from particular circumflances, three families 
 in the one were neceffary to fupply the whole fo- 
 ciety with food and raw materials for manufac- 
 tures; while, in the other, two only were fufficient 
 to provide the fame quantity. The quantity of 
 finifhed commodities, to be devided in the one 
 muft, therefore, exceed the quantity to be divid- 
 ed in the other. If this divifion be made through 
 the medium of money, and each perfon charge 
 a price on the commodity which fell to his fhare 
 to produce, in proportion to his labour, it muft 
 necelTarily follow, that the individuals of the one 
 fociety, in difpofing of their productions amongft 
 each other, muff, in o der that the produce of 
 
 their
 
 ( 39 ) 
 
 their united labours be equally divided, either 
 fell the manufactured goods dearer than thofe in 
 the other, while the price of the raw materials 
 and food is the fame in both ; or, while the price 
 of the manufactured goods is the fame in both, 
 purchafe their raw materials and food at a great- 
 er. In every (late of fociety, the revenue of 
 the individual rauft depend on the difference 
 between that which he gives and that which he 
 receives. When money ferves as the medium of 
 all exchanges, the nature of things remains the 
 fame ; the only difference is, that people then 
 fpeak of the prices only of things. If, in thefe 
 two focieties, the price of food, Sec. be raifed in 
 confequence of its reprefenting not only the 
 quantity of labour employed in procuring it, but 
 rent alfo, ftill the manufactured commodities 
 muft be fold at the fame price. The rife in the 
 price of the produce could only affect the reve- 
 nues of thofe employed in manufacturing (which 
 we may call profit or wages} but could not in the 
 fmalleft degree raife the price of manufactures. 
 After ftock has been accumulated, and its divi- 
 fions with that of labour eftablifhed, the fame 
 principle holds. If certain articles be rifen in 
 price, either in confequence of more labour be- 
 coming neceflary to procure them, or a rife in 
 the revenue of certain orders, it is altogether im- 
 poffible that it can be compenfated by the rife of 
 D 4 thofe
 
 ( 4° 1 
 
 thofe goods on which the revenues of the otheY 
 orders depend. 
 
 The caufes of deception on this fubjecl, are 
 chiefly two* ift, The unequal rife or fall in the 
 value of feveral forts of rude produce. 2d, The 
 alterations which take place in the diflribution of 
 the revenue; We (hall afterwards have occafiort 
 to (hew that the profits of flock rnuft fall in the 
 progrefs of fociety towards improvement, attend- 
 ed by the rife of wages. In this place, it is not 
 our bufmefs to fhew how thefe changes take place, 
 but to Confine ourfelves to a view of their effe&s 
 on the nominal value of particular commodities. 
 
 If every portion of rude produce were to rife in 
 value in fuch a manner, as to affect each employer 
 of flock exaclly alike, we fhould fee them fell 
 their commodities at the ufUal price, while they 
 were obliged to pay an advanced one on the ma- 
 terial i but as it is altogether impoflible that each 
 owner of flock can be affecled exaclly alike, fa 
 unlefs the value of the articles produced in cer- 
 tain employments were raifed, the rife in the price 
 of the material mUfl fall on an individual. But 
 although, by the rife of one fpecies of revenue, 
 (rent) we fee particular Commodities raifed irt 
 value, yet commodities in general cannot be ill 
 the lead degree affecled; the whole mafs at mar- 
 ket mull bear precifely the fame value. Thd 
 rife of rent will fall on profit and wages, and as 
 
 much
 
 ( 4i ) 
 thuch as particular fpecies of commodities arc 
 1-aifed by the advance of the former, others will be" 
 funk by the depreffion of the latter*. 
 
 The 
 
 * As, at firft view, it does not appear evident why the rife of 
 Ihe materials of one fpecies of manufacture, in confecjuence of the 
 Hfe of rent, attended by a rife of the articles into which fuch 
 materials enter, mould occafion a depreffion of the price of other 
 manufactured articles; we fubjoin a further illdfl ration for the 
 peiufal of thofe who are more than ordinarily inclined to abllracl 
 enquiry. 
 
 The flocks of the manufacturers; merchants, and farmers, an- 
 ticipate the three fpecies of revenue 3 rent, profit, and wages. 
 The greater the proportion which one order receives, the lef* 
 muft be that of fome other. If the manufacturer, therefore, give 
 a greater price for raw materials, he makes over to the landlord 
 part of that which had reprefented his own profits, together with 
 the wages of his workmen : unlefs, therefore, he lefTens his own 
 expences, the whole amount of the advance of the price of the 
 material, it is very evident, he cannot employ the fame number of 
 workmen, at the ordinary rate of wages, nor produce the fame 
 quantity of goods. There would flill be in the fociety the fame 
 quantity of materials, and the fame number of workmen j but the 
 Commodities which had reprefented profits and {lock being lef- 
 fened, muft compel workmen to take lefs wages. As the dimi- 
 nution of the quantity of commodities, (or which amounts to the 
 fame thing, as the money which had given the manufacturer the 
 Command of thefe commodities, had been handed over to the 
 landlord,) had been made in one employment, there would be a 
 heceffity of a new diftribution of ftock and labour, amongft the 
 feveral employments, in order that the fame quantity of goods 
 fhould be produced in each, and an equality of wages and profit 
 prererved* The ftock which had been engaged in purchasing 
 
 a«a
 
 ( V ) 
 
 The reader mud recollect, that in this place, 
 we fpeak only of the value of goods, as affected 
 by the different fpecies of revenue, and the value 
 which one article muft bear, when compared with 
 another, in order that the revenue fhall be diftri- 
 buted. The circumftances which determine their 
 abfolute value, or the quantity of gold and filver 
 
 and working up the materials, which retained the fame value, 
 would, in confequence of the reduction of wages, be fufficient 
 for the purchafe of an additional quantity of materials, and the 
 employment of a greater number of workmen. While the flock, 
 in the other employment, in confequence of the increafed price 
 in the material, would be infufficient for the employment of the 
 ufual number. We fhould therefore fee a quantity of flock 
 turned from one employment into another: different quantities of 
 flock, in confequence of this change in the diilribution of the 
 fevenue, becoming neceffary to produce the fame quantity of 
 goods. And thus, if we fuppofe profits of flock to remain the 
 fame, the reduction of the rate of wages mufl enable thofe, in the 
 employments not affected by the increafed value of materials, to 
 lower the value of their goods. The reduction of the rate of 
 wages mufl alfo keep down, in fome degree, the price of thofe 
 goods whofe materials were raifed. If the increafe of rent be 
 fuppofed to affect profit, the effects on the nominal value of goods 
 will be precifely the fame ; one article will be raifed in price, 
 and another reduced in precifely the fame proportion; the reduc- 
 tion of one fpecies of revenue always attending the increafe of 
 another. 
 
 Hence, it will appear, that the flaple commodities of a coun- 
 try, will be different at different times, according as rent of land, 
 proras of flock, or wages of labour p.edominate. 
 
 for
 
 ( 43 ) 
 
 for which they {hall exchange, will be treated of 
 hereafter. 
 
 When the profits of flock are reduced, and 
 wages of labour rajfed, certain goods mull be af- 
 fected in value, fome muft be raifed and others 
 reduced. According to the value of the materi- 
 als and other circumftances, the quantity of (lock 
 neceffary to give employment to a certain num- 
 ber of workmen, muft vary; but if wages were 
 raifed in every employment, while the nominal 
 value of goods was kept ftationary, the owners of 
 ftock in the different employments, muft be very 
 differently afFefted ; thofe who with a great ftock 
 employed a certain number of workmen, muft 
 fuffer much lefs than they who with a fmaller 
 ftock employed the fame number. Competition, 
 however, would oblige the one to lower the price 
 of his goods, while that of the other, in order 
 that he fhould enjoy the common profits, muft be 
 raifed. 
 
 In a word, to judge rightly of the manner in 
 which the nominal value of goods is regulated, 
 we muft not confine ourfelves to a partial view. 
 If the reader will confider, that the whole of the 
 annual productions is parcelled out amongft the 
 different orders of which fociety is compofed, 
 either as rent of land, wages of labour, or profits 
 of ftock, and that this divifion is made by com- 
 modities bearing a certain price, confiftently with 
 
 the
 
 ( 44 ) 
 
 the circumftances already pointed out; he will, at 
 a finglc glance, perceive the changes which muft 
 take place, in the prices of certain commodities, 
 under different circumftances. 
 
 CHAP. VIII. 
 
 Accumulation of Stock. 
 
 w. 
 
 HEN we confider the nature of flock, as 
 confiding of an accumulation of commodities, 
 employed either in fetting labourers to work, or 
 in procuring manufactured goods from diftant 
 plates by exchange, it will be readily feen, that 
 when the quantity is fufficient for thefe purpofes, 
 in their greatefl poffible extent ; to wit, when in 
 every employment, the greatefl poffible divifions 
 of labour may have taken place; which require, 
 as we have already fhewn, a proportionably 
 greater quantity of mercantile flock, every further 
 accumulation, we fay, mufl be more equally di- 
 vided, amongfl its three divifions of manufactur- 
 ing, farming, and mercantile* " 
 
 Stock, however, in its own nature, is inert and 
 Unproductive, even in manufacturing and farm- 
 ing
 
 ( 45 ) 
 
 ing. It is not the Hock which produces, in thcfe- 
 employments, but the labour, which, in confe- 
 quence of accumulation, may be more advan-. 
 tageoufly applied. When the divifions of labour 
 areas great as poflible, and when every increafe 
 of mercantile Hock mult wait the increafe of the 
 other two parts of the general flock; the increafe 
 of the whole muft be attended by a proportional 
 increafe of people. To work up double the 
 quantity of raw materials, double the number of 
 people is neceflary ; nor is it pofhble to conceive 
 the further augmentation of the one, without 
 that of the other. It may indeed be carried from 
 one country to another, but if the Hock, already 
 in the country, be fufheient for the purpofes enu- 
 merated, a quantity, equal to that introduced, 
 muft remain fomewhere unemployed; either the 
 manufacturer muft want workmen, or the mer-. 
 chant turn his ftock more (lowly. It may not, 
 however, be the ftock thus introduced, that re^ 
 mains unemployed ; if the perfon who pofTefTes 
 it, wifhes to employ it in manufacturing, he has 
 only to give greater wages than ordinary to pro-, 
 cure workmen; or if he employ it as mercantile 
 ftock, he has only to fhew a little more tafte than 
 common in the choice of his goods, or to fell for 
 a lower price, to procure cuftomers. It requires, 
 however, a very considerable increafe of Hock, even 
 in a particular employment, to produce the leaft 
 
 fenfible
 
 ( 46 ) 
 
 fenfible effect, as it muft be proportioned to the 
 quantity of the fuperabundant ftock, when com- 
 pared to the quantity necefTary in the employ- 
 ment. Perhaps at no time, is the quantity in 
 each, neither more nor lefs than that necefTary; 
 as it is impoffible to form an accurate idea of the 
 circumftances on which it depends. The profits 
 of flock are never exactly the fame in all employ- 
 ments ; fometimes they are higher, and at other 
 times lower. Thefe variations are owing to the 
 quantity of ftock, in each employment, being 
 fometimes more, and at other times lefs, than that 
 necefTary. 
 
 When the people of a country are as nume- 
 rous as the fpontaneous produce of the lands 
 can maintain, every further increafe of the popu- 
 lation muft depend on the accumulation of ftock 
 in the feveral employments. The quantity of 
 commodities, of which the farmer has the com- 
 mand, muft determine the number of people 
 which he can employ; the produce of their la- 
 bours muft, alfo, repay to him his advances. The 
 labourers employed immediately on the land, are 
 not the only ones, who derive employment and 
 fubfiftence from the ftock of the farmer. The 
 higher the ftate of cultivation, the fewer hands 
 are necefTary, when compared with the pro- 
 duce.- We muft confider, however, the number 
 of hands which have been employed, in getting 
 3 the
 
 ( 47 ) 
 
 the lands in a ftate to admit of it, and the number 
 neceflary to keep them in it. The mafons that 
 have been employed in erecting the neceflary 
 buildings, walls, &c. the manufacturers, alfo, em- 
 ployed in making the inftruments of agriculture, 
 Sec. The workmen employed in each manufac- 
 turing employment, muft, alfo, depend on the 
 flock of the manufacturer, who is alfo repaid for 
 his advances, by the produce of their labours. 
 Were we to conceive the whole of thefe commo- 
 dities, which are diftributed as wages of labour, 
 and as the fubfiftence of the owners of ftock, in 
 the hands of one perfon, the number of people, 
 which they were capable of fupporting, muft ne- 
 ceflarily be determined by their quantity; he 
 muft diftribute them in fuch a manner that, as 
 any particular article was confumed, it fhould be 
 _ replaced by the produce of thofe to whom he 
 had advanced fubfiftence. If it took, on an ave- 
 rage, fix months before the articles could be 
 finifhed, on which labour was employed, the 
 number of people which they could maintain, 
 muft be greater, than if twelve months were ne- 
 neceflary, and juft in proportion to the differ- 
 ence in time. If the farmers of Great Britain 
 could produce two crops in the year, each as 
 abundant as the ordinary one ; if manufacturers 
 could produce goods in one half the time at pre- 
 fent neceflary; the ftock at prefent in Great 
 
 Britain
 
 ( 48 ) 
 
 Britain could give employment to twice the num* 
 ber of people with equal eafe. The accumula^ 
 tion of confumable commodities, is not, how, 
 ever, the only thing neceffary ; it is alfo neceffa-r 
 ry, that the land be in fuch a ftate, as to. be ca-* 
 pable of producing a quantity of food and other 
 produce, within a given time, equal or greater, 
 than the confumption within the fame period: 
 this depends on the fixed ftock. The fame muu\ 
 take place in every manufacturing employment. 
 When the whple annual produce is confumed, 
 without a view to a reproduction, as the quantity 
 of commodities remain without any increafe, the 
 inhabitants muft remain ftationary, v/ith refpett 
 to their numbers. We fhall afterwards, point 
 out fome very material differences produced by 
 the manner of confumption. 
 
 The very great effects of improvements on the 
 Jand, and in manufacturing, muft be fufficientljr 
 evident, on comparing the annual produce and 
 population of two countries together, in which 
 different degrees of thefe improvements take 
 place. The lands in the interior parts of Ameri- 
 ca are, perhaps, as fertile, and enjoy as many na- 
 tural advantages, as thofe of Europe ; } et, the 
 inhabitants are not in the proportion of one to a 
 thoufand, and are even, for their numbers, mucli 
 worfe fupplied with the neceJTaries and conveni- 
 encies of life.
 
 ( 49 ) 
 
 An improved agriculture has nearly the fame 
 effect in producing food, as improved machinery, 
 in the production of manufactures; the effects, 
 perhaps, are not fo great, they are, however, con- 
 fiderable. It is obferved by Dr. Smith, who has 
 taken fo much trouble in collecting the prices of 
 corn, that its value is in general nearly the fame, 
 in Poland, France, and England. In the latter, 
 however, the rent of land, compared with the ex- 
 tent of the country, is much greater, than in 
 either of the former; this greater rent, the 
 farmer is enabled to pay, by his produce bearing 
 a certain price: but this, it feems, is fo much in- 
 creafed, on the whole, in confequence of im- 
 provements, that the price of each particular 
 portion is not affe&ed. In China, fuppofed to be 
 the molt populous country on earth, the price of 
 food is confiderably lower, than in any part of 
 Europe, which mull arife from its being produc- 
 ed by lefs labour than in other places, in confe- 
 quence of a more improved manner of cultiva- 
 tion, and a divifion of the lands, into fmall por- 
 tions, the effects of which we fhall fliew hereafter. 
 An effefct of accumulation, has been fuppofed, 
 the reduction of profit, and the nominal value of 
 goods. We have already (hewn, that the reduc- 
 tion of one fpecies of revenue, can affecl the no- 
 minal value of goods only partially : with refpecl 
 to the reduction of profit, which always takes 
 E place,
 
 ( 50 ) 
 
 place, it muft be attended by an equal increafe of 
 the revenues of either the landlord or the work- 
 men. While the revenue on the whole remains 
 ftationary, every depreffion in that of the one 
 order, muft be attended by an equal rife in that 
 of fome other; if the revenue on the whole in- 
 creafe, it muft be attended, either by the rife 
 in the nominal value of the revenue of each; or, 
 while this remains ftationary, the depreffion of the 
 nominal value of goods. It is in this latter wayj 
 that improvements in the arts ferve fociety. The 
 greater the quantity of every fpecies of goods, 
 produced by the labour and ftock of the fociety, 
 the lower the nominal value of each article muft 
 be; and this increafe of the quantity produced, 
 direclly arifes from accumulation. The fall of 
 the nominal value of goods, in general, can be, 
 by no means, owing to the fall of profit; becaufe, 
 as much as the value of goods was lowered by 
 the depreffion of profit, it would be raifed by the 
 rife in fome other fpecies of revenue. 
 
 As ftock, fays Dr. Smith, may increafe in a 
 particular employment, beyond what may be em- 
 ployed with advantage, fo may it increafe in eve- 
 ry employment. The Doclor, it is evident, drew 
 the general conclufion, from the particular fa6l; 
 but, although ftock may increafe in a particular 
 employment, unattended by the ufual advantages, 
 it is absolutely impoffible, that it can increafe 
 
 in
 
 ( 5« ) 
 
 in the fame manner in all employments. The 
 quantity of flock, employed in a particular way, 
 is regulated, only, by the quantity of the whole ; 
 it never is but a relative quantity, if the quanti- 
 ty of flock be doubled in every employment, 
 with the fame increafe of workmen, things muft 
 be precifely as they were; with this difference, 
 that as the quantity of goods, to be produced, is 
 doubled, greater divifions of labour may take place 
 in each employment; and thus, in a fhort time, 
 the annual produce may be more than doubled. 
 Six people may produce a quantity as 4, but tweve 
 may produce a quantity as 9 or 10. 
 
 We have already fhewn that, in the progrefs 
 of a fociety in riches, a greater increafe of 
 mercantile flock takes place, than of manufac- 
 turing and farming ; and confequently a greater 
 increafe of flock than of people ; but even inthe 
 manufacturing and farming employments, an in- 
 creafe of flock takes place, in a fmall degree, 
 without an equal increafe of workmen, on whom 
 manufacturers and farmers are more immediately 
 dependent. All improvements in machinery, 
 Szc. are made with a view of becoming lefs de- 
 pendent on the workmen; but, as in confe- 
 quence of thefe, the competition among the work- 
 men keeps wages at nearly their ufual rate, and, 
 as other people, alfo, employ their flocks, as it 
 accumulates, in procuring goods from other 
 E 2 places,
 
 t 5* ) 
 
 plaees, inftead of employing workmen immedi- 
 ately in produ&ion ; fo we fee the neceflity of a 
 greater increafe of ftock, than of people, and the 
 profits of the owners of ftock, kept up above 
 what they would fall to, if the introduction of 
 machinery and foreign commerce, or commerce 
 between diftant parts of the fame country, were 
 prevented. But although every increafe of 
 ftock is not attended by an equal increafe of 
 people, in the progrefs of accumulation ; yet, a* 
 it approaches to that ftate, which (as we have for- 
 merly obferved) admits of the greateft poflible 
 divifions of labour, and when ftock cannot be in- 
 creased in the mercantile employment, without 
 being alfo increafed in the others, the increafe 
 of people muft bear a greater proportion to the 
 increafe of ftock ; and when it has arrived at the 
 degrees above mentioned, every increafe of the 
 one, muft be attended by an equal increafe of the 
 other. When this takes place, the revenue of the 
 fociety, compared with the number of people, 
 muft be at its greateft height. The manner of 
 diftribution, in the mean time, undergoes fome 
 change, wages of labour rife, and profits of ftock 
 fall; but wages of labour rife in a greater de- 
 gree than profits of ftock fall; becaufe, the 
 quantity to be divided gradually increafes. 
 In the divifion of revenue, there are fome 
 other circumftances to be pointed out, be- 
 
 fides
 
 ( 53 ) 
 
 fides thefe, which will be remarked in the courfe 
 of the work. 
 
 When wc confiderthe manner in which accu- 
 mulation takes place, we fliall find further proofs 
 of what we have advanced. Accumulation, it is 
 generally fuppofed, takes place, when thofe who 
 derive a revenue, either from their land or (lock, 
 fpend lefs than their income. The perfon who 
 thus adds to his riches, may either hoard up his 
 favings, or employ them himfelf, or lend them to 
 thofe who will. If the profits of a merchant, who 
 has a ftock of £5000, amount to £500 per ann. 
 and he expend but two hundred, he may lay by 
 £300 yearly, and thus at the end of ten years, he 
 will have accumulated the fum of £3000; but if, 
 in place of hoarding it up, he employ it, he will 
 receive a profit on it, as well as on his original ca- 
 pital; and thus, at the end of the fame period, his 
 capital will be of a much greater value, than had 
 he allowed his profits to remain unemployed. In 
 the one cafe, it accumulates like fimple interell, 
 on a certain fum, in the other like compound. 
 
 In the prefent ftate of fociety, in which, no one 
 is under a neceffity of concealing his wealth, the 
 practice of hoarding is almoft altogether un- 
 known. The paffion which, in one ftate of focie- 
 ty, urges a man to conceal his treafure, in an- 
 other, induces him to employ it, by which he is 
 Jtaown to be poffeffed of it. If fociety got rich 
 E 3 by
 
 ( 54 ) 
 
 by hoarding; the productions of former ages 
 muft make a very confiderable part of the wealth 
 of every fociety; but if we take this into view, 
 we fhall perceive, that almoft every part of it, 
 has been the produce of the prefent year ; or at 
 moft, of the two or three preceding it (we fpeak 
 here only of ftock.) If we look at the various 
 productions of the manufacturer and farmer, the 
 almoft infinite variety imported by the merchant, 
 we (hall find, that they are almoft all intended for 
 immediate confumption, and that no part has 
 been the produce of former ages, or is intended 
 for the ufe of future. That focieties do not get 
 rich by the hoarding of money, is alfo abundant- 
 ly evident. The expences of the American war 
 amounted to about 170 millions fterling, a value 
 which no perfon fuppofed exifted in Great Bri- 
 tain, as money; much lefs, that the money in 
 Great Britain was diminifhed that amount. If 
 the wealth of a fociety confided in money, the 
 wealth of every individual fhould, alfo, lie in it ; 
 but if a man, who fays he is worth ten thoufand 
 pounds, be afked how much money he has, on an 
 average, in his poffeffion, he will moft probably 
 fay a fum not much exceeding two or three hun- 
 dred pounds. 
 
 When we compare the increafe of the people 
 in America, with the increafe of thofe in Eu- 
 rope, we fhall be ftruck with the difference, 
 but as, in accounting for this great increafe of 
 
 people,
 
 ( 55 ) 
 people, ve fhould be wrong in afcribing it to 
 their longevity ; fo, in accounting for the increafe 
 of wealth, we fhould be wrong in attributing it to 
 hoarding, either money or commodities. In 
 every cafe, we mall find, even in thofe countries 
 advancing fafteft into wealth, that the whole of 
 the annual productions are confumed. 
 
 In the manner of confumption, we are, there- 
 fore, to look for the caufes of the increafe of 
 wealth. Every fpecies of confumption, may be 
 reduced to two; that with, and that without, a view 
 to reproduction. The quantity of the annual 
 produce confumed in the one way, when com- 
 pared with the quantity confumed in the other, 
 mult at all times regulate the degree of the ad- 
 vance of fociety in riches. When farmers and 
 manufacturers fave a part of their profits, and 
 employ labourers with it, the whole of their profits 
 is as regularly confumed, as if they had purchas- 
 ed with it articles for their own immediate con- 
 fumption. In the one cafe, it is confumption 
 without, in the other, with a view to reproduc- 
 tion. The profits thus employed, are reproduc- 
 ed, and increafe their flock, and confequently 
 their ability of employing workmen. If land- 
 lords fave from their revenues, although they do 
 not employ it themfelves ; yet, by lending it to 
 others, to which they are prompted by their inte- 
 rs ft, the effects on the increafe of wealth and po- 
 E 4 pulatiou
 
 ( 56 ) 
 
 pulation is the fame. The more (Economical 
 farmers, manufacturers, merchants, and land- 
 lords, the higher muft be the rate of wages, 
 to enable the lower orders to rear up fami- 
 lies, in order that the increafe of people may at- 
 tend that of ftock. While the (lock of the coun-> 
 try remains unaugmented, if an increafe were to 
 take place in the number of its inhabitants, part 
 muft ftarve, or the whole be fatisfied to receive 
 lefs wages than ordinary. But, although, from 
 rigid ceconomy, the lower orders might be ena- 
 bled to bring up more numerous families, than 
 they do at prefent; yet, unlefs accompanied by a 
 certain increafe of ftock, it would be rearing up 
 their children to inevitable mifery. If the wages 
 of the parents were low, thofe of the children 
 muft be ftill lower. The powers of generation 
 are not the only limits to the increafe of the hu- 
 man fpecies. When the infant enters into life, 
 unlefs it meet with nourishment and fupport, it 
 neceffarily returns to nonexiftence. If a manu- 
 facturers fave^oo from his income, the number 
 of people which he can employ, will be increafed, 
 juft in the proportion which the faving bears to 
 his capital ftock. If the ordinary rate of wages, 
 however, had been (as it at prefent is in moll 
 of the countries of Europe) no more than fufh- 
 cient to enable the workmen to continue them- 
 felves (if we are allowed the expreflion ;) or, if the 
 
 population
 
 ( 57 ) 
 
 population be ftationary, in order to obtain the 
 additional number, he muft bid againft others, 
 which muft raife the rate of wages ; this competi- 
 tion muft be either greater or lefs, in proportion 
 to the degree of ceconomy amongft the feveral or- 
 ders. If the fame manufacturer, in place of faving 
 £s c o, fave £^700, he muft require a (till great- 
 er number of people to put it in motion, and 
 confequently the competition for workmen be- 
 comes ftill greater. Thus we fee the natural or- 
 der, from great favings, arife great wages ; from 
 great wages, numerous families. The happinefs 
 of the greater part of mankind, alfo, depends on 
 the accumulation of ftock, which, by keeping up 
 their wages, gives them a command of a greater 
 fhare of the annual productions of a country. 
 We call that the profit of the manufacturer, or 
 farmer or merchant, which they either confume, 
 or add to their ftocks; but how different are the 
 effects of each. In the one cafe he lives for 
 himfelf alone ; in the other he is only the ftew- 
 ard of the public. By eftablifhing a fund for 
 the fupport of a greater number of people, he 
 may with juftice confider himfelf, as not only the 
 author of the happinefs of multitudes, but alfo of 
 their exiftence. The effects of profits faved, and 
 of profits fpent, on articles of immediate con- 
 fumption, are fo different, that they fhould not be 
 known under the fame name. 
 
 In
 
 ( 58 ) 
 
 Jn foeieties advancing in wealth, vc fhall 
 
 fincl another difference, befides that of confump- 
 
 tion, when compared with thofe flationary or 
 
 declining; namely, a difference in production. 
 
 — -«=»«9©£>©ss=- 
 
 CHAP. IX. 
 
 Of Produclion, as determined by the State of Society. 
 
 Wi 
 
 E have already fhewn, that flock, in allow- 
 ing thofe numerous divifions of labour, which 
 ere fo beneficial to fociety,. anticipates the re- 
 venues of thofe orders, from which arife every 
 fpecies of revenue. We fhall fee, however, 
 that it alfo anticipates, in many cafes, the reve- 
 nue of thofe, who it might appear at firfl fight, 
 derive no revenue, until the productions of their 
 land or flock, have repaid all the expences which 
 bad been advanced. We may comprehend, land- 
 lords and thofe who lend money on interefl, in 
 this order. The landlord does not expect to be 
 paid his rent, until fome time after the tenant may 
 ijave held pofleflion of the land, nor the perfon 
 who lends his money on interefl, till the expira- 
 tion of a fettled period, when it may be fuppofed 
 the perfon to whom he has lent it, has actually 
 
 derived
 
 ( 59 ) 
 
 derived fome advantage from it; but the landlord, 
 in difpofing of the rent of his land, and the money- 
 lender of the intereft: of his money, will purchafe 
 goods, which perhaps have been produced a 
 number of months, or even two or three years 
 before. The money, which the manufacturer or 
 merchant borrows, is employed, perhaps, either 
 in the production or purchafe of goods, which 
 are fent to Spain to purchafe gold or filver; the 
 gold or filver purchafed with thefe commodities, 
 fent to China or India, to purchafe teas or muf- 
 lins; and before the article plirchafed by the 
 produce of his ftock may arrive, perhaps two or 
 thrte years, or even more, have clapfed ; at the 
 moment, however, the landlord receives the rent 
 of his land, or the money-lender the intereft of 
 his money, they may command thefe commodities 
 as certainly, as if they had been immediately 
 produced on the lands of the one, or by the flock 
 of the other. 
 
 It will evidently appear, therefore, that com- 
 modites are not produced in confequence of the 
 immediate demand for confumption, into which 
 every fpecies of demand muft finally be refolved. 
 The Indian, who weaves the muflin, may fay he 
 has a demand for it, but we trace this to the Eu- 
 ropean purchafer, and find that it is ultimately 
 regulated by confumption. It will follow then, 
 that as production is not in confequence of the 
 
 immediati
 
 ( 6o ) 
 
 immediate demand for confumption, it muft be 
 regulated by experience, or the fuppofition that 
 there will be, at a diftant period, the fame demand 
 for a certain article that there is at prefent. The 
 farmer, when he fows his wheat, does it with per- 
 fect confidence, that as people have eaten, fo 
 they will alfo at a future day. It happens, how- 
 ever, that in many cafes, people are under the 
 necefTity of employing their (locks on mere con- 
 jecture ; this is the cafe with thofe who are en- 
 gaged in producing articles of fafhion, who always 
 muft fuffer, if the demand fall fhort of their ex- 
 pectation. Demand is, however, frequently af- 
 fecied by other circumftances than a mere cha.'ige 
 of fancy, and when the ordinary courfe of it 
 meets with considerable interruption, it is then 
 called a ftagnation of trade. This always takes 
 place, when the productions of one country are 
 excluded from the ports of another, in which they 
 had ufually found a market : but as it happens 
 that the confumption of nations, lying near each 
 other, is pretty much of the fame kind, the arti- 
 cles produced for foreign confumption, find, in 
 the courfe of fome time, a market either at home 
 or in fome other country. Thefe interruptions, 
 however, muft always be attended by confidera- 
 ble lofs; in the firft place, as a greater quantity 
 of ftock had been employed in the production of 
 certain fpecies of commodities, for which the de- 
 3 mancj
 
 ( 6, ) 
 
 mand had ceafed, until thefe commodities are 
 fold, the fuperabundant ftock in particular em- 
 ployments, is wholly unproduclive, the manufac- 
 turer, who can employ workmen only by felling 
 his goods, muft be altogether incapacitated from 
 employing any for fome time; and, in the fecond 
 place, after thefe goods are fold, the manufac- 
 turer is obliged to turn his ftock into fome other 
 employment, of which a perfecl knowledge may 
 be fuppofed wanting, and in which ftock cannot 
 for fome time be very profitably employed : to 
 thefe we muft add the lofs of the fixed ftock, ne- 
 ceffary in the former occupation, and which, it is 
 more than a chance, may be ufelefs in the latter. 
 Workmen will alfo for fome time be thrown out 
 of employment, as well of others, as of thofe now 
 become ufelefs; for the ftock, in confequence of 
 a fudden interruption of the ordinary courfe of 
 the demand, will be conveyed to other employ- 
 ments, which it would appear were wholly un- 
 connected with thofe, in which the interruption 
 had originated. The demand for food appears 
 to be one of thofe which nothing could inter- 
 rupt; but if we fuppofe the manufacturers of 
 Birmingham and Sheffield, for example, em- 
 ployed in fupplying the market of France, as well 
 as of England, with hardware, and in confequence 
 of a war, the communication deftroyed, we mould 
 fee a quantity oC a certain fpecies of goods, 
 
 greater
 
 ( 62 ) 
 
 greater than that neceflary for the fnpply of the 
 home market. The workmen would be thrown 
 out of employment, nor could they for fome time 
 find it in any other; but the power which they have 
 of purchafing food, as well as other articles of 
 confumption, rauft depend on the regular pay- 
 ment of their wages. Thus the farmer, and every 
 perfon who employs labourers, muft be affe&ed, 
 and exactly in proportion as a greater or fmaller 
 fhare of the national induftry, is forced from one 
 channel into another. As (lock is turned from 
 the old channel, the bad effecls of the interruption 
 begin to difappear, and when it has got entirely 
 into the new, are no more to be obferved. 
 
 The worft effefts of an alteration in the common 
 courfe of the demand, are therefore, the imme- 
 diate ones; which are always bankruptcies, and 
 workmen thrown out of employment. Bankrupt- 
 cies may take place, although the merchant or 
 manufacturer be pofleffed of a considerable Mock, 
 if they cannot difpofe of it. It will fcarcely ad- 
 mit of doubt, that many of the firft trading 
 houfes, both in Great Britain and Ireland, would 
 have become bankrupt, had it not been for the 
 affiftance afforded by the governments of each 
 country, which muft have been followed by the 
 fall of lelfer ones; as it is well known in the mer. 
 cantile world, that many fmall houfes depend for 
 their credit on one great one. In a word, the 
 
 connection
 
 ( 63 ) 
 
 connexion between the feveral parts of a trading- 
 ftate is fo intimate, that what direclly aifefts one, 
 cannot fail of indirectly affecting the others, and 
 that, (as we have before obferved,) according to 
 the degree of the original interruption. 
 
 We fee, therefore, that the kind of the produc- 
 tions of the fociety, on which labour is employed,, 
 is regulated by the demand for confumption, at 
 the moment; and that the commodities at any time 
 at market, will be of the kind for which there 
 may have been a demand, whatever the demand 
 may be at that moment. 
 
 When the manufacturers, farmers, merchants, 
 or landholders, in place of purchafing articles for 
 their own immediate confumption, employ work- 
 men, (which mull take place whenever accu- 
 mulation takes place ; no matter where, for if it 
 accumulates fafter with the merchant than with 
 either of the other orders, part of it rauft be 
 turned from the mercantile employments, in order 
 that the equilibrium be preferved ; or, if it takes 
 place with the landlord, he lends it to fome per- 
 fon, fo that in every cafe it mud go to the em- 
 ployment of labour,) the demand, we fay, for the 
 commodities of the ordinary confumption of thefe 
 orders, no longer exifts in the fame degree. The 
 flock and labour ufually employed in producing 
 them, become ufelefs, as great part of the goods 
 muft remain unfold. Were a fudden change of" 
 
 manners
 
 ( 64 ) 
 
 manners to take place; that is, iflandholders and 
 the owners of flock, had ordinarily fpent their 
 whole revenues, in purchafing articles for their 
 own immediate confumption, and were fuddenly 
 to become ceconomical, we mould fee an effect 
 produced, of much the fame kind as that we have 
 been defcribing. We fhould fee an interruption 
 in the ordinary courfe of the demand, attended 
 by its concomitants, bankruptcies and want of 
 employment for workmen. In the courfe of fome 
 fliort time, they mud however find it, in the em- 
 ployments in which the demand had been in- 
 creafed, and as the goods were difpofed of in a 
 foreign market, for which the demand at home had 
 ceafed, the flock would be employed in fome other 
 way. Thus, after things had got into a regu- 
 lar courfe, we fhould obferve the demand of the 
 manufacturer, increafing from year to year, for 
 raw materials, and other things neceffary in his 
 employment; and as a greater number of hands 
 would be neceffary, from year to year, the wages 
 of labour muft rife, in order to allow of their in- 
 creafe. Thus we fhould obferve the demand of 
 the manufacturer, only, altered. The flock and 
 labour, which had been employed in producing 
 the articles which he had generally confumed, 
 and for which the demand had ceafed, would be 
 employed in raifing materials, and in fupplying 
 the market with other articles neceffary for ma- 
 nufacturing,
 
 ( «5 ) 
 
 nufacturing, and in furnifhing the articles of the 
 extraordinary confumplion of the workmen. It 
 is often alked, what would become of the nume- 
 rous workmen, employed in manufacturing the 
 articles of the luxury of the rich, were the de- 
 mand for them to ceafe? We anfwer, that their 
 being thus employed, is amongft the principal 
 caufes of that extremity of wretchednefs, under 
 which the lower orders of mankind groan in Eu- 
 rope; were they not employed in adminiftering 
 to the vices and follies of the great, they would 
 be employed in manufacturing articles of necef- 
 lity and convenience for themfelves. It is falfe, 
 that luxury is no evil in a commercial ftate, for 
 it directly ftrikes at the prefent happinefs of the 
 greater part of mankind, and prevents the poffi- 
 bility of their future increafe. 
 
 According, therefore, as the fociety is advanc- 
 ing, ftationary, or declining, fo will a greater or 
 fmaller proportion of the induftry of the country, 
 be employed either in producing articles which 
 ferve as the foundation of a reproduction, or em- 
 ployed in producing articles to be confumed, 
 without the poffibility of any. 
 
 In focieties advancing the faiteit in riches, a 
 greater proportion of the labour and flock is 
 employed in producing food and materials, and 
 tools neceffary for manufactures; that is, in agri- 
 culture and the ufeful manufactures. Hence, 
 F other
 
 ( 66 ) 
 
 other things being equal, the fociety advancing 
 the fafteft in wealth and population, will have the 
 lcaft foreign commerce. In this ftate of fociety, 
 the lower orders confume a great proportion of 
 the annual produce, and the different claffes of 
 men are ceconomical. 
 
 In focieties ftationary, the annual produ&ion 
 of commodities, for the confumption of the lower 
 orders, is only fufficient to allow the race to be 
 continued. In this ftate of fociety, the different 
 claffes of men fpend the whole amount of their 
 revenues. 
 
 In focieties declining, the production of the 
 commodities, for the confumption of the lower 
 orders, is not fufficient to allow the race to be 
 continued. In this ftate, a man who marries, 
 entails inevitable mifery on both himfelf and his 
 pofterity; it will therefore be avoided. In this 
 ftate, men fpend either more than their revenues, 
 and confequently encroach by degrees on their 
 flocks, or when they have acquired large fortunes, 
 they leave thue country, as in the Britifh poffef- 
 fions in India. In fuch focieties, the diminutioi* 
 of the ftock, is attended by a diminution of the 
 number of inhabitants, till at length they are not 
 more numerous, than the fpontaneous produce of 
 the land can maintain. Hence in focieties fta- 
 tionary and declining, there will neceftarily be a, 
 greater Jhew of riches. A greater proportion of 
 
 their
 
 ( 6 7 ) 
 their inhabitants, will be in towns. The ftock and 
 labour, which fhould be employed in procuring 
 the means of fubfiftence for a riling generation, 
 will be employed in the production of luxuries; 
 for the ufe of a few. Foreign commerce will 
 flourifh at the expence of agriculture, and the 
 ornamental manufactures, at the expence of the 
 ufeful. 
 
 Many authors have fpoken of the decline of 
 nations, as a thing infeparable from human af- 
 fairs, and appear to think it as inevitable, as the 
 approach of old age, and, at length, dilhblution to 
 man. But fociety, in the mafs, can never be 
 compared with the individual. The caufes of 
 the advances or decline of the former, we may 
 difcover and remove; but of thofe concerning the 
 latter, we are totally ignorant. To prove the 
 nccefhty of a diifolution of fociety, we muft prove 
 the foil lefs fertile, we muft prove the decline of 
 the mental and bodily faculties of man. 
 
 The flow increafe of moft of the nations of Eu- 
 rope, in wealth and population, and the decline 
 of fome, we fhall fhew to arife from two caufes, 
 not neceffarily connected with the prefent ftaie of 
 fociety, and the effects of which have been wholly 
 mifunderftood. 
 
 CHAP. 
 
 F 2
 
 ( 68 ) 
 
 CHAP. X. 
 
 6ne of the Caufes of the flow Progrefs of Europe t in 
 Population and Riches, 
 
 I 
 
 N no cafe, does the hiftory of man furnifh us 
 with an inftance of fo rapid an increafe in wealth 
 and population, as that prefented to us by the 
 United States of North America. If we compare 
 it with the advances made by the countries of 
 Europe, we fhall be ftruck by the immenfity of 
 the difference. One of the caufes of which, we 
 think, may be found in the law of entail, fo com- 
 mon in Europe. 
 
 When we compare the expences of men of 
 large landed properties, with their revenues, we 
 fhall find, that in place of contributing by ceco- 
 nomy, their proper fhare to the increafe of the 
 fociety in wealth and population, they direttly 
 prevent it. It will fcarcely admit of doubt, that 
 the expences of landholders are, in general, 
 greater than their incomes ; elfe, why fo many 
 eftates mortgaged, or why are they fo often to be 
 fold ? Nothing is more common, than to fee 
 people of fmall fortunes, leave to their children, 
 five, fix, ten, or even more times the fum, of 
 which they had originally been pofTeffed. But 
 
 who
 
 f «9 ) 
 
 who ever faw a fortune of £40,000 a year dou- 
 bled; or if fome favings are made from fo large 
 a revenue, they are applied to the purchafe of 
 the eftate of fome fpendthrift. When a man of 
 landed property fpends more than his income, it 
 is as deftru&ive to fociety, as when a manufac- 
 turer encroaches on his flock. The demand in 
 both cafes, is increafed for goods to be immedi- 
 ately confumed, without hope of reproduction. 
 If a landholder run in debt to the amount of five 
 thoufand pounds, that is, if he confume goods to 
 that amount, more than his revenue allowed, he 
 may make over part of his eftate to his creditors, 
 and thus replace to them the part of their ftock 
 which he had confumed; but, there muft ftill be 
 five thoufand pounds worth of goods in the fo- 
 ciety, lefs than there would have been, had he 
 Confined himfelf to his income. The particular 
 manufacturer or merchant, may not fuffer by his 
 extravagance ; but the effect on the population 
 and wealth of the country, is juft the fame, as if 
 they had deftroyed that portion of their ftock. 
 
 But, by the law of entail, a revenue is raifed 
 from the other orders of the ftate, which, were 
 it not for this law, would remain with them, and 
 confequently increafe their ability of accumula- 
 tion. If we afk the reafon of the low price of 
 corn in America, we are anfwered, that as the 
 people have no rent to pay, they may afford to 
 F 3 fell
 
 ( 7° ) 
 
 fell their produce at a confiderably lefs price. We 
 would afk, what would be the difference between 
 Europe and America in this refpeft, if the law 
 of entail were aboliflied, by which, in the courfc 
 of half a century, or a little more, eftates would 
 be fo much divided, as to oblige their poffcflbrs 
 to become their cultivators ! There could be 
 none. The neceflity of ceconomy to thofe pof- 
 fefTed of fmall fortunes ; the prevalence of man- 
 ners contributing to encourage it, would together 
 confpire to increafe the wealth of the fociety, ac- 
 companied by an equal increafe in the numbers, 
 and in the happinefs of the lower orders of the 
 people. The perfon who is both the owner and 
 cultivator of the land, muft always have an inte- 
 reft in improving it, as he is certain of enjoying 
 the advantages both of the landlord and the far- 
 mer. The rapid increafe of ftock on the land, in 
 confequence of the ceconomy attendant on fmall 
 fortunes, muft, in a fhort time, increafe the annual 
 productions to fuch a degree, as to fink every 
 particular portion of it confiderably in value: the 
 ability of accumulation on the land muft be lef- 
 fened, and the profits of the ftock employed on 
 it, at length, approach nearer to the profits of 
 ftock in other employments. 
 
 Thefe changes would, however, be attended by 
 others of the greateft importance ; by the fall of 
 the price of provifions, labourers on the ordinary, 
 
 or
 
 ( 7' ) 
 
 or on lefs wages, would be enabled to rear up 
 more numerous families; the expences of the 
 owners of flock may be reduced, and thus, 
 their ability of accumulation increafed, fo as to 
 attend the increafe of population. In a word, a 
 law which would abolifh that of entail, might 
 truly be confidered as the agrarian law, which 
 would give to the mcaneft citizen, an immediate 
 and direct intereft in every portion of the land of 
 the ftate. 
 
 But the baneful effects of the law of entail, may 
 be traced much further. Men of large fortunes 
 give the bias to the manners of the people; thus, 
 we fee a fpirit of expence pervade every order of 
 men, where the ariftocracy is confiderable. Every 
 man leaves his own ftation, to appear in that 
 above him. From a pride which makes every 
 one unwillingly acknowledge a fuperior; what he 
 cannot be, he endeavours to appear. Nature, 
 for important purpofes, has eftablifhed in man, a 
 conftant defire for aftion. In every fituation of 
 life, there is fome object, to which he bends his 
 defires and exertions ; but the actions of men in 
 fociety, are never indifferent, they muff produce 
 fome good, or fome bad effect. Is it not then 
 particularly incumbent on us, that we difcover, 
 if poffible, the circumftances under which thefe 
 defires may be exerted, fo as to become ufeful ? 
 The citizen, in promoting his own intereft, we fee 
 F 4 diffufing
 
 ( 7* ) 
 
 diffufing plenty and happinefs; the monarch, de- 
 folating nations, and entailing mifery on pofte- 
 rity *. From whatever caufes thofe circumftances 
 arife, which remove from certain individuals the 
 neceflity of applying themfelves in a manner 
 which may be ufeful to fociety, they muft per- 
 vert the natural order of things; we may confider 
 them as not only the fource of many of the mife- 
 ries of mankind, butalfo of the vices. Amongft 
 thefe caufes, the law of entail ftands moft con- 
 spicuous. 
 
 In fome inflances, we fee the owners of large 
 fortunes, animated with public fpirit: in times 
 of diftrefs they afford fome aflillance to the lower 
 
 # *' Nobility is not hereditary in China." — "However illus- 
 trious any man has been, nay, though he had been raifed to the 
 higheft dignity of the empire, the children, whom he leaves be- 
 hind, have their fortune to make, and if they have not a great 
 deal of fpirit, or luve their eafe, they fink to the rank of the 
 vulgar, and are often obliged to follow the meaneft profeflfion : it is 
 true, that a perfon may fucceed to his father's pofl'effions, but not 
 to his dignity or reputation j he muft rife by the fame degrees 
 as hjs father did," 
 
 Du Halde. 
 
 « There are four forts of profeflions, fay the Chinefe philofo- 
 phers, abfolutely neceflfary in the empire, which are fufhcient 
 for providing neceffaries, and maintaining good order, viz. that 
 of the learned, that of the hufbandmen, that of the mechanics, 
 smd that of the merchants." 
 
 Dv Halde. 
 
 orders;
 
 ( 73 ) 
 
 orders; but the man who gives even a tenth part 
 of his income in charity, is fcarcely known. But 
 although fuch inftances were more general; yet, 
 the very exertion of this generofity, fuppofes 
 injuftice: were things in their natural (late, that 
 is, the ftate confident with public and private 
 juftice, (for the law of entail is an equal violation 
 of both,) it would be out of the power of any 
 clafs of men, to offer any confiderable afliftance 
 to another; nor would there be any need of this 
 afliftance, as the lower orders would enjoy that as 
 their right, which they fo very feldom receive 
 from courtefy *, 
 
 * " The prefent European communities, (fays a warm fup- 
 porter of the rights of mankind,) appear to be all more or lefs 
 infe&ed with prejudices, not eafily eradicated, arifing from the 
 unnatural and feudal claffification of ftates into nobility, clergy, 
 burghers, peafants, &c. The whole community, except the two 
 firft clafTes, are called Roturiers in France, Commons in Great 
 Britain, and Ofrelfe, (that is unfafe,) in Sweden. Thefe dif- 
 tinftions appeared to have encouraged pride and idlenefs in the 
 firft clafs, bigotry and intolerance in the fecond, and to have 
 increafed the mifery and poverty of the whole laft clafs, who 
 form, however, the greateft part of the ftate." 
 
 Wadstrom's Eflay on Colonization, § 606. (3.) 
 
 CHAP.
 
 C H ) 
 
 C II A P. X. 
 
 Of the Accumulation of Stock on Land. 
 
 -LT muft be evident, that no part of the rent of 
 the landlord, which is derived from the employ- 
 ment of flock on the land, is employed fo as to 
 increafe its produce. To every increafe of flock 
 on the land, and consequently production, we 
 mufl look to the favings of the farmer. If the 
 farmer fold his produce, at market, at a price no 
 more than fufhcient to repay himfelf for his ex- 
 pences, with his ufual profits, it mufl be evident, 
 that (lock might increafe on the land as fafl as in 
 the ordinary way, in which the price of the pro- 
 duce, muft not only repay the farmer for his ex- 
 pences, but mufl enable him to pay a certain rent 
 to his landlord ; but, by fo great a fall in the price 
 of provifions, workmen would be enabled to 
 rear more numerous families; merchants, manu- 
 facturers, &c. by a reduction in their expences, 
 would be better enabled to accumulate; there 
 mufl foon be a demand for provifions, and other 
 kinds of produce, which fo flow an increafe of 
 flock on the land could not fupply. The quan- 
 tity being fmaller than that for which there was a 
 demand, mufl occafion a rife in its price, which, 
 
 by
 
 f 75 ) 
 
 by railing the profit of the farmer, mull enable 
 him to fupply the market, as plentifully as the 
 demand required. If things be left in a ftate in- 
 to which they would, of their own accord, fall, 
 it is abfolutcly impoffible, that fo eifential an ar- 
 ticle as food can be wanting, as the moment the 
 quantity is leffened, the price is raifed, which 
 permits a greater production; and the moment 
 the quantity is increafed beyond the regular con- 
 fumption, the price muft fall, which, prevents 
 more (lock and labour from being employed, 
 than what at any time may be neceffary. 
 
 The nature of (lock, which has been laid out 
 on the land, is, in fome circumftances, different 
 from the ftock in other employments, from which 
 it will more generally happen, that the market 
 muft be overftocked than underftocked. From 
 the moment, ftock has been employed in drains 
 ing, inclofing, erecting buildings, &c. it is funk 
 in fuch a manner, as never afterwards can be 
 withdrawn. If the lands be fold, the purchafer 
 has the fame intereft in making the moft of the 
 improvements. In many manufacturing employ- 
 ments, and altogether in the mercantile, ftock 
 may be withdrawn from the production or im- 
 portation of certain fpecies of commodities, to 
 the production or importation of others. Mer- 
 chants and manufacturers have it alfo in their 
 power to remove their flocks altogether from the 
 
 country,
 
 { 76 ) 
 
 country, which is by no means the cafe with the 
 farmer. Although the annual production of food, 
 and other kinds of produce, exceed the annual 
 demand or confumption, yet, it muft be the in- 
 tereft of every farmer, to raife as much as poffi- 
 ble from his lands, on the quantity of which hi* 
 profits muft depend, whatever the quantity be ne- 
 ceflary for the regular confumption. If the 
 quantity of the confumption of a fociety be as 
 50, and this be furnifhed by a number of people 
 as 25, each perfon will furnifh a quantity as 2; 
 but, although the confumption mould remain at 
 50, if one of thefe 25 be able to increafe his pro- 
 duction of 2 to 3, his profit muft be increafed, 
 and juft in proportion to the increafe of the 
 quantity; as, although the whole quantity of 51 
 fold for the fame fum as the quantity of 50 ; yet 
 his particular profit muft be augmented, as his 
 produce would always fell for half as much more 
 as the produce of any other perfon, that being 
 the difference in quantity. 
 
 In everyemploy ment, manufacturing as well 
 as farming, it muft always be the intereft of the 
 individual, to increafe his produce as much as 
 poflible; and thus, by the necefTity of exertion 
 becoming general, each is more plentifully fup- 
 plied with the articles of his confumption. Com- 
 binations fometimes deftroy the good effects 
 which muft arife from this general neceflity of 
 
 exertion;
 
 ( 77 ) 
 
 exertion : thefe are in every cafe hurtful to foci- 
 ety, as well thofe into which men of particular 
 employments will enter, if allowed, as thofe al- 
 lowed, and fometimes countenanced, by govern- 
 ment, as corporations, Sec. 
 
 The fuperior advantages of flock employed ill 
 the land, to flock otherwife employed, have been 
 by fome authors much infilled on, who think it 
 particularly behoves government to encourage 
 this mode of its application; but this is an abfur- 
 dity. After a certain quantity has been difpofed 
 of on the land, to lay out more mufl not only be 
 ufelefs but unprofitable. If more provifions be 
 raifed than may be neceffary to fupply the con- 
 fumption, of what importance, we would afk, or 
 ofwhatufe, is the fuperabundant quantity ? would 
 not the flock and labour employed in procuring 
 it, have been much better employed in raifing 
 other articles of confumption ? That the quan- 
 tity can never be lefs than to fupply the demand 
 for confumption, is fecured, as in the manufac- 
 turing employments, by the interefl of individu- 
 als; as, whenever the quantity is leffened, the 
 price is raifed, which gives encouragement and 
 ability to increafe the production. In the natu- 
 ral order of things, the price of provifions, &c. 
 mufl always enable the farmer to increafe his 
 flock, and confequently his productions, in the 
 fame degree that flock increafes in other em- 
 ployments.
 
 ( 7« ) 
 ployments. The increafe of flock, in both, be- 
 ing attended by an increafe of population. 
 
 In countries, where the lands are divided into 
 fmall portions, as the price of provifions muft be 
 lower, than in thofe where the law of entail takes 
 place, it will happen, that the demand from other 
 countries muft raife the price above that which 
 would generally take place, if exportation were 
 prevented* Thus the demand for corn has al- 
 ways been confiderable in North America, which 
 muft have kept its price above what it would 
 have been at, had the production been regulated 
 by internal confumption. The increafe of price 
 in this way is, however, not attended by thofe 
 baneful effecls, occafioned by the high price, in 
 confequence of the law of entail. Whatever the 
 profits of the farmer may be, while he continues 
 to fave them, there muft be an increafe of the po- 
 pulation. If the great emigration from Europe 
 has not kept down the rate of wages, they muft 
 have been raifed with the price of provifions* 
 By this emigration, the labouring part of the 
 community muft fuffer little, as it either reduces 
 the rate of their wages, or keeps it ftationary, 
 while the price of provifions is raifed, in confe- 
 quence of the increafed demand, occafioned by 
 the prefent fituation of the nations of Europe. 
 The extraordinary rife in the price of provifions 
 in America, muft be owing, in a great meafure, 
 
 to
 
 ( 79 ) 
 
 to the fuddennefs of the demand; mould the 
 fame demand continue, the great profits of the 
 farmer muft, in a fhort time, enable him to raife 
 a quantity fufficient to fupply the foreign de- 
 mand, as well as internal confumption, at a lower 
 price. While the farmer enjoys moil of the ad- 
 vantages arifing from the foreign demand, mer- 
 chants and manufacturers mull fuffer a little, in 
 confequence of their expences being increafed, 
 and by the rife of the wages of labour, unlefs as 
 we have already obferved, they be kept at their 
 ufual rate, by the emigration from Europe. 
 All the advantages of the American farmers we 
 fhall find, however, only temporary, and we mall 
 fee his profits, the moment the nations of Europe 
 get into a fettled ftate, fall as much below 
 mediocrity, as they are atprcfent above it; for the 
 great demand mult induce him to increafe his pro- 
 duce by every means in his power, he muft put him- 
 felf to more than an ordinary expence (which he is 
 enabled to do by his extraordinary profits) to in- 
 creafe it as much as pofhble. But whenever foreign 
 demand ceaies, or is lelfened, the price of every 
 portion of his produce muft fall to a price con- 
 fiderably lower, than that neceffary to enable 
 him to increafe his flock, as fall as it increafes 
 in other employments. His profits muft be 
 lower than ordinary,until the increafe of flock and 
 in other employments and of population, allow 
 2 of
 
 ( 8o ) 
 
 of the confumption of the whole of his produce; 
 his profits will then rife to a level with the 
 profits of others and (if we are allowed the ex- 
 preflion) he will Mart from a new goal. While 
 the price remains lower than ordinary, merchants, 
 manufacturers, Sec. will enjoy more than their 
 proper fhare of the annual productions, as in the 
 other cafe they muft enjoy lefs ; particularly 
 manufacturers, as the reduction of the price of 
 provifions may enable the labourers to take lefs 
 wages. The benefit arifing from a reduction of 
 his own expences he muft enjoy in common with 
 others. 
 
 We have here fuppofed the alterations in the 
 price of provifions to affeCt merchants and manu- 
 facturers nearly equally; but, perhaps, this is not 
 the cafe, as the effects muft be only temporary. 
 As wages of labour are a good deal regulated by 
 the price of provifions, and as the manufacturer is 
 more immediately dependent on workmen, than 
 the merchant, he muft neceffarily be more affect- 
 ed. Great differences of profit cannot indeed 
 take place fo long between manufacturing and 
 mercantile, as between thefe and the farming em- 
 ployment. In the courfe of a fhort time, the 
 merchant can turn the whole of his ftock into the 
 manufacturing employment. As the value of it 
 is conftantly coming into his hands in money, he 
 has only to (top purchafing, in order to have it 
 
 in
 
 ( 8i ) 
 
 in a form the moft convenient for applying it, 
 as may feem moft for his advantage. The ma- 
 nufacluier, alfo, may turn in a fhort time his 
 flock into mercantile, without much lofs. But as 
 the farmer never receives the whole of the 
 value of his Mock in the ordinary courfe of his 
 bufinefs, when he wifhes to change his employ- 
 ment, he mult fell it for what at that moment 
 may be made of it, which is feldom regulated by 
 what it coft him. Changes, however, from one 
 profeffion to another, are, as we have before ob- 
 ferved, but feldom made, except when great in- 
 terruptions in the ordinary courfe of trade, make 
 them abfolutely neceffary, and are then more or 
 lefs fubjecl; to inconveniencies. 
 
 CHAP.
 
 ( 82 } 
 
 CHAP. XII. 
 
 Of Demand, as it ajftcls the Quantity of Production. 
 
 I 
 
 F we take into view, only the fa8, that with 
 every individual, the quantity of commodities 
 which he produces, and the quantity of {lock 
 which he can employ with advantage, in a parti- 
 cular manner, muft depend on the demand; we 
 might conclude, that there are certain circum- 
 it.ances, which regulate the quantity of commo- 
 dities produced on the whole. But when we 
 confider the quantity of the commodity produc- 
 ed or imported by the individual, as a quantity 
 relative to that produced on the whole, we fhall 
 reject, this opinion, and confider demand, what it 
 really is, a neceffary attendant on production. 
 Although the demand of the fociety, is, at all 
 times, regulated by its productions, which it 
 never can exceed, and which it at all times muft 
 accompany; yet, at any particular moment, the 
 demand muft have as great an influence in deter- 
 mining the quantity of ftock, which can be en- 
 gaged with advantage in a particular employ- 
 ment, as if the demand was totally independent 
 of production. If we fuppofe, that one of two 
 nations was exactly twice as populous and twice 
 
 as
 
 t 83 ) 
 
 as rich as the other, their confumption confiding 
 of the fame fpecies of commodities; it muft fol- 
 low, that there would be a twice greater demand, 
 and twice the production for a certain article, in 
 one fociety, than in the other. It might, how- 
 ever, be very poflible to produce or import into 
 the minor fociety, as great a quantity of a certain 
 article as in the major: but this, it is evident, 
 muft be contrary to the intereft of thofe who 
 Would thus employ their flocks. It is neceffary, 
 therefore, to diftinguifh between demand, as it 
 relates to the individual, and as it relates to the 
 fociety. 
 
 In a former chapter, we have had occafion to 
 remark the alterations which fometimes take 
 place in the demand, and confequently in produc- 
 tion : but demand can never regulate more than 
 the fpecies of production ; of the quantity of 
 production, it is properly only an afpecl. While 
 there is production, there muft be demand; nor is 
 it pbffible to conceive one without the other*. 
 From what we have already faid, we believe the 
 reader will find no difficulty in perceiving the 
 
 * To fuppofe that there may be a production of commodi- 
 ties without a demand, (provided thefe commodities be of the 
 right fpecies, and no individual can have an intereft in producing 
 any other) is as abfurd as to fuppofe, that the revenues of the fe- 
 veral individuals compofing the fociety may be too great for 
 their confumption: indeed the former fuppofition neceflarily in- 
 cludes the latter, 
 
 C 3 truth
 
 ( 8i ) 
 
 truth of the propofition. We fhall, however, ex- 
 amine the effect of hoarding money on demand 
 and production, which appears lead favourable 
 to what we have advanced. In the prefent day, 
 it almoft never takes place; but, in pointing out 
 the effects in this view, it will ferve to remove 
 every doubt. If any fet of men were to lay up 
 the money, which reprefents their fharc of the 
 revenue, in place of employing it in the pur- 
 chafe of goods; it is evident, that the quantity 
 in circulation muft be diminifhed, by degrees, 
 and unlefs fupplied from a new fource, muft 
 in the end wholly difappear. We have then to 
 afk, would it be the intereft of any fet of men to 
 make up the deficiency in the circulation ? We 
 fay it would ; and that equal to the quantity 
 hoarded up. In this place, we fhall take for 
 granted, what we fhall demonflrate more fully 
 in another chapter, That the value of money 
 depends on its quantity. Money is an article 
 of fuch fmall bulk, as to be eafily conveyed 
 from one country to another, in which it may 
 bear a greater value. It accordingly ferves as 
 the medium of exchange, as well between differ- 
 ent countries, as between the individuals of the 
 fame country. The merchant, who exports the 
 productions of Great Britain to Portugal, fells 
 them at a certain price, and the merchant, who 
 imports the productions of Portugal, purchafes 
 
 them
 
 t 85 ) 
 
 them at a certain price. Thus, the intereft which 
 the merchant of one country has in importing the 
 goods of another, nmft be always determined by 
 the price at which he purchafes, and that at which 
 he fells. This neceffarily confines the commerce, 
 between two countries, to the importation and 
 exportation of certain commodities only, in the 
 production of which one may have, over the 
 other, either a natural or acquired fuperiority. 
 This fuperiority, in production, mull alfo be great 
 enough, to allow 7 the expences attendant on con- 
 veyance, Sec. 
 
 It is not the bufinefs of the merchant, however, 
 to confider the nature of the caufes of this lower 
 price ; it is always enough for him that it is fo, and 
 by the fact he muft always be regulated. But al- 
 though the nominal value of goods, in a fociety in 
 which freedom of commerce is allowed, muft be re- 
 gulated by the circumftances already mentioned, 
 yet between different focieties, there maybe others. 
 When we fay that, in a certain fociety, an article, 
 bearing a given value, is juft diffident to fecure 
 to the manufacturer all his expences, together with 
 the ordinary profit, there is always a relation 
 fuppofed between the fum, reprefenting his ex- 
 pences, profits, Sec. and the commodities, which 
 that fum is capable of commanding. We have 
 feen, that the gold and filver imported into Eu- 
 rope from America, affected very confiderably 
 G 3 the
 
 ( 86 ) 
 
 the value of all goods and revenue. A manu- 
 facturer, would perhaps be better paid, in receiv- 
 ing two (hillings, before the difcovcry of the 
 American mines, than afterwards in receiving 
 four, as the value of each portion of money was 
 fo much reduced, in confequence of the greater 
 quantity. Thus, although we fuppofe that in 
 every foeiety the nominal value of goods is re- 
 gulated by the quantity of labour and Hock cm- 
 ployed in their production; yet, the nominal va- 
 lue of goods, in general, may be different in dif- 
 ferent countries. A commodity, bearing a value 
 of five millings in Great Britain, may be fufficient 
 to fecure to the manufacturer his proper profits, 
 &c. But in Portugal, amanufacturer employing the 
 fame quantity of flock and labour, (other things 
 being equal) might require a fum of the value of 
 fix millings, and yet, receive only his proper pro- 
 portion of the revenue; that is, the value of mo- 
 ney may be lower in Portugal than in England. 
 
 In addition to the commerce, arifing from the 
 advantages which one country enjoys over an- 
 other, we therefore may difcovcr the fource of a 
 more extcnfive connexion, in the differences 
 which may take place, in the nominal value of 
 goods, in general, between different countries. It 
 pnw t admit of doubt, that if goods were con- 
 fidently lowered in their value by any means in 
 England, that it mult prove of advantage to fomc 
 
 individuals.
 
 ( 8? ) 
 
 individuals, to carry a greater quantity to the mar- 
 kets of other countries; and as the quantity of 
 gold and filver, which flowed into the different 
 countries of Europe, raifed the nominal value of 
 every fpecies of goods, fo any caufe which con- 
 tributes to leffen the quantity of money in a 
 country, nmft on the other hand lower their va- 
 lue. If, therefore, a quantity of money be 
 withdrawn from circul uion, cither by hoarding 
 or otherwife, the nominal value of goods muft be 
 affected; they muft consequently be carried out, 
 and replaced by money. As the quantity necef- 
 fary for the circulation is introduced, if the caufe 
 ceafe to operate, the nominal value of goods rifes 
 to the lame level as the nominal value of goods 
 in other countries. If money continue to be 
 hoarded, there muft be an annual exportation of 
 goods, Sufficient to replace the quantity annually 
 withdrawn from circulation. The demand, in 
 this cafe, alfo, would be equal to the annual pro- 
 duction, which would, however, be different in 
 fpecies. The manufacturers who had employed 
 their ftocks in the production of goods for which 
 the demand had ceafed, (in confequence of cer- 
 tain people hoarding money, in place of putting 
 it again into circulation, by the purchafe of 
 goods,) would be obliged to turn their ftocks to 
 the production of goods for the Spanifh or Por- 
 tugal market. But as, in the cafes already men- 
 G 4 tioned,
 
 f 88 J 
 
 tioned, they mud fufferfome temporary lofles and 
 inconveniences, until they had difpofed of the 
 goods which at home had been rendered unfaleable. 
 Thus the effects of hoarding, on the population 
 and riches of the fociety, would be precifely the 
 fame, as if the flock and labour had been em- 
 ployed in the manufacturing of articles intended 
 for confumption, without a view to reproduction. 
 It can never be of the leaft confequence to fo- 
 ciety, whether its ftock and labour be employed 
 in the production of articles of luxury, to be 
 confumed at home, or in the production of arti- 
 cles to be fent abroad for the purchafe of gold 
 and filver, to be buried. The application of 
 {lock and labour is, in both cafes, unattended by 
 any real advantage. The effects, however, of 
 fuch a practice, would not be confined to the 
 country in which it took place. The low price 
 of the commodities carried to the countries, 
 -which had the command of the mines, coming in- 
 to competition with their manufactures, muft re- 
 duce the profit in many employments. The de- 
 mand for gold and filver being increafed, muft 
 raife the profits of mining, which are at prefent 
 (it is fuppofedj not higher than in other employ- 
 ments: many mines would be worked which now 
 lie neglecled, not being able to pay the expence 
 of working. Thus, after things had gotten into 
 ^ regular courle, we fliould pbferve a greater 
 
 proportion,
 
 ( 8 9 ) 
 
 proportion of the flock of the country, in which 
 the money was regularly laid up, employed in 
 manufacturing articles for the purchafe of the 
 extraordinary quantity, and the quantity of flock 
 driven out of employment in the other, in con- 
 fequence of the extraordinary quantity of goods 
 introduced, would be employed in fupplying the 
 demand for the unufual quantity of gold and fit* 
 ver. In both countries, there would be the fame 
 abfolute demand and production as formerly, but 
 different in kind. 
 
 From whatever caufes a demand for gold and 
 filver may arife, whether from their being a 
 fmaller quantity of them in one nation than in 
 another, which by lowering the nominal value of 
 goods, mufl induce individuals to carry money 
 thither, for the purpofe of purchafing them; or 
 whether, although there be a large quantity, vet 
 little remains in circulation, it mult be the inte- 
 rcft of individuals to fupply that demand. Mo- 
 ney mufl flow into fuch a country, as the other 
 nations of Europe received it from Spain, after 
 the difcovery of the mines of America: for, al- 
 though the Spanifh government attempted to re- 
 tain the exportation of it, by every means which 
 ingenuity could devife ; yet the interefl which 
 was found in carrying it to other nations, where 
 the nominal value of commodities was lower, was 
 fo great, that to prevent it wholly was impofTi- 
 
 ble-
 
 ( 9° ) 
 
 ble: accordingly, it is fuppofed with a great de- 
 gree or probability, that the deftrufction of the 
 Spanifh manufactures was in a great meafure oc- 
 cafioned, by the difcovery of America. 
 
 Thufc, in whatever way we view the fubjeft, 
 we fee the abfolute impoffibility, that, in the na- 
 tural (late of things, any part of the national ca- 
 pital, can remain for any conudcrable time unem- 
 ployed. Every interruption, however, in the or- 
 dinary courfe of the demand, muft necelTarily be 
 attended by fome bad effects. To form, there- 
 fore, a right judgement of them, we muft take in- 
 to view the fituation of focieties, with refpeel to 
 their connexions with each other; as, mould we 
 endeavour to draw our conclufions from the 
 changes which take place in one only, they muft 
 necelTarily be erroneous, as the affairs of com- 
 mercial Itates are never indifferent to each other. 
 
 CHAP.
 
 ( 9i } 
 
 CHAP. XIII. 
 
 Money, 
 
 A, 
 
 .FTER the divifion of employments lias taken 
 place, as the labours of each individual are em- 
 ployed on an article, of which in every cafe he 
 confumes little, and in many none at all, the ne- 
 ceffity of fomething which may feprefent his la- 
 bour, in order that he {hall, at the general market, 
 exchange it for fomething of equal value, is mani- 
 feft. Money, therefore, is one of the links, which 
 compofe the chain on which ci . Ilized fociety de- 
 pends. As it was necefTary to fix on fomething 
 which might be durable, and alfo, which could 
 not be increafed at pleafure, the metals have ge- 
 nerally performed this office, particularly gold 
 and filver. We have feen, however, that the va- 
 lue of each portion, is by no means unalterable, 
 but regulated by the quantity in circulation. 
 The great quantity introduced into Europe, after 
 the difcovcry of America, confiderably reduced 
 their value in the European market. 
 
 Authors have, in general, contented themfclves 
 
 with the fact; but, in a work which profefles an. 
 
 attempt to explain the principles of this fcience, 
 
 it is necefTary to go farther, and if pollible, to get 
 
 3 a view
 
 ( r- ) 
 
 a view of the circum fiances which fo arbitrarily 
 give a value to certain portions of them, at dif- 
 ferent times. 
 
 As the revenue of every individual is diflribut- 
 ed and regulated in quantity by money, and as 
 every portion of the real revenue, that is, the 
 produ&tions arifing from the flock and labour of 
 the fociety, is claimed by fome perfon; it mult 
 neceffarily follow, that there exifts a relation be- 
 tween the nominal value of goods, or what is 
 called their price, and the nominal value of the 
 revenue of each; that is, when commodities are 
 at a certain price, the labourer muft receive a 
 certain rate of wages, and the man of landed 
 property a certain fum as rent. The profits of 
 the owners of {lock, are determined by a certain 
 fum per cent, on its value. The nominal value 
 of goods can therefore only regulate the nominal 
 value of their flocks, and can have no influence 
 in determining the number of pounds per cent. 
 In comparing the quantity of commodities, 
 which any given quantity of money can command, 
 at different times, we fhall difcover, that money, 
 like other things, is changeable in value; at any 
 particular moment, however, it is much lefs fo than 
 other things. It is lefs fubjefl to decay, nor is 
 the quantity brought to market, (or gold and fil- 
 ver which amounts to the fame, as they may at 
 pleafure be converted into money,) fubjeft to 
 
 thofe
 
 ( 93 ) 
 
 thofe fudden alterations, that many others things 
 are. In conceiving the manner, therefore, in 
 which its value is altered, we fhall be affilted, by 
 fuppofing either a fudden increafe or diminution 
 of it. 
 
 In the ordinary ftate of things, the nominal 
 value of goods is always determined, by the quan- 
 tity of money which appears for their purchafe. 
 When the value of the rent of the landlord, and 
 the other orders, as reprefented in money, remains 
 ftationary, if the quantity of the productions, by 
 any caufe, be either increafed or diminilhed, we 
 always obferve a change in their nominal value. 
 When the quantity of the annual production of 
 corn, for example, is leflened or increafed, we 
 always obferve a rife in its price, in the one cafe, 
 and a fall in the other; that is, while the quan- 
 tity of money remains the fame, if the quantity 
 of the productions be leflened, the nominal value 
 of goods mult rife. But we may reverfe the pro- 
 pofition, and it will be found equally true, that if 
 the quantity of productions remain ftationary, 
 and the quantity of money be increafed, that the 
 nominal value of goods mult rife. If we were to 
 conceive each individual to become fuddenly 
 po fie fled of twice the ordinary quantity of money, 
 while the quantity of the productions remained 
 the fame, no cue perfon could receive more than 
 the quantity he had ordinarily procured, without 
 
 depriving
 
 ( 94 ) 
 
 depriving fome other perfon of a part of his pro- 
 per proportion. But each endeavouring to pro- 
 cure as much as poflible, it could have no other 
 efifecl: than to raife the nominal value of goods, 
 juft in proportion to the increafe of the quantity 
 of money. 
 
 Alterations in the nominal value of goods, un- 
 der thefe circumftances, are abfolutely neccffary 
 for the well being of fociety. If, when the quan- 
 tity of the annual productions was lelfened, the 
 price were to remain the fame, it muft be attend- 
 ed by the worft pofTible effe&s. If, when the 
 quantity of corn, for example, was fmaller than 
 ordinary, the price were to remain as ufual ; as 
 the confumption of every order would remain 
 the fame, the quantity mull be confumed before 
 the return of harveft. Another good purpofe 
 anfwered by the rife of price, under thefe cir- 
 cumftances, is, that particular individuals do not 
 fuffer. If the fanner were to fell his corn at the 
 ordinary rate, when his produce was fmall, he 
 muft fuffer very confiderably. 
 
 If we conceive, on the other hand, each indivi- 
 dual fuddenly deprived of half the quantity of 
 money, which had ufually reprefented his reve- 
 nue, it muft have the contrary effe£t. The de- 
 mand might at firft be for only half the ufual 
 quantity, but the farmer muft fell his produce, 
 as well to purchafe articles for his immediate 
 
 confumption,
 
 ( 95 ) 
 
 confumption, as to continue his employment. 
 The merchant and manufacturer, alfo, mud dif- 
 pofe of their goods, in order to enable them to 
 live: and purfue their ordinary occupations: but 
 the farmer, in obtaining but half the ufual price 
 for his produce, can afford to give but half the 
 ufual rent to his landlord, and only half the ufual 
 wages to his labourers. The merchant, in felling 
 his commodities for half the ufual price, can af- 
 ford to give but half the price to the manufac- 
 turer. The manufacturer gives but half the price 
 to the farmer for raw materials, &c. and but half 
 the ordinary >vages to his workmen: but the land- 
 lord, on half the ufual value of his rent, would pro- 
 cure the fame quantity of confumable commodi- 
 ties, as formerly. The fame with the workmen: 
 merchants and manufacturers, for half the ordi- 
 nary fum, would purchafe the fame articles, as welt 
 for their trade, as for their own confumption. 
 Their profits would remain at the fame fum per 
 cent, as formerly, but their flocks would be 
 reprefented by half the fum; 10 per cent, or* 
 £"5000 would, in the one cafe, fecure to them the 
 fame proportion of the real revenue, as on 
 £ io,oco in the other. Thus, in place of the 
 man of landed property being worth /1000 per 
 annum, he would be worth only £"500. The 
 labourer, who formerly had received two (hillings 
 
 per
 
 ( 96 ) 
 
 per diem, would now receive but one; and the 
 ilock of the merchant or manufacturer, which had 
 formerly been reprefented by ^io,ooo, would 
 now be reprefented by ^5000; but as the foil 
 had remained equally fertile, and the workmen 
 retained their fkill, the real revenue of each would 
 ftill be precifely the fame. 
 
 As this part of our fubjeftis particularly inte- 
 refting, and as we fhall have occafion to offer 
 fome obfervations, which will require a pretty 
 long difculTion, we fhall divide the reft of this. 
 chapter into three parts. 
 
 PART I. 
 
 OF CIRCULATION. 
 
 We have feen, that the revenues of men in ci- 
 vilized fociety, are anticipated, and alfo, that the 
 productions of certain places are confumed at the 
 greateft dillances ; and as the diftribution of re- 
 venue, and the commerce of every country, is 
 performed by means of money: we are now to 
 point out the quantity which may be necelfary > 
 for thefe purpofes, under different circumstances. 
 
 The
 
 ( 97 ) 
 
 The more fimple the ftate of fociety, the better 
 fhall we be able to trace the money through the 
 different channels of circulation, and form a 
 judgement of the manner in which its value is 
 determined, and the quantity which may be ne- 
 ceffary, while the value remains ftationary. We 
 fhall fuppofe a fociety entirely confined within it- 
 felf, but in which the divifion of employments is 
 eftablifhed. The owners of flock muft neceffa- 
 rily be farmers and manufacturers; merchants and 
 mercantile flock would be unknown and unne- 
 ceffary. If w T e fuppofe that there are 52 people, 
 including farmers and manufacturers, and each 
 polfeffed of a quantity of confumable commodi- 
 ties, the value of ^500 (exclufive of the value of* 
 their fixed flock,) the quantity of confumable 
 commodities, in the fociety, will be of the value of 
 ^26,000. If it require juft one year before the 
 fame quantity of goods can be produced, the an- 
 nual revenue of fuch a fociety will be exactly 
 ^26,000. If wages of labour amount to one half 
 of the produce, and they be paid weekly, a fum 
 of £250 will be neceffary. But as labourers do 
 not always difpofe of the whole amount of their 
 wag«s, within the week, as they find it neceffary 
 to lay up a fmall fum, to provide themfelves with 
 cloaths, and for other expences, which muft un- 
 avoidably clog, in a fmall degree, the wheels 
 of circulation, a further fum will be neceffary. 
 H The
 
 ( 98 ) 
 
 The expenccs of the owners of flock are alfo 
 not perfectly regular ; but if we fuppofe a fum in 
 the fociety, of the value of their weekly confump- 
 tion alfo, the whole fum in circulation will be 
 £500. Whether more or lefs is of not the Ieaft 
 importance, as we take this fum only for conve- 
 nience. £500, then, will be fufhcient to diftri- 
 bute an annual revenue of £26,000. If, in this 
 ftate of things, a perfon were fuddenly to appear 
 with ^500; in order to employ it with the great- 
 eft advantage, he muft put it into circulation ; 
 but in purchafing materials from the farmer, he 
 muft come in competition with thofe who had for- 
 merly purchafed them, which muft raifc their 
 price. In hiring workmen, he muft come in 
 competition with their former employers, which 
 muft raife the rate of wages. In purchafing ar- 
 ticles for his own confumption, he muft alfo come 
 into competition with thofe who had formerly 
 confumed the whole of that kind of produce. 
 Thus, in whatever way he employed his/500, it 
 muft affect the nominal value of every fpecies of 
 goods. All the goods, however, which he had 
 procured, either directly for his own confumption,. 
 or indirectly, by giving to his workmen the com- 
 mand of a certain portion, muft have been at the 
 expence of thofe who had formerly confumed 
 them. The farmer would fell his productions for 
 twice the ufual price, but for the money which 
 
 be
 
 ( 99 ) 
 
 he had in his hands, he could procure but half 
 the ufual quantity. The manufacturers, alfo, 
 would fell their productions for double the ufual 
 price, but for the money which they had on 
 hands, they could procure but half the ufual 
 quantity. As well, however, with them, as with 
 the farmers, this could continue, only, till the ad- 
 ditional /500 had got completely into circulation. 
 When this had taken place, each owner of flock 
 would fell his goods for twice the ordinary fum, 
 he would alfo purchafe the articles of his own 
 confumption, at twice the old price. Wages of 
 labour, alfo, would be increafed in the fame pro- 
 portion, and workmen would pay the advanced 
 price in the purchafe of goods; but until this had 
 happened, the owners of flock, and workmen, 
 would lofe, in purchafing the articles of their 
 confumption, and exa&ly what he gained; as the 
 money was introduced, wages of labour, and the 
 fum reprefenting the profits of flock would rife, 
 but the nominal value of goods would always rife 
 before them, and the greater rife in the value of 
 goods, than of thefe two fpecies of revenue, would 
 be juft the lofs of the workmen and the owners 
 of flock. The rife in the nominal value of wages, 
 and the fum reprefenting profit, is the efFecl: of 
 the rife in the nominal value of goods, by the in- 
 troduction of money. The lofs of thefe orders 
 and the gain of the owner of the' additional 
 H 2 quantity
 
 ( ioo ) 
 
 quantity of money, would depend on the quick- 
 nefs or flownefs with which it was put into circu- 
 lation. If the whole of it was put into circula- 
 tion, within the term in which the quantity of 
 money, already in circulation, was turned; that is, 
 in a week, the nominal value of the goods for the 
 confum-ption of that period, which had formerly 
 been reprefented by ^500, would, in confequence 
 of the additional quantity of money poured in, be 
 reprefented by /'iooo. In this cafe, however, 
 the owner of the extraordinary quantity, would 
 receive but one half of the goods j that is, what 
 had borne before the value of /250 only. The 
 workmen, in the mean time, would receive for 
 their ordinary wages, but one half the ufual quan- 
 tity of goods. The fame with the owners of flock, 
 fo that their lofs would be jufk equal to what he 
 had gained, ^250. The next week, however, 
 the owners of ftock could, with equal eafe, give 
 double the common wages, and expend twice the 
 ordinary fum of money; as every fpecies of goods 
 would be raifed to twice the common price. If 
 the money was introduced more flowly into cir- 
 culation, the owner of it would derive ftill greater 
 advantages* and confequently the other orders 
 mull fuffer more. If he introduced but one half 
 the firfl week, or within the time in which the mo- 
 ney, already in circulation, made one complete cir- 
 cumvolution, he would obtain, in the firtt inftance, 
 
 one
 
 ( 101 ) 
 
 •ne third of the goods at market; if, within the 
 fecond period, he introduced the remainder, he 
 would obtain a fourth of all the goods at market, 
 making together feven twelfths of £500, in place 
 of fix twelfths, or £250. If put into circulation 
 ftill more (lowly, he muft gain (till more; but un- 
 der every fuppofition, the future effects muft be 
 the fame, the rife of every fpecies of revenue and 
 of goods, in proportion to the quantity of money 
 added to that in circulation. Thus the effect of 
 the introduction of £500, under thefe circum- 
 itances, would be to raife the value of the flock 
 circulating, or the confumable commodities fuf- 
 ficient for the ufe of the fociety, till thofe were 
 produced, on which labour was employed, from 
 £26^00 to ^"52,000, and the annual revenue alfo, 
 in the fome proportion. If, in fuch a fociety, 
 there was a neceffity for an accumulation of com- 
 modities for two years ; or if, on an average, it 
 required that length of time, before they could 
 be produced; the quantity of money neceffary 
 for the circulation, while it retained a certain 
 value, would ftill remain the fame. The quan- 
 tity of money, therefore, neceffary for the circu- 
 lation of a country, while the value remains fta- 
 tionary, will depend on the quicknefs or flownefs 
 with which it paffes, in diftributing the revenues 
 of each individual, and not on either the amount 
 
 quantity of flock. 
 H 3 Bui
 
 ( 102 ) 
 
 But when commerce becomes more extended, 
 when in every inftance, two, three, or more people 
 are interpofed between the producer and the con- 
 fumer, the circulation becomes apparently more 
 complex. The principles, however, which regu- 
 late the quantity of money, confiftently with a 
 certain value, remain the fame. When the in- 
 duflry of particular towns or countries becomes 
 employed in the production of but a few fpecies 
 of commodities, merchants and mercantile flock 
 are neceffary. Thefe are the connecting medium 
 between different countries. In place of feeing 
 the farmer goto the woollen manufacturer to pur- 
 chafe his cloths, or to the linen weaver to purchafe 
 his linen, he goes to the merchant. The money 
 which the merchant receives, paffes to the manu- 
 facturers in diflant parts of the country, and thus 
 the circulation is carried on in a more extenfive 
 channel. When, alfo, lands are appropriated, 
 and the owner receives his rent, in half yearly 
 payments, the quantity of money, neceffary for 
 circulation, becomes greater. To this we are to 
 add an additional fum, neceffary in thofe coun- 
 tries that are heavily taxed, in which, according 
 to the amount of the taxes, the money muft be 
 more or lefs interrupted in its channels. In every 
 cafe, however, there is but a certain office to be 
 performed by money, and if, while the quantity is 
 fufficient for the performance of this office, it be 
 
 increafed
 
 ( 103 ) 
 
 increafed, the value of the whole mull fall, or 
 the value of goods and of revenue mull rife, in 
 the proportion which the fuperabundant quantity- 
 bears to that quantity already in circulation. If 
 employed inpurchafing articles for immediate con- 
 fumption, it mud come into competition with the 
 money carried to market by the different orders, 
 and which muft always be fufficient to command 
 the whole of the goods at that time at market; or, 
 in other words, thefe goods are the revenues of 
 the different orders, and are diftributed to them 
 by money. If this be increafed, it muft raife the 
 value of each portion of goods, and each perfon 
 muft receive lefs than ordinary. If employed in 
 purchafing goods for fale, it mud come into com- 
 petition with the money which had formerly ena- 
 bled the merchants to procure the whole. In this 
 cafe, alio, it muft affect the nominal value of 
 goods, in proportion to its quantity. In what- 
 ever way it is put into circulation, while the quan- 
 tity of productions remains the fame, and while the 
 money already in circulation paffes through the 
 hands of the different orders, with the fame de- 
 gree of velocity; it muft affect the nominal value 
 of every fpecies of goods and of revenue. When 
 money is introduced in this way into circulation, 
 it affe&s firft the nominal value of goods, after- 
 wards of revenue; after the whole quantity has got 
 completely into circulation, the nominal value of 
 H 4 both,
 
 f 104 ) 
 
 both, (as we have already obferved,) is raifed in 
 the fame proportion. If goods be doubled in 
 value, revenue alfo will be doubled: but while 
 the quantity of money in circulation, is increaf- 
 ing, every order of men fuffer in their revenues. 
 It is in fact, a tax, and will be more or lefs heavy, 
 as the quantity is more or lefs great, and as it is 
 put more or lefs flowly into circulation. 
 
 The increafe of money in a Itate, is by no 
 means of the importance that is generally fup- 
 pofed. If one nation advances fader than ano- 
 ther in wealth and population, it will necefiarily 
 acquire more money ; but the acquifition of mo- 
 ney is owing to the acquifition of real wealth, the 
 increafe of the flock and population, and a pro- 
 portional increafe of the revenue. Were it pof- 
 fible to prevent money from flowing in, that na- 
 tion would advance flill fatter in wealth and po- 
 pulation. But while commerce exifls between 
 nations, to prevent the importation or exporta- 
 tion of money, when individuals find an advan- 
 tage in carrying it out of one country, or into an- 
 other, mull be altogether impoffible. It is right, 
 however, to give to each thing no more than jt.s 
 precife value. 
 
 Since the difcoyery of America, we have feen 
 the value of gold and filver gradually falling; we 
 have feen, alio, the revenue of the fovereign, which 
 was derived from the mines, gradually become 
 
 lefs,
 
 ( '05 ) 
 
 lefs. In the prefent day it is but trifling. The 
 profits of Hock, employed in working the mineSj 
 are alio not greater than the profits in other em* 
 ployments. If the advantages and difadvantages 
 of employing (lock in the working, or fearching 
 of gold mines, be confidered, it is generally fup- 
 pofed, that they are below the level of thofe in 
 other employments. A man, it is faid, who em- 
 ploys his flock in the fearch after a mine, is con- 
 fidered as almofl irrecoverably loft; like one who 
 would employ his flock in the pur^hafe of lottery 
 tickets, he may gain the prize, but the chances 
 are againft him. 
 
 For fome time after the difcovery of the Ame- 
 rican mines, their produce was fo abundant, as 
 to allow not only a considerable profit to the work- 
 er on his flock, but a very confiderable revenue to 
 the fovereign: but whatever we may fuppofe the 
 fertility of thefe mines, if the quantity of the me- 
 tals drawn from them, exceed the confumption, 
 the revenues arifing from them mud gradually 
 fall, until, at length, the whole of the produce be 
 no more than fufhcient to repay the owner of the 
 flock, employed in working them, his expences 
 together with his profits. The quantity which the 
 fovereign receives, is added to the money already 
 in circulation, as well as that which remains in. 
 the hands of the undertaker of the work. The 
 value of each particular portion mult, confe- 
 ss cruently^
 
 ( io6 ) 
 
 quently, fall, as the quantity increafes. No arti- 
 fice, no tax can keep up its value. The revenues 
 arifir.g from thefe mines, have been, by a late ce- 
 lebrated writer, compared very unphilofophically, 
 with the revenues arifing from other mines. A 
 tax on tin, or coal, or copper, may raife their 
 value. If it amount to 25 per cent, what in one 
 cafe would fell for £i 00, would in another fell 
 for ^125; but this is not the cafe with gold or 
 filver. If it mould amount to 25 per cent, on 
 thefe, it could .not raife their value in the fmalleft 
 degree. The value of gold and filver is not de- 
 termined as other things are, by the labour and 
 ftock neceffary to procure them, together with 
 the tax charged on them, but, whatever be the 
 flock and labour neceffary to procure a certain 
 quantity, by the value of that already in circula- 
 tion. If mines were difcovered of a much greater 
 degree of fertility, than thofe at prefent known, 
 the value of the gold and filver obtained from 
 them, would not be determined by the quantity 
 of labour and ftock neceffary to procure them, 
 but by the value of gold and filver already in cir- 
 culation. If, on the other hand, the mines at 
 prefent were to become lefs productive, or, if 
 rhe quantity of ftock and labour, in order to pro- 
 cure a certain quantity of thefe metals, muft be 
 increafed, their value would not be determined 
 by the additional expences and labour, but, as 
 
 before
 
 ( 107 ) 
 
 before by the value of thofe already in circulation. 
 In this cafe, the miner muft give over his employ- 
 ment, until the metals in circulation were raifed 
 in their value, by a diminution of their quantity, 
 by wearing, loffes, Sec. or until the quantity ne- 
 ceffary for the circulation of the different coun- 
 tries became greater, in confequence of an in- 
 creafe in wealth and population, which by en- 
 larging the circle in which they pafs, muft raife 
 their value, unlefs the quantity be increafed ; and 
 thus, in the courfe of fome time, the employment 
 might be refumed with the ordinary advantages. 
 If gold and filver were withdrawn from circula- 
 tion, and their place fupplied by tin or copper, 
 the cafe would be rcverfed. The value of the 
 former might be raifed by a tax, while that of the 
 latter would be determined by the quantity in 
 circulation ; the fame mode of reafoning is ap- 
 plicable in both cafes. A diftin£t view of the 
 fubjeel; may be thus given. 
 
 I. The gold and filver in circulation, in pro- 
 portion to their quantity, regulate the nominal 
 value of revenue and of goods. 
 
 II. If a quantity be added to that in circula- 
 tion, it will lower the value of the whole, as the 
 revenue which they diftribute remains the fame. 
 
 III. The extraordinary profit of the worker 
 of the mine, will be the difference between the 
 quantity procured, and that neceffary to repay 
 
 his
 
 f 108 ) 
 
 his expences, together with his profits, Sec. The 
 tax may amount to this difference of quantity. 
 
 IV. But, as the whole is thrown into circula- 
 tion, as well the amount of the tax, as that fuffi- 
 cient to fecure the undertaker of the work in the 
 ordinary profits, &c. the value of the whole 
 muft fall, until the quantity drawn from the 
 mine be no more than fufficient to reward the 
 undertaker. When this takes place, in order 
 that the profits may not fall below thofe in other 
 employments, the annual production muft not ex- 
 ceed the annual confumption, together with the 
 additional quantity neceffary for the circulation 
 of improving countries. 
 
 Thus, we fee the inftability of that revenue 
 which depends on gold and filver mines. The 
 narrow policy of both Spain and Portugal con- 
 tributed, however, to reduce it ftill lower. Ac- 
 cording to the old ideas, concerning political 
 ceconomy, it was fuppofed that the countries 
 which contained moft gold and lilver, muft ne- 
 ecfiarily be the richeft. It feemed to be totally 
 unknown or forgotten, that money is only the 
 attendant on real riches, and that when thefe dif- 
 appear, the other follows; without attending to 
 this, every means were taken to prevent the 
 money, obtained in South America, from palling 
 into the other countries of Europe. 
 
 i»
 
 ( ">9 ) 
 
 ft mud be evident, that had it been poflible to. 
 have kept the whole of the gold and filver, in the 
 countries to which it was firft carried, the value 
 of the money in circulation muft have been much 
 fooner affe&ed, than had it been allowed to have 
 been carried wherever the intereft of individuals 
 prompted them. The high value of that in cir- 
 culation muft, however, always determine the 
 amount of the tax of the fovereign ; but the at- 
 tempt to keep it all within the country, muft have 
 direttly tended to reduce its value. For, al- 
 though the intereft which individuals found in 
 carrying it out in fpite of every precaution, pre- 
 vented the intention from being carried into ef- 
 fect; yet a part of the revenue which might be 
 obtained from the mines, muft ncverthelefs be 
 deftroyed, as the rifk muft always be equal to a 
 certain proportion of the quantity thus procure- 
 ed. If, for example, in Great Britain a pound 
 of gold reprefents a quantity of labour and flock 
 as 15, while a pound of gold reprefents in Spain, 
 in confequence of its greater quantity, a quanti- 
 ty of labour and ftock as 1 1 only ; if the export- 
 ation be allowed, a quantity will flow into Great 
 Britain, until the value is nearer on a level; as it 
 falls in value in Great Britain, it muft rife in Spain, 
 and juft in the proportion which the quantity 
 neceftary for the circulation of Spain, bears ti> 
 
 the
 
 ( no ) 
 
 the quantity neceffary for the circulation of 
 Great Britain. The tax on the mine, may be in- 
 creafed in proportion to the alteration of value. 
 But, if by penalties and punifhments, the free 
 exportation be prevented, the value of that in 
 Spain muit, at all times, be lower than that in 
 England, by what may be fuppofed the rifk. If 
 fuddenly new means of preventing the exporta- 
 tion be difcovered, they will for fome time flop 
 the exportation, until the quantity accumulated, 
 (unlefs in confequeuce of its reduced value, a 
 fmaller quantity be drawn from the mines) in 
 Spain, by lowering the value of that in circula- 
 tion, offers new temptations : like endeavouring 
 by a dam to flop the courfe of a flream, it will 
 at firfl have fome effect, but gradually accumu- 
 lating, it furmounts the obftacles as they are fuc- 
 ceffively oppofed to it, and can have no other ef- 
 fect, than to occafion a difference of level. 
 
 The policy of Portugal has not been quite fo 
 abfurd as that of Spain, as the exportation of the 
 metals was allowed on the payment of certain 
 duties. As the opportunities of fmuggling muft, 
 however, be more numerous than if the tax was 
 levied at the mine; the revenue lias always been 
 lower than it mould have been. It appeared to be 
 Httle underftood in either countries, that the ne- 
 ceffity of reducing the tax all the mines, was an- 
 ticipated
 
 ( >» ) 
 
 ticipated by the prohibitions and duties at home. 
 In both countries, alfo, the expence of maintain- 
 ing certain officers, to enforce the execution of 
 the laws relating to money, muft always have 
 been confiderable. 
 
 PART II. 
 
 Or THE MANNER IN WHICH THE QUANTITY OF 
 MONEY IN ONE SOCIEY AFFECTS THE QUANTI- 
 TY IN OTHERS. 
 
 We have elfewhere mentioned, that the interefl 
 which individuals may find in transporting goods 
 from one country to another, muft depend on 
 their nominal value. If, in two countries, the 
 quantity of the metals in circulation be equal, in 
 proportion to the offices which money has to per- 
 form, the commerce between fuch countries muft 
 neceflarily be confined to the exchange of thofe 
 articles, in the production of which each may 
 have an advantage, either from nature or art; 
 that is, to thofe commodities, which in conle* 
 quence of lefs labour and ftock being neceffary 
 to their production in one country than another, 
 bear a lefs nominal value. If we fuppofe, how- 
 ever.
 
 ( a* ) 
 
 ever, the quantity of the metals in one fuddenly 
 increafed, we fhall obferve a great alteration in 
 the courfe of the trade, all nominal values mult 
 be affected, many fpecies of goods, which had 
 fold in both countries for nearly the fame fum, 
 while the metals had remained of nearly the fame 
 value in each, or whofe nominal value was not 
 fufficiently low to allow of the expences of car- 
 riage, &c. muft be fo much affecied in value, as 
 to permit their importation with profit to certain 
 people. Although we were to conceive two 
 countries, whofe productions were precifely of 
 the fame kind, whofe lands were equally fertile, 
 and whofe workmen were equally fkilful; yet if, 
 in one, the nominal value of goods, in general, 
 be greater than the nominal value of goods in 
 the other, and thefe countries to become known 
 to each other, and a freedom of commerce efta- 
 blifhcd, a quantity of the goods of the one, muft 
 find a fale in the market of the other, and goods 
 muft be carried in, and money out, until the no- 
 minal value of goods became nearly on a level. 
 If a communication took place afterwards, it 
 muft be owing to the introduction of improve- 
 ments into both countries, but in the production 
 of different fpecies of goods. Thus individuals, 
 in each, would find an advantage in importing 
 certain fpecies of goods only. The quantity re- 
 gularly imported into the one, muft, however, al- 
 ways
 
 ( i'3 ) 
 
 ways be equal to the quantity exported, (if the 
 two countries are advancing equally faft in 
 riches) as, were this not the cafe, the balance 
 muft be paid in money, which being added to 
 that in circulation, muft raife the value of that 
 particular fpecies of goods, on which the connec- 
 tion was founded, as well as others, and thus give 
 encouragement to their being produced at home. 
 On the fuppofition we have dated, it may per- 
 haps be worth while, to remark the real effects 
 on each nation. According to the common fup- 
 pofition, it muft be in favour of that which re- 
 ceived the moft money. The firft thing we 
 fhould obferve would be, a quantity of goods 
 carried into the country which contained moft 
 money, which by coming into competition with 
 thofe at market, muft lower the value of the 
 whole. The quantity at firft carried in, would not 
 be fufficient to reduce the value of the whole at 
 market, as low as the goods in the other coun- 
 try ; becaufe the intereft of the perfon, who 
 would carry the goods from the one to the other, 
 muft be regulated by the difference of value. 
 The nominal value of goods in general muft, 
 however, be in fome degree affected: we fhould 
 obferve the labourer, on his common wages pur- 
 chafe a greater quantity of goods; the landlord 
 aifo, on his ordinary rent, mull procure a greater 
 quantity; merchants and manufacturers, alfo, 
 I would
 
 ( "4 ) 
 
 would be enabled to purchafe the articles of 
 their own confumption at a lower price; but 
 they muft be under the neceffity of felling the 
 articles of their trade, at a much lower alfo. But 
 the merchant, in felling his goods at a lower rate, 
 can afford to give a reduced price only. The 
 manufacturer, in felling his goods at a lower rate, 
 muft reduce the wages of his workmen. The 
 farmer, alfo, muft be under the neceffity of re- 
 ducing the price of his produce, which muft af- 
 fect the rent of the landord: on every new im- 
 portation of goods, the fame effects muft be pro- 
 duced, until at length, the great importation ceaf- 
 ed, in confequence of the nominal value of 
 goods in both countries being nearly on a level. 
 "When this had taken place, the rate of rent, of 
 wages, and of goods, would be at the loweft. But 
 while thefe changes were taking place, we fhould 
 fee the reduction of the value of goods, always 
 going before the reduction of the nominal amount 
 of each fpecies of revenue. Every order of the 
 ftate muft gain: each fpecies of revenue would 
 be reduced; but the value of goods would be re- 
 duced in a ftill greater proportion. The nomi- 
 nal value of goods and of revenue, would be re- 
 duced, in confequence of the diminution of the 
 money in circulation; the real revenue would be 
 raifed, in confequence of the increafe in the quan- 
 tity of goods. In the other country, effects of a 
 
 very
 
 ( "5 ) 
 
 very different nature would take place 5 the nrft 
 effect would be, the diminution of the quantity 
 of goods, while the revenue, as reprefented in 
 money, remained the fame: the nominal value of 
 goods muft therefore rife*. By the introduction 
 
 of 
 
 * In China, the value of money is higher than in Europe, and 
 the Chinefe appear to be no ftrangers to this important fact in 
 political ceconomy. " With refecl to commerce, the Chinefe 
 entertain an opinion quite oppofite to that of every nation in Eu- 
 rope. Commerce, according to them, is ufeful, only fo far as it 
 eafes them of their fuperiluities, and procures them neceflarie?; 
 on this account, they confider that, even, which they carry on 
 at Canton, as prejudicial to the interefls of the empire. They 
 take from us, fay they, our filks, teas, and porcelain : the price 
 of all thefe articles is railed through all the provinces, fuch a 
 trade, therefore, cannot be beneficial. The money brought us 
 by Europeans, and the high priced baubles which accompany it, 
 are mere fuperfluities to fuch a ftate as ours. We have no occa- 
 lion for more bullion than what may be necefiary to anfwer the 
 exigencies of government, and to fupply the relative wants of 
 individuals. 
 
 It was faid by Kouan-tfe, two thoufand years ago, that mo- 
 ney, introduced by commerce, dees not enrich a kingdom :'n any 
 other refpect, than as it is introduced by commerce. No com- 
 merce can be advantageous Ion?, but that whic. confifts in a mu- 
 tual exchange of things necefiary or ufeful. '' — This will i'uffi- 
 ciently {hew us, that this ingenious nation is well acquainted with 
 the true principles of the political fcience. We (hall, however, 
 give the reft of the paragraph, as it will be found to enforce many 
 of the principles, we have attempted :o eftablilh.— -** rhat t ade, 
 continues Kouan-tfe, (whether carried on by barter or morev) 
 which ha.s for it: object, the importing of articles that tend to 
 I z the
 
 ( "6 ) 
 
 of the money obtained in the other country, in- 
 to circulation, each fpecies of revenue would be 
 railed in its nominr.l amount; but the rife of the 
 price of the goods would always go before the rife 
 in revenue. The real revenue would confe- 
 quently be funk, in confequence of the diminu- 
 tion of the quantity of commodities; the nominal 
 revenue raifed, in confequence of the introduc- 
 tion of money. 
 
 But although, fuch fudden changes can never 
 take place; yet by taking a view of the ftate of 
 nations at different times, with refpe£t to the 
 quantity of money in circulation, we fhall be 
 convinced, that changes have actually taken 
 place, whofe effecls, although not very evident, 
 from the flownefs with which the money in cir- 
 
 the gratification of pride, luxury, or curiofity, always fuppofes 
 the exiftence of luxury: but luxury, which is an abundance of 
 fuperfluitks among certain claffis of people, fuppofes the want of 
 neceffaries among a great many others. The more horfes the 
 rich put to their carriages, the greater will be the number of 
 thofe who go on foot ; the larger and moie magnificent their 
 houfes are, fo much the more confined and wretched muft thofe 
 of the poor be; and the more their table is covered with a vari- 
 ety of dilhes, the more mull the number of thofe increafe who 
 are reduced to the necefllty of feeding upon plain rice. Men, 
 united by fociety in a large and populous kingdom, can employ 
 their induftry, talents, ceconomy, and wifdom, to no better pur- 
 pofe than to provide neceffaries for all, and to procure conveni- 
 ence to fome." 
 
 See the Abbe Grofier's Defcription of China, 
 culation
 
 ( ii7 ) 
 
 dilation was mbreafed, are not the lefs real. 
 Thole lands, on which perpetual leafes were 
 granted, whofe rents were referved in corn, yield 
 a much greater (iim to the proprietor, than thofe 
 whofe rents were fixed at a certain nominal fum. 
 The difference is by much too great to allow us 
 to fuppofe, that it might be occafioned by the 
 gradual increafe of rent (of which hereafter) or 
 by different quantities of labour and flock, being 
 neceffary at different times, to produce the fame 
 quantity of corn. We muff, therefore, fuppofe 
 it owing to the increafed quantity of the money 
 in circulation, and confequently the exportation 
 of a quantity of goods. If the nominal value of 
 commodities, in the other countries of Europ'e^ 
 had never been fo low, as to induce individuals 
 to carry them to Spain; or rather, if the mines 
 of South America had never been difcovered, 
 which occafioned the rife of the nominal value 
 of every fpecies of goods in Spain, the goods 
 which had been fent out to purchafe the gold 
 and filver, would have remained in the country, 
 and the revenue of each individual, in proportion 
 to his fhare, muft neceffarily have been greater. 
 The revenue, therefore, drawn from the mines, 
 was in fad a tax on the other nations of Europe; 
 while the quantity of the metals increafed, the 
 nominal value of goods and of revenue rofe, but 
 I 3 the
 
 ( 11» ) 
 
 the nominal value of goods always rofe before 
 that of revenue. The real revenue was reduced. 
 From what we have already laid, it will be 
 evident, that the quantity of money neceffary to 
 produce a very evident change, in the value of that 
 in circulation, cannot be very great. If we fup- 
 pofe the money neceffary for the circulation of a 
 country, to amount to one fourth part of the an- 
 nual income (whether more or lefs is of no con- 
 iequence to our fuppofition) and this fourth part 
 of 25 millions, it will require an addition of 25 
 millions only, to raife the revenue of fuch a coun- 
 try, from iCO to 200 millions. If mines were 
 discovered which yielded twice the quantity of 
 gold and filver, from the fame labour and flock 
 as thofe at prtfent known, it would require a 
 very confiderable time, before they could produce 
 their full effects; as all the nations of Europe, 
 America, China, &c. would be affected nearly 
 alike ; and as the quantity drawn from the mines, 
 could affct the value of that in circulation, only 
 by the proportion which it might bear to it. The 
 tax laid on the mines, might at fkftj be equal to 
 one half of the produce; but as in this particu- 
 lar country, the quantity of money approached to 
 50 millions, the fame increafe taking place in 
 others, the tax rauft be reduced, and when 50 
 millions were in circulation, the produce of the 
 mine could afford none. But as we have former-
 
 ( 1*9 ) 
 
 \y obfeved, it would not require goods of the va- 
 lue of 25 millions, to purchafe this additional 
 quantity; that is, goods which had borne a value 
 of £25,000,000, before the difcovery of fuch 
 mines. The firft million introduced into circu- 
 lation, would procure goods at nearly their former 
 value, but the fecond would purchafe lefs than 
 the firft, and the third than the fecond, and as 
 goods would be raifed to nearly double their va- 
 lue, when the 25th million was introduced, it 
 could purchafe very little more than one half the 
 quantity of goods that the firft did. From the 
 effects of the introduction of money into circula- 
 tion, on the real revenues of the ftate, we fhall 
 hereafter, have occafion to make fome import- 
 ant deductions. 
 
 PART III. 
 
 OF CIRCUMSTANCES WHICH MAY DETERMINE A 
 GREATER QUANTITY OF MONEY TO CERTAIN 
 SOCIETIES THAN TO OTHERS. 
 
 In the preceding parts of this chapter, we have 
 fhewn the manner, in which the quantity of mo- 
 ney in certain focieties, regulates the quantity in 
 I 4 others,
 
 ( 12 ° ) 
 
 Others, Which may be fuppofed nearly on a lev el 
 with it, in refpetl to natural or acquired advan- 
 tages. But where great differences in thefe take 
 place, \vc mall obferve great differences, alfo, in 
 the quantity of money in circulation. We have 
 alreadv fhewn, that the nominal value which any 
 commodity may bear, (confidently with the quan- 
 tity of money in circulation, which muff, always 
 be underiloodj in order to fecuretothe manufac- 
 turer his proper proportion of the revenue, or 
 his profits muft be determined by the quantity of 
 labour and ftock employed in its production, and 
 the manner of the diftribution of the revenue. 
 But in the production of certain commodities, it 
 generally happens that a fmaller quantity of la- 
 bour and flock is neceffary in one place than in 
 another. When this difference, which is always 
 reprefented by the difference in the price, or no- 
 minal value, is fo great, as to allow of the cx- 
 pences of carriage, Sec. from one country to an- 
 other, the intereft of individuals induces them to 
 carry them thither. It never happens, that in 
 every fpecies of production, one country can 
 have an advantage over another, almoft every 
 country fupplies ilfelf with the greater part of 
 its food, and the coarfcr manufactures; as, al- 
 though there may be a difference in price at two 
 places, it is feldom fo great as to allow the ex- 
 pellees of carriage. But when we take all the
 
 ( 1« ) 
 
 cumftance into view, which regulate the com- 
 merce between different nations, we flia.ll fee the 
 abfolute impoffibility, that one nation can have 
 fuch an advantage in the production of every 
 fpecies of commodities, that it mud be for the 
 intereft of individuals to carry goods out, and 
 none into fuch a country. Let us fupp nfe the 
 inhabitants of a certain country to have fudden- 
 ly acquired the art of producing a much greater 
 quantity of every fpecies of commodities, from a 
 certain quantity of labour and (lock, than thofe 
 in others; as the value of each 'article would ne- 
 ceffarily be lower than in other places, we mould 
 at firft, fee a quantity of every fpecies of goods 
 carried out, and none in; but as thefe goods malt 
 be paid for in money, the quantity added to that 
 already in circulation, mud raife the nominal va- 
 lue of every fpecies of goods ; their exportation 
 rauft be diminifhed, becaufe the intereft which 
 the merchant finds in purchafing, muft always 
 depend on the price at which he buys, and that at 
 which he fells. It can never be of the leaft im- 
 portance to him, whether a greater or lefs quan- 
 tity of labour be neceffary to produce them, pro- 
 vided he can purchafe at a low price. If, however, 
 in fpite of the rife of the nominal value of goods in. 
 general, there were fome which yet bore a lower 
 price than thofe in other countries,they would conti- 
 nue to be carried out, and their value replaced by 
 
 money.
 
 C »« ) 
 
 fnOney; but the ftill greater increafe of the quan- 
 tity of money in circulation, muft be attended by 
 a further rife in the nominal value of all goods. 
 Thus the nominal value of certain kinds of goods 
 muft be fo much raifed, as to induce people to 
 carry goods of the fame kind thither from other 
 countries, in which their nominal value was 
 lower, in confequence of there being a fmaller 
 quantity of money in circulation, notwithstanding 
 the difference of the quantity of labour and flock 
 required to their production. The influx of 
 fuch goods muft lower the profits of thofe em- 
 ployed in producing thofe of the fame kind, 
 which would compel them to turn their ftock and 
 labour into fome other channel, and notwithstand- 
 ing the great fuperiority of (kill and other advan- 
 tages, the manufacture muft be totally loft, and 
 thus, in the courfe of fome time, the quantity of the 
 importation of goods would be juft equal to the 
 quantity exported, and the increafe of the money 
 in circulation, regulated by the fame circumftances 
 which regulate its increafe in other focieties. 
 This furnifhes us with another demonftrative 
 proof, of the abfurdity of that fyftem founded on 
 the ideas entertained concerning the balance of 
 trade. We have already, in our chapter on the 
 nature and manner of accumulation, fhewn the 
 abfurdity of fuppofing the riches of a nation to 
 confift in money, and here we have fhewn the 
 i limits
 
 ( i2 3 ) 
 
 limits to its increafe, fuppofing a certain fociety- 
 to enjoy above others, every advantage of ar( 
 and of nature. 
 
 In fuch a nation, however, although the nomi- 
 nal value of goods might be on the whole, on a 
 level with thofe in other countries, notwith (land- 
 ing the difference in the quantity of labour and 
 Hock necefiary to produce each article; yet thfi 
 real revenue of fuch a country muft much ex- 
 ceed that of others. Wages of labour, profits of 
 ftock, and rent of land, muft be higher than in 
 other countries*. In the increafe of the money 
 in circulation, in countries on a level with refpetl 
 to particular advantages, we have oblerved, that 
 the merchants, manufacturers, &c. are fecured 
 in their proper profits by the rife of the nominal 
 value of their flocks, while the number of 
 pounds per cent, remain the fame; but in focieties 
 which enjoy confiderable advantages over others, 
 the fum per cent, is greater. Thus the natural 
 rate of profit in one nation may be 10 per cent. 
 while in another it may be as high as 12, or as 
 low as 8 per cent. We mull not be underflood, 
 
 * An error into which all our writers on political ceconomy 
 have fallen, and which is the fource of many others, has been to 
 fuppofe high wages or high profits, in general, the caufes of the 
 high price of commodities, in place of confidering them as the 
 effects of it. 
 
 to
 
 ( «4 ) 
 
 to mean, that high or low profits mark the real 
 ftate of the revenue of a country, for we fhall 
 have occafion hereafter to obferve, that in fomc 
 inftanccs, while the real revenue rifes, profit finks ; 
 but, that in focicties in other refpecls equal; that 
 is, according to the actual ftate of their riches, the 
 manner in which the revenue is confumed, 
 whether with or without a view to reproduction, 
 the revenue of one may be greater than that of 
 another, and when this happens, the natural rate 
 of profit muft be higher. This natural rate of 
 profit we fhall have occaiion to fhew hereafter, 
 to be more dependent on the produce of the land 
 than the fkill of the manufacturer. 
 
 CHAP.
 
 ( 12 5 ) 
 
 CHAP. XIV. 
 
 Credit. 
 
 IN the mercantile world, we obferve a very 
 extenfive commerce carried on without the affift- 
 ance of money, by means of credit: we perceive 
 the merchant, by receiving credit, enabled to 
 carry on a more extenfive trade, than if he were 
 obliged to pay immediately for the goods in which 
 he deals ; the manufaclurer,however, who gives it, 
 muftbe in a certain degree pre vented from employ- 
 ing fo many workmen, as if he were paid imme- 
 diately. It might, therefore, at firft fight appear, 
 that it would be of advantage to fociety in gene- 
 ral, and particularly to the lower orders, who are 
 fo immediately dependent on manufacturing flock, 
 if credit were not allowed. But in looking to 
 the true nature of commerce, or the exchange of 
 commodities carried on between different coun- 
 tries, or different parts of the fame country, and 
 of mercantile flock, on which commerce between 
 diftant places depends, we fhall difcover fuch a 
 conclufion fallacious. The neceffity of a certain 
 portion of mercantile flock, we have already 
 fhewn, and the proportion which it muff bear to 
 the manufacturing in the different ftates of the 
 
 focietv,
 
 f i"6 ) 
 
 fociety, confidently with the intereft of each or- 
 der. But if the merchant were obliged to pay 
 the manufacturer for his goods, at the moment he 
 received them, the quantity of mercantile flock, 
 would be altogether inefficient for the bufinefs 
 of the fociety. While credit is allowed, accord- 
 ing to the length of time, a greater or fmaller 
 ftock is fufficient to carry on a certain bulinefs. 
 A man with a ftock of ^5000, with a certain 
 credit, may be enabled to carry on as extenfive 
 a trade, as a man with a ftock of^ooo or 8coo 
 who receives none. 
 
 For example, if we fuppofe two towns, one of 
 which furnifhes the other with the woollen cloths 
 of its confumption, which the other pays for in 
 linens*, if to the merchants in each town, who 
 dealt in thofe articles, credit had been given, and 
 this credit fuddenly withdrawn, we fhould fee the 
 woollen manufacturer enabled to produce a 
 greater quantity of woollen cloths, and the linen 
 weaver a greater quantity of linens; but a great 
 part muft remain unfold, as the merchant's ftock 
 muft be inefficient, to enable him to fupply the 
 market, even with the quantity of its ordinary 
 confumption, his profits muft therefore be raifed, 
 
 * Every place muft ultimately pay for the commodities, 
 which it receives from other?, by its own productions; for though, 
 jn this inftance, woollen cloths be paid for in money, yet linens 
 muft be fold, in order to obtain the means of purchafing. 
 
 while
 
 ( i27 ) 
 
 while thofe of the manufacturer's were funk, which 
 would induce the owners of manufacturing {lock, 
 to turn it into mercantile, and thus the proper 
 proportion would take place, in each employ- 
 ment. The quantity of flock withdrawn from 
 manufacturing, to be employed as mercantile, 
 would be the difference between the quantity of 
 ftock, which was neceffary in a certain manufac- 
 turing employment, while credit was allowed, 
 and that, which would be found neceffary after 
 credit had been abolifhed. The fame quantity 
 of goods would be annually produced, the fame 
 number of workmen employed; the only differ- 
 ence would be, that we mould fay the mercan- 
 tile flock bore a greater proportion to the manu- 
 facturing, in the one cafe than the other. But 
 even this affertion, though true in words, would 
 be falfe in facl, becaufe, in common language, 
 we call that manufacturing flock, which is pof- 
 feffed by the manufacturer, and that mercantile, 
 poffeffed by the merchant : but while credit is 
 given, part of the flock of the manufacturer is, 
 in fact, employed as mercantile, which part of 
 this flock, after the abolition of credit, would be 
 turned into mercantile, only by being poifeffed 
 by a merchant, in place of its being employed 
 by one. The nature of things would remain the 
 precifely the fame. 
 
 In
 
 ( «M8 ) 
 
 In mod employments, there is a certain credit 
 cflablifhed, beyond which it cannot be carried, 
 without injuring the manufacturer. When a 
 perfon extends his credit beyond the ordinary 
 time, he is faid to have traded beyond his flock. 
 This, people of fmall flocks, and of adventurous 
 difpofitions, are often guilty of. It is always 
 hurtful, as then the quantity of mercantile bears 
 too great a proportion to the manufacturing 
 flock. 
 
 This is' the moft fimple form in which credit 
 appears: it is fome times more complex. The 
 manufacturer may give credit to a merchant, who 
 gives credit on the lame goods to a fecond, and 
 the fecond again to a third ; or the manufacturer 
 may be paid for his goods by a merchant, who 
 neverthelefs may give credit on them to another 
 perfon. All thefe, however, are to be refolved 
 into the general principle, that the flocks in the 
 different employments, (hall bear a certain pro- 
 portion to each other, by which the bufinefs 
 of the fociety may be carried on with the grcateft 
 poflible advantage to all. 
 
 Thus, by credit, many very important advan- 
 tages are obtained, if it were not allowed, the 
 moment the flock in any employment became 
 greater, than what could be employed with ad- 
 vantage, it would compel the owner to feek fome 
 other employment; but by credit the balance is 
 
 moll
 
 ( i2 9 ) 
 
 mod nicely preferved. If manufacturing {lock 
 increafe in a greater proportion than the mercan- 
 tile, by a long credit, the proper proportion may 
 be preferved. If mercantile flock increafe fader 
 than manufacturing, a fhorter credit reflores the 
 balance. To preferve the proper proportions of 
 flock in each employment, without credit, would 
 be perhaps impoflible, when we confider the man- 
 ner in which individuals make choice of profef- 
 fions. It is impoflible for any one to fay, what 
 profeffion will be molt advantageous, at a period 
 not very diftant, but the mere probability of this, 
 and fometimes even a whim founded on no pro- 
 bability, muft determine every one. If the fup- 
 pofition be well founded, it often happens, that 
 what may be a very profitable profeffion one 
 year, may be the reverfe the next, in confequence 
 of people turning too great a quantity of flock 
 into it. Credit^ in a great meafure, provides a 
 remedy for this evil, as by giving it, each indivi- 
 dual may remain, and employ his flock, not cer- 
 tainly with fo much advantage, as if he had em- 
 ployed it otherwife, but the difference may not 
 be fo great, as to induce him to change his em- 
 ployment, which muft always be attended by very 
 confiderable inconveniences. It happens, alfo, 
 that while the increafe of flock in manufacturing 
 employments, induces the manufacturers to give 
 credit, it becomes the intereft of the merchants to 
 K take
 
 ( 4 3<5 ) 
 take it, and pay an advanced price on the goods, 
 which is always in fome degree regulated by the 
 length of credit. 
 
 Credit, therefore, in the firft place, ferves, in 
 fome meafure, to reftore the balance between the 
 parts of flock in the feveral employments. Its 
 importance, however, in another point of view* 
 is ftill more confiderable: it enables both the in- 
 ternal and external bufinefs of the fociety, to be 
 carried on by a much fmaller quantity of money. 
 Where it takes place, a very extenfive commerce 
 may be carried on between two places, without 
 the neceflity of any, or at moft, of a very fmall 
 fum of money pafling from one to the other* 
 For example, A is a manufacturer of cottons at 
 Manchefter, B is a merchant at the fame place, 
 C is a manufacturer of cloth at York, and D is a 
 merchant there. If no credit were allowed, D 
 would be obliged to carry money to Manchefter 
 for cottons, and B to carry money to York for 
 cloths; but when credit is allowed, at the expir- 
 ation of the time agreed on, A draws a bill on 
 D, for which he receives money from B, who is 
 indebted to C for cloths, D pays the amount of 
 the bills to C, and thus, each perfon receives the 
 value of his goods, without the neceflity of mo- 
 ney pafling from one place to the other, except 
 there be a balance, and even in this cafe, it is 
 
 often
 
 f 131 ) 
 
 often avoided by tranfaftions a little more com- 
 plex, but whofe prii.ciples are the fame. 
 
 The quantity of money which, without credit, 
 would be neceffary, h flill more evident, in tak- 
 ing into view the commerce carried on beiween 
 diftant countries. The quaiimv fived by credit, 
 in a particular country, may not atfirft light ap- 
 pear great, as it is with fo much eafe carr "d 
 from one extremity to the other; but acrols the 
 fea, goods are as eahly and as expeditiously con- 
 veyed as money; were we therefore to conceive 
 Manchefler and York fe^arated by a fea, fome 
 thoufands of miles acrofs, and an extenfue com- 
 merce eftabliihed between them, if the m-uiufac- 
 turers of each pUce rufufed to part with their 
 goods until they received their va^jejthemerchants 
 could carry on little more than half the quantity 
 of buiinefs, with the (locks. which they employed 
 while credit was allowed. A q laatitv of (lock, 
 muft therefore be withdrawn ft rra other employ- 
 ments, in order that the proportions, between tie 
 parts of flock in the lc\eral employments, fho ; i 
 be preferved The money which might be, on 
 an average on the fea, muft be confidered as t - 
 tally withdrawn from the circulation of b<^h 
 places, and the (lock withdrawn from the other 
 employments, would be neaily equal to it: we 
 fay nearly, becaufe the quantity of ft :k, on the 
 whole., mull be dnninifhed, and confequently there 
 K z would
 
 ( 132 ) 
 
 would no longer be a nccefiity for the fame quan- 
 tity of ftock in this employment. By enlarging 
 the circle of circulation, the value of money is 
 raifed, and goods are neccffarily fent abroad for 
 the purchafe of the additional quantity. It is 
 not, however, with a view to the public intereft, 
 that credit is either given or taken. Manufac- 
 turers and merchants have an immediate intereft, 
 in preventing money from lying unemployed, or 
 being turned into unnecelTary channels. It mould 
 rather indeed be faid, that the public is benefited 
 through them. 
 
 But notwithftanding that the bufinefs of a com- 
 mercial fociety may be carried on with lefs mo- 
 ney, when credit is allowed, yet the quantity of 
 money necefiary for circulation, always becomes 
 greater, as the commerce of a country becomes 
 more extenfive*. When a fociety provides it- 
 felf with all the articles of its confumption, there 
 is no neceffity for merchants or mercantile ftock ; 
 in this cafe, the money in circulation paffes from 
 the hands of one member to the other without 
 any confiderable interruption, and fometimes 
 barter makes it unneceffary: but when, as in the 
 
 • It might however be fliewn, that the advantages arifing 
 from this extended commerce, are necefiarily, at the very leaft, 
 equivalent to the difadvantages, or additional expence, arifing 
 from the neceflity of increafing the quantity of money in circu- 
 lation. 
 
 more
 
 f 133 ) 
 
 more improved and rich countries, almofl the 
 whole of the productions paffes through the hands 
 of merchants, and as thefe productions are fent 
 in large quantities from one extremity of the 
 country to the other, in order that they may bet- 
 ter bear the expence of carriage, Sec. the money 
 in itspaffage is more affected; for in the inftance 
 we have juft given, although there may be no 
 neceffity of money being fent from York to Man- 
 chester, or from Manchefter to York ; yet, as 
 there is a large quantity of goods to be paid for 
 at a certain time, the merchant muft prepare for 
 it, by laying up a quantity of money, for which 
 there would be no occafion, if each place furnifh- 
 ed itfelf with the articles of its own confumption. 
 The different operations of banking, the dif- 
 counting bills of exchange, Sec. provide how- 
 ever even for this, a remedy in many inftances 
 which we fhall mew more particularly at a future 
 period. 
 
 The effects of all regulations, which tend either 
 to increafe or leffen the quantity of the metals in 
 circulation, while they retain the fame value, or 
 in other words, which clog or facilitate the paf- 
 fage of fpecie, muft neceffarily be confined to 
 thofe countries in which they are adopted; for 
 though they in one cafe receive goods, and in the 
 other fend goods, in exchange for money, to 
 other countries, yet the real effects muft always 
 K 3 be
 
 ( >34 ) 
 
 be felt at the mines : the money either thrown into 
 or withdrawn from the circulation of other coun- 
 tries, in proportion to its quantity, niuft affect the 
 Value of the remainder, by which value the quan- 
 tity of flock and labour, employed in procuring 
 gnd and filver, mud always ultimately be regu- 
 lated- If the value be raifed, a greater quantity 
 of flock and labour are emp'oyed, if leflcned, 
 a part of that already employed, nr.ift be turned 
 to the production of commodities for coufump- 
 turn. 
 
 CHAP.
 
 ( 135 ) 
 
 CHAP. XV. 
 
 Revenue. 
 
 I 
 
 \ T the favage ftate, the immediate produce of 
 the labour of the individual, constitutes his fole 
 revenue. It mud be abundant or otherwife, >.5 
 nature is more or lefs kind in climate, and the 
 fpontaneous productions of the country. In this 
 ftate, although at all times equally vigilant, the 
 rewards of his exertion rauft be fubjefted to una- 
 voidable fluctuations. How widely different from 
 this ftate, is that of man in civilized fociety: the 
 produce of his labour may be fubmitted to calcu- 
 lation, and even in thofe countries leaft favoured 
 by nature, he enjoys conveniences, which man in 
 an unimproved ftate, though dwelling in the 
 fineft climate and moft fertile foil, is altogether a 
 ftranger to. Nature, in the cHftribution of her 
 favours, to the different countries of the earth, 
 has been by no means impartial ; in one, the la- 
 bour of the hufbandman is rewarded by abun- 
 dance, while in another, he with difficulty gleans 
 a fcanty fubfillence. Civilization in part re- 
 moves thefe differences, but it can never wholly 
 do them away. Labour, employed on rich land, 
 K 4 will
 
 ( 136 ) 
 
 will always be more productive, than when em- 
 ployed on poor. 
 
 The greater or lefs fertility of the foil, is there- 
 fore, the firft circumftance which determines the 
 revenue of the fociety. If one man be able to 
 procure food for another, he may exchange half 
 the produce of his labour for half that of the 
 other; but if, in another place, one man be 
 able to procure food for two more, and he ex- 
 change the food over and above that neceffary 
 for himfelf, for the produce of the other two^ 
 value for value, determined by the labour em- 
 ployed by each, while in the one place, a man parts 
 with half the produce of his labour for food, in 
 the other, he parts with one third only. The 
 conveniencies which each perfon enjoys, muft 
 therefore be very different at each place. 
 
 But as the lands of civilized nations are appro- 
 priated, it may be faid, that the argument will not 
 apply, and that the degree of the fertility can 
 only regulate the rent of the land, and can have 
 no fort of influence on the revenues arifing from 
 wages of labour, or profits of flock. If two tra£ls 
 of land, unequal in fertility, lie near each other, 
 the one will yield a much greater rent to the 
 landlord than the other: the farmer, who rents the 
 poor land, may find it as profitable as he who 
 rents the rich, for as the produce is not fo great 
 
 in
 
 ( 137 ) 
 
 in quantity, hemuft, in order to receive the ufual 
 profits, give the value of a fmaller quantity of it 
 to the landlord: thus it may be faid, that the land- 
 lord receives all the advantages arifing from the 
 richnefs of the land, and that it can be of no con- 
 fequence to the reft of fociety, whether it be rich, 
 or whether it be poor. 
 
 A conclufion of this kind, however, arifes from 
 a partial view. It is totally falfe, as a general 
 principle; for this marks, only, the rent which 
 one piece of land (hall bear when compared with 
 another, of a greater or lefs degree of fertility. 
 It leaves us totally in the dark, with refpect to the 
 rent which land in general may heir. When we 
 apply a thermometer to bodies of different tem- 
 peratures, we can inform ourfelves of the relative 
 degrees of heat, but we remain wholly ignorant 
 of the abfolute quantity of heat contained in 
 either. The manner in which the rent of land is 
 regulated, will be confidered in its proper place. 
 
 The fecond circumftance which determines the 
 revenue of the fociety, is the quantity of flock : 
 unlefs it be fuffkient to allow of the divifion of 
 labour to its greateft poffible extent*, the reve- 
 nue 
 
 * In the whole courfe of this work, we have confidered the 
 divifion of labour in no other view, than as it tends tp increafe 
 the quantity of the produce; in a moral view we have been to- 
 tally filent on it, and it .may indeed be doubted, if confining 
 
 commerce
 
 ( t 3 8 ) 
 
 rme or produce arifing from th« united labours 
 of the fociety, cannot he fo great as it might be. 
 The more fimple the employment of the indivi- 
 dual, the greater the produce rauft necefTarily be 
 on the whole ; but the more fimple the employ- 
 ments of each, the greater muft be the quantity 
 of ftock. Society, in its unimproved Rate, is 
 fupplied with the neceifaries and conveniences 
 of life, like a man who gleans fubfiftence from a 
 barren foil, he is informed that at a confiderable 
 diftance, every thing is produced in abundance, 
 both to gratify his necefiitics and defires, a defert 
 however intervenes, and before he can undertake 
 the journey, he muft collect provifions and 
 cloathing, fufficient to laft him till he arrives, 
 Thus we fee that, to accumulation, we are indebt- 
 ed for the numerous enjoyments we derive from 
 the cultivation of the arts, and alfo for the pow- 
 er of difplaying and exercifing thofe mental pow- 
 ers, which in the purfuit of fcience, fo eminently 
 
 commerce within narrow bounds, and confequently the divifion 
 of labour which arifes from it, would prove the belt mode of cor- 
 recting the moral depravity, fo generally complained of, amongft 
 the lower claffes of men in civilized fociety, to which it is fup- 
 pjfeJ, in a great meafure, to give birth. A fyllem of education 
 comprehending the feveral clafles, would certainly be more ef- 
 fectual, but to the fupport of which, a great revenue (which 
 raa only arik from freedom of commerce,) is abfolutely neceffary, 
 
 diftinguifh
 
 ( 139 ) 
 diftinguifh man from the reft of the animal crea~ 
 tion. 
 
 The third circumftance, regulating the revenue 
 of the fociety, is fkill in the arts ; with refpecl to 
 this, however, men are pretty much on a level, 
 under the fame circumftances. 
 
 From the produclions of the foil and labour of 
 the country, afTi'led by {lock, arifes every fpecies 
 of revenue, rent of land, wages cf labour, and 
 profits of (lock, direcllv, and the revenues of the 
 government which arife from thefe. 
 
 Every portion of the annual produce, is divided 
 amonglt the orders o*" which fociety is compofed. 
 Every increafe of the revenue of the one, mtift, 
 therefore, be attended bv 7 the diminution of" that 
 of another, while the quantity on the whole re- 
 mains ftationary. 
 
 The mark of a great revenue, is either the low 
 nominal value of goods in general, and ffo >d in 
 particular, as we (hall more particularly jfhew here- 
 after,) when compared with the nominal valie of 
 tl ■ fe commodities in other coiin tries, or while the 
 nominal value of goods in general, is on a level 
 With thole in other countries, a higher rate of rent 
 of wages, and of profits of ftock. 
 
 According as dilferent fpecies of revenue, rent 
 of land, wages of labour, or profits of ftock pre- 
 dominate, commodities (as we have already ob- 
 ferved,) will be paraaiiy affe&ed in their p. ice, 
 3 although
 
 ( MO ) 
 
 although commodities, taken in general, retain 
 the fame nominal value. 
 
 CHAP. XVI. 
 
 Of the Dijiribution of the Revenue. 
 
 X. ROM what has been already faid, the manner in 
 which the diftribution of the revenue takes place, 
 will be eafity underftood. The landlord is paid 
 his rent, and the farmer his profits, by the pro- 
 duce of the land, bearing a certain nominal va- 
 lue, by which they obtain a certain proportion 
 of the produce of the other orders in exchange. 
 The wages of the labourer, or the confumable 
 commodities which he can command, muft, alfo, 
 depend on the nominal amount of his wages. 
 The profits of merchants, farmers, and manufactur- 
 ers is the rrfidue, and confequently muft. be either 
 great or fmall, as a greater or fmaller proportion 
 is confumed by the other orders. 
 
 In a former chapter, we have obferved that the 
 rent of the landlord is anticipated by mercantile 
 ftock, although he does not receive it until fome 
 time after the farmer has had poffeflion of the land; 
 it is, however, dill more directly anticipated, as 
 
 much,
 
 ( 141 ) 
 
 much fo, as the revenues of the other orders. Ma- 
 nufacturers, merchants, and workmen, in difpoling 
 of themoney by which theirrevenues arereprefent- 
 ed, pay on the produce of the land, the advanced 
 price which reprefents the rent of the landlord. 
 At the moment, therefore, in which flock antici- 
 pates their revenues, it anticipates, alfo, the rent 
 of land. This is not immediately received by 
 the landlord, as it has been found more conve- 
 nient to pay it at certain Hated periods. Thefe 
 anticipated revenues are repaid to the owners of 
 ftock, by the produce of the whole of the labour 
 of the country. This enters into their hands, 
 in place of that which had been confumed. It 
 rauft, therefore, be evident, that their profits 
 muft be the difference between that which they 
 give, and that which they receive. Their pro- 
 portion of the annual produce muft always be 
 determined by the price of the produce of the 
 land, and the wages of labour. The nominal 
 value of all the commodities at market, muft de- 
 pend on the quantity of money which appears 
 for their purchafe. But if, while the quantity of 
 money in circulation remains ftationary, the 
 price of the produce of the land or wages of la- 
 bour be raifed, the ^price of goods in general 
 muft ftill remain the fame • it is altogether im- 
 pofllble, that a rife in their value can compenfate 
 for the rife of wages or produce : fome altera- 
 tions
 
 ( w ) 
 
 tions may trk^ place, (as we have before obferv- 
 ed) in the price of particular articles, but as the 
 quantity of commodities on the whole remains 
 the fame, and as the quantity of money, alfo, is 
 not increafed, the total value of all the goods at 
 market muff be reprefented by precifely the 
 fame nominal fum. 
 
 As in molt employments, the quantity of com- 
 modities produced, within a certain time, is lia- 
 ble to variations, it will be readily feen that the 
 profits of Mock muft be affv Bed. They are ac- 
 cordingly feldom for two years precifely the fame, 
 but muft always be affected, as well by thefe va- 
 riations in produce, as by the variations in the 
 price of wages. It may alfo with propriety be 
 faid, that the rent of land and wages of labour, al- 
 though reprefented by the fame nominal fum, are 
 at one time higher than another, in confequence 
 of an extraordinary production, which muft ftill 
 be reprefented by the fare quantity of money. 
 
 The confideration of the circumftances which 
 determine, at d>ffeient times, different propor- 
 tions of the revenue to each order, will divide 
 the remainder of this chapter into three parts. 
 
 PART
 
 ( 143 ) 
 
 PART I. 
 
 RENT OF LAND. 
 
 In the (ketch, which we now offer to the pub- 
 lick, it is not our intention to animadvert cither 
 on the manner, or juftice, of the original appro- 
 priation of land, or on the nature of the tenure 
 by which they are at prefent held, but to con- 
 fine ourfelves to pointing out the effecls of this 
 mode of appropriation on the feveral orders of 
 fociety at this day. 
 
 Without tracing particularly the feveral Heps 
 of fociety towards improvement and civilization, 
 we fhall be fufficiently enabled to difcover the 
 extent and nature of thefe effects, by fixing our 
 attention on that period of fociety immediately 
 preceding the granting of land on leafes, and 
 from thence tracing the progrefs of rent. 
 
 The view of the landlord, in giving his land 
 on leafe, is to make more of it than if he held it 
 in his own hands, that of the tenant in receiving 
 it, to employ his flock as profitably on it, as if he 
 were to engage it in fome other employment. 
 
 The increafed quantity of the produce, in con- 
 fequence of the improvements and flock of the 
 farmer, mufl be fufficient to fecure to him not 
 
 only
 
 C 144 ) 
 
 only the ordinary profits of flock, but to repay 
 him for the expences of the improvements he 
 may make during the term of his occupancy, on 
 which the landlord at the expiration of the leafe 
 demands an advance of rent. Unlefs the pro- 
 duce of the land bore a price, in the firft place, 
 fufficient to fecure to him the ordinary pro- 
 fits of (lock ; and in the fecond, to enable him 
 to pay the rent of his landlord, it is fufficiently 
 evident he rauft be a lofer. In order there- 
 fore to induce people to employ their flocks 
 on the land, the price of the produce mufl be 
 fufficient for both thefe purpofes. — What then, it 
 is of the utmofl importance to afk, are the cir- 
 cumftances by which the price of the produce is 
 regulated, which, in one country, is little more 
 than fufficient to fecure to the cultivator the pro- 
 fits of flock, while in another it is alfo fufficient 
 to allow a very confiderable rent to the landlord? 
 Is rent regulated by the price, or is the price re- 
 gulated by the rent? 
 
 The farmer in renting a certain quantity of 
 land, mufl judge of what he can afford to pay by 
 the quantity and price of the produce that may 
 be raifed from it. It would appear, therefore, 
 that the rent fettled on between the farmer and 
 landlord was a matter perfectly indifferent to the 
 reft of fociety: if the farmer give too much, he 
 only is injured by it, or if he give a lower rent 
 
 than
 
 ( M5 ) 
 
 than is commonly given, his profits are greater 
 than ordinary, and it is of no importance to 
 others. But this, however, apparently true with 
 refpecl to a particular farmer, is totally falfe 
 when applied to all. 
 
 At the expiration of the term for which the 
 leafe is granted, the landlord demands an ad- 
 vance of rent*. Although this advance be great- 
 er than the price of the produce enables the ten- 
 nant to give, yet, as removing, the time before 
 he can obtain another farm, and the want of em- 
 ployment for his flock, are equivalent to a cer- 
 tain expence, he will generally be inclined to 
 give it. Thus the rent of land is gradually en- 
 croaching, firft on the profits of the farmer, and 
 fecondly on the revenues of the other orders: 
 for as the produce of the land is of primary ne- 
 
 * Although there are fome landlords who do not rack-rent 
 their tenants, yet they are like the lingering few in the rear of a 
 flock, they (till follow; for their tenants, without being injured, 
 are enabled in a fhort time to advance their rents in confequence 
 of the rife of price occafioned by the rife of rents in general, or 
 the increafe in the quantity of produce by improvements, while 
 the price remains ftationary. In a difcufiion of this kind, we 
 muft give our attention to principles only, which, whether they 
 influence the conducl of the individual or not, are always under- 
 stood. Thus, when we fay, a certain farmer has obtained h's 
 leafe, on advantageous or difadvantageous terms, a certain efta- 
 blifned rate of rent is underftood by the very terms we make 
 nfe of. 
 
 L ceflkv^
 
 ( 14« ) 
 
 ceflity, the increafe always depending on that of 
 the flock employed, and as the profits of the 
 farmer always depend on the price, fo we fee the 
 neceffityof a rife in the price, in order to enable 
 the farmer to fupply the market as plentifully as 
 the demand requires; that is, to allow the in- 
 creafe of the flock on the land to keep pace with 
 the increafe of flock in other employments, and 
 of population. This rife of price, unlefs in fome 
 degree counteracted by the introduction of im- 
 provements in agriculture, the neceffities of the 
 people will always compel them to pay. 
 
 While the rife of rent tends to raife the price 
 of produce, thefe improvements tend to lower it; 
 it would appear, however, that thefe improve- 
 ments (for many have certainly been introduced) 
 have not had fo great an effeel in keeping down 
 the price, as the increafe of rent in raifing it. 
 It would, we acknowledge, be unfair to judge by 
 the prefent price of produce, as it is more than 
 ordinarily high, in confequence of circumftances 
 not regulated by general principles. We fancy, 
 however, few will affert that the price of the pro- 
 duce of the land is, in general, lower now than 
 formerly, or that improvements have not been in- 
 troduced. Why then, mould not the neceffaries 
 of life have fallen in price, in confequence of im- 
 provements, as manufacturers fall on the fame 
 account ? To this, we believe, no other anfwer 
 
 car*
 
 ( 147 ) 
 
 can be given, than that the gradual encroach- 
 ments -w T hich rent is conftantly making on the re- 
 venues of the induftrious members of the ftate, 
 more than counterbalance the effecls of all im- 
 provements. 
 
 As the cultivators of the land, in America, 
 have little or no rent to pay, it is often fuppofed 
 they fell their produce at a low price, becaufe 
 they can afford it; but this is abfurd, for the price 
 is low in America, not becaufe the farmers can 
 afford to fell it at that price, but becaufe they can 
 get no more for it ; and the price is high in Great 
 Britain, not becaufe the people think of the rent 
 which the farmer pays, but becaufe they can get 
 his produce at no other than a high price. 
 When the price of articles in other employments 
 is more than fufEcient to allow the ordinary pro- 
 fits of ftock, it provides of it itfelf a remedy for 
 the evil. Stock, in confequence of thefe high pro- 
 fits, is more rapidly accumulated, the market 
 more plentifully fupplied, and the price at length 
 no more than fufficient to allow the common pro- 
 fits : but the high price of the produce of the 
 land provides no fuch remedy, as the whole, 
 above that abfolutely necefTary to leave with the 
 farmer the ordinary profits, enters the pocket of 
 the landlord, and in place of returning to the 
 land, fo as to increafe the produce, is diffipated. 
 It is becaufe almoft the whole above that necefTa- 
 
 L 2 Tf
 
 ( 148 ) 
 
 ry to maintain the farmer returns to the land in 
 America, (we fay almoft the whole, for even in 
 America the lands in fome of the ftates, are not 
 fufficiently divided) that the price is low, and 
 becaufe the reverfe takes place in Britain, 
 that the price is high. Let for a moment be 
 conceived the date of Great Britain, if twelve 
 millions, the fuppofed amount of rent, were 
 annually returned to the land, fo as to increafe 
 its produce ; where would there be a demand 
 for fo immenfe a quantity ? and what would be 
 the effects? Let not exportation be fpoken of, 
 for thefe principles are as applicable to other 
 countries, as to Great Britain. — We muft be con- 
 vinced that a very conhderable fall in the price 
 would be the confequence, and that in a fhort 
 time, it would be no more than fufficient to allow 
 the farmers to fupply the ordinary demand of the 
 -market. Profits, as well in the farming as in 
 other employments, and wages, muft in confe- 
 quence of the reduced price be raifed; for the 
 price which the produce at prefent bears, equally 
 affects profit in all employments and wages. 
 
 When profits of flock and wages of labour are 
 higher in one country than in another, if the ad- 
 vantages of both are equal, it can arife from no 
 other circumftance, than that, in one the idle and 
 worthlefs confume a greater proportion of the an- 
 nual
 
 ( M9 ) 
 
 nual produce than in the other. In America, 
 both wages of labour and profits of flock are 
 higher than in Great Britain, yet America la- 
 bours under many di fad vantages, compared with 
 Great Britain, hef lands are not fo well cultivat- 
 ed, nor have thofe great divifions of labour taken 
 place, which the more abundant flock of Great 
 Britain allows, and by which her revenues are 
 Confiderably augmented. But in the former, the 
 induflrious enjoy almoft the whole of the produce 
 of their labours, while in the latter, they are op- 
 preffed by the law of entail and enormous annual 
 taxes. The {yftem from which the latter have 
 arifen, w 7 e fhall hereafter fhew to be in the highefl 
 degree unjuft and impolitic. 
 
 The evil effects of the law of entail, are, how- 
 ever, to be traced yet further; for, exclufive of 
 depriving the people of fo large a portion of their 
 revenues, by preventing every kind of expenfive 
 improvement, it prevents thofe revenues from be- 
 ing fo great as they otherwife would be. All im- 
 provements ceafe for fome years before the expira- 
 tion of the leafe, which is fcarcely ever long enough 
 to allow of expenfive ones with any advantage. 
 
 Superior fertility, improvement, or fituation, 
 
 are the only circumflances which ought, or, were 
 
 the lands divided, would give, to the owners of 
 
 certain portions, a greater {hare of the annual 
 
 L 3 produce
 
 ( IS© ) 
 
 produce than they were entitled to from their 
 labours. 
 
 We have already fhewn, that an increafe of 
 population can never go before an increafe in 
 the quantity of thofe goods which are diftributed 
 to the lower orders as wages. When wages are 
 high, it is a demonstrative proof that an increafe 
 of thefe commodities has taken place, and that 
 the labour and flock of the fociety had been em- 
 ployed in agriculture and the ufeful manufac- 
 tures, in place of providing articles of luxury for 
 the confumption of a few. There are but two 
 ways in which flock and labour can be employed, 
 either in providing the means of fubfiflence for 
 a rifing generation, or in adminiftering to the 
 vices of a few. This we have already noticed, 
 but we hope its importance will apologize fuffi- 
 eiently for the repetition. 
 
 Such a divifion of property*, as would natu- 
 rally 
 
 * The Chinefe at a very early period appear to have been well 
 aware of the beneficial effects of a divifion of the lands, as, 
 
 " Hoang-ti II[. Emperor of China, according to the Chinefe 
 accounts, meafured the country and divided it imo Tcheou; he 
 made feveral principalities of i oo Lys each, where he built towns ; 
 he ordered that 240 paces in length and one in length fhould make 
 a Mou; that i 00 Mou fhould make a King; fo that the pace be- 
 ing c feet, a Mou of land contained 6000 fquare feet, and 600,000 
 a King. He alfo orda'ned that King fhould be called Tfing, 
 
 that
 
 ( ts» ) 
 
 rally take place, by the abolition of all laws, 
 which tend to keep it in the hands of a few, can 
 alone compel every individual of the ftate to be 
 ufeful to it, and determine Hock and labour to 
 thofe employments, in which they muft neceffa- 
 rily be engaged, in order that the fociety mail 
 advance in population and wealth, and that the 
 clafs of people, by which all are provided, fhall 
 enjoy, at lead, a reafonable fhare of the produce 
 of their own labours. 
 
 PART II. 
 
 WAGES OF LABOUR 
 
 From what we have had occafion to fay, in the 
 preceding parts of this work, the variations which 
 take place in the ordinary rate of wages, Avill be 
 fufficiently underftood ; little remains therefore in 
 this place for us, but to give an abftraci of them. 
 
 Before the accumulation of flock, and the in- 
 troduction of the arts, the rewards of labour, as 
 
 that it mould be the portion of eight families, which fhould have 
 each a King or a ioo Mou, and the remaining in the middle, 
 mould belong to the Emperor, and be cultivated at the common 
 expence of the eight families." Du Halde. 
 
 L 4 we
 
 ( «S« ) 
 
 we have already obferved, muft depend on the 
 fpontaneous productions of the Toil, nor could 
 the number of inhabitants ever exceed what they 
 could maintain. But when, by the accumulation 
 of riches and their employment, the means of fub- 
 fiftence is increafed, we difcover the dependence 
 of the labourer on their owner. As, with the 
 affiftance of (lock, a much greater quantity of 
 goods may be produced, than^by labour merely 
 manual, thofe pofTefTed of it, had it always in their 
 power to procure labourers fufficient to put it in 
 motion. Workmen, for wages equal to what 
 they made of their ufual employment, or a very 
 little more, would engage themfelves to an em- 
 ployer. Wages of labour, therefore, would not 
 at firu be regulated by what the owner of flock 
 could afford to give, but by what thofe made who 
 were not employed by (lock. But as flock in- 
 creafed, and became fufficient to employ the 
 whole of the labour of the country, a new order 
 of things followed. Millions then became de- 
 pendent on that ftock, by which they were em- 
 ployed and fubfifted. It proved as it were a new 
 foil. The advances of mod of the nations of the 
 world, have been fo flow, that it is only by ab- 
 ftra&ing our ideas aliule, that we can be enabled 
 to judge exaftly of v/hat has taken place. We 
 mull annihilate time, (if we are allowed the ex- 
 l predion)
 
 ( 153 ) 
 
 prefiion) and bring the ftate of a nation at differ- 
 ent periods, at once under our view. 
 
 In the various degrees of the quantity and in- 
 creafe of this accumulation, we are, therefore, to 
 look for our Uandard of wages. After the ftock 
 of the country has become fufficient to give em- 
 ployment to the whole of the labourers, their 
 wages muft noceiTarily be determined by its in- 
 creafe. We have already fhewn, that in the ad- 
 vances o r a ftate in wealth, flock is not employed 
 where it accumulates ; that as the market for the 
 productions of a country, becomes more extend- 
 ed, a greater proportion of the national capital, is 
 employed by the merchant. The effects of this 
 on the revenues of a country, by allowing and 
 fupporting greater divifions of labour, we have 
 already fliewn. It occafions, however, wages of 
 labour to advance more flowly, but as it allows 
 the ftock of the country to be more rapidly accu- 
 mulated, and as ftock approaches to that ftate, 
 which admits of the greateft divifions of labour, 
 and confequently of the greateft poflible revenue, 
 wages of labour rife much higher, than if freedom 
 of commerce was not allowed. In every cafe, 
 an increafe of ftock is attended by the rife of 
 wages, and any thing which tends to prevent its 
 accumulation, (unlefs by confining commerce 
 within certain bounds, by which labourers enjoy 
 a temporary advantage,) muft keep down the rate 
 
 of
 
 ( J54 ) 
 
 of wages. Want of ceconomy in the owners of 
 itock, who are however fufficiently inclined to it, 
 unlefs overpowered by example, and other in- 
 ducements, is the firft circumftance which reduces 
 the rate of wages; the diffipation of a large por- 
 tion of the annual revenue, by the law of entail, 
 the fecond; the diffipation of a ilill larger portion, 
 (as we mail hereafter more particularly mew,) 
 by annual taxes, the third; and improper reflric- 
 tions on commerce, the fourth. Labourers fuffer 
 by thefe, in common with the other members of 
 the ftate. 
 
 As, in a thriving country, the principal expence 
 of the lower orders, is in food, fo its price will 
 have considerable effe£t on the rate of wages. 
 When the price of food is low, although the rate 
 of wages may be fomewhat lower on that account, 
 the real rewards of labour are more confiderable. 
 When the price of food is raifed, although at- 
 tended by a rife of wages, yet the rife of the lat- 
 ter, can never compenfate for the rife of the for- 
 mer; as, in confequence of the greater wages, the 
 owners of flock muft in fome degree be prevented 
 from accumulating. The rife in the price of 
 food, affecls both the wages of labour and the 
 profits of flock. 
 
 PART
 
 ( 155 ) 
 
 PART III. 
 
 PROFITS OF STOCK. 
 
 It will fuffice to give a- fhort abflracl of the va- 
 riations in thefe, alfo, as they mull be fufficiently 
 underftood, from what wc have faidin the courfe 
 of the work. Independently of the variations to 
 which the profits of Rock are liable, in common 
 with wages of labour, as the (late of the fertility 
 and divifion of the lands, and the ftate of the arts 
 with refpect to improvement, they are altered by 
 circumflances peculiar to themfelves. As the 
 accumulation of flock approaches to that ftate, 
 which admits of the greatefl poffible divifions of 
 labour, and confequently the greater! produBion; 
 and when an increafe of people mtfft attend every 
 further increafe of flock, the quantity of the an- 
 nual productions, diftributed as wages, by degrees, 
 bear a greater, and that diftributed as profits of 
 flock, a lefs proportion to the quantity produced 
 on the whole; confiflently, however, with another 
 circumftance, the degree of the ceconomy of the 
 owners of flock, when they confume the whole 
 of their profits, wages of labour can never be 
 greater, than to allow the race to be kept up, 
 whatever be the Mate of accumulation, or the 
 
 annual
 
 ( >56 ) 
 
 annual produce. In China, it would appear, 
 that the owners of flock confumed annually the 
 whole of the amount of their profits, as they are 
 there remarkably high,, and wages, it is faid, re- 
 markably law; the mtereft of money, which al- 
 ways marks the (late of profit, being according to 
 mod authors, as high as 30 per cent*. 
 
 * It may not, perhaps, be unneceftary to remark the miftake 
 into whieh Dr. Smith has fallen, with refpecl to the effect of a 
 great population on wages, and a great accumulation of riches, 
 on profits of flock. Although one fhould be accompanied by 
 the other, the competition, which would naturally arife, he is of 
 opinion, mult reduce the rate of both wages and profits. The 
 doctor feems not to have known, that competition never anni- 
 hilates, but on the contrary ferves, in two ways, to increafe rather 
 than to diminifh the annual produce, and confequently the differ- 
 ent fpecies of revenue ; firft, by laying every individual under the 
 neceffity of exerting hirafelf; fecondly, by preventing a greater 
 quantity of ftock, from being engaged in any employment, than 
 what at a certain time may be neceflary, and which, (as we 
 have elfewhere obferved,) is only relative to the quantity of the 
 whole. Competition, in reducing wages and profit, reduces, he 
 fuppofes, the price of goods, (in Conformity to his theory, on the 
 manner in which the nominal value of goods is regulated, which 
 we have endeavoured to fhew is unfounded) but the public he is, 
 of opinion, muft gain by this reduction. It would certainly be 
 not a little difficult to prove, that the public can gain, while the 
 individuals, compofmg the public, lofe. The doctor cannot be 
 fuppofed to mean, that it is of advantage to the public, to reduce 
 the quantity of goods produced within the fociety, in proportion 
 to the people amongft whom it is to be divided : and this alone 
 can he undcrftcod ; for if thefe goods are produced, they muft be 
 divided, and this divifion muft neceflarily be made by a certain 
 
 rate
 
 ( 157 ) 
 
 rate of wages, profit, rent, &c. In China, certainly the 
 richeft and moll populous country in the worlJ, the intereft 
 of money, (which marks the rate of profit,) is confiderabl/ 
 higher than in any part of Europe. The doctor, in account- 
 ing for this fact, fo directly contrary to his theory, is oblig- 
 ed to adopt a fuppofition, the truth of which is extremely 
 doubtful, and though true, altogether infumcient to account for 
 it. The high rate of intereft in China, and the low rate in Eu- 
 rope, we believe, may be very fatisfactorily explained, on the 
 principles we have endeavoured to eflablifli. In the former, the 
 great accumulation of flock, and a free internal trade, at leaft 
 equal to that of all Europe, allows and fupports thofe very great 
 divilions of labour and (lock, by which the annual productions, in 
 proportion to the numbers arnongft whom they are to be divided, 
 are confiderably increcfed. In the latter, a fyftem (of which it 
 would be unbecoming a philofophical enquiry, to fpeak in the 
 terms it deferves,) gives birth to commercial rcftriclions, by 
 teaching the people of one part, to ccnfider thofe of another, as 
 their natural enemies, and confequently prevents many divifions 
 from taking place, which their {lock (fcanty compared with that 
 of China,) would otherwife allow. The law of entail aifo takes 
 place, which throws a confiderable portion of the annual produce 
 into the hands of the idle, and a fyftem of taxation, which acts as 
 commercial redactions, in reduciug the annual produce, and as 
 the law of entail, in fupporting the idle with the produce of the 
 induftrious. 
 
 CHAP.
 
 ( 15* ) 
 
 CHAP. XVII. 
 
 Taxes. 
 
 A. 
 
 .GREEABLY to our general plan, we mall 
 treat of the more general effects only of taxes. 
 On this part of our fubjeel, we confine ourfelves 
 the more willingly, as we mail hereafter have oc- 
 cafion to place the nature of taxes in general, in 
 a point of view, which will make a particular dif- 
 cufTion of them unneceffary. 
 
 We mould define taxation, to be for the pur- 
 pofc of giving to fome members of the ftate, a 
 part of the annual produce of the labour and 
 ftoek, in the production of which they had not 
 aflilled. Concerning the effects of the taking from 
 one citizen to give to another, many ingenious 
 men have employed their pens. Thofe who were 
 of opinion that it was hurtful, were not able to 
 fliew the precife manner in which it acled. Ac- 
 cordingly, the other party appears to have been 
 moft numerous. The argument on which they 
 found their opinion, is, that as the annual produc- 
 tion is not diminifhed by taxes, and as their 
 amount is fpent within the country, they cannot 
 be injurious to it. In what view then are we to 
 conf:der this expreffion; " not injurious to the 
 
 country?"
 
 ( i59 ) 
 
 country?" Are we to fuppofe, that its advances 
 in wealth and population are not impeded by 
 taxes, or the exertions againft an external enemy 
 not enfeebled? Thefe appear to us, to compre- 
 hend the principal modes in which fuch an af- 
 fertion can be taken. When carefully examined, 
 however, both propofitions will be found unfup- 
 ported. 
 
 In the firft place, the power which the mer- 
 chant or manufacturer has of accumulating, mud 
 depend on his profit; any thing which reduces the 
 one mult affect the other. The power of the 
 workman to fupport a family, muft depend on 
 the rate of his wages, and the quantity of con- 
 fumable commodities which he can procure for 
 them. A tax, raifed on the commodities of the 
 ordinary confumption of the merchant, the ma- 
 nufacturer, or farmer, mult increafe his expences, 
 his ability to accumulate muft confequently be 
 impaired; but as the wages of labour muft depend 
 on the increafe of ftock, they muft be reduced. 
 Thus taxes, on the expences of the owners of 
 ftock, fall in part on the lower orders of people. 
 If taxes, on the other hand, be laid either direcl- 
 ly on the wages of labour, or on the commodi- 
 ties of the labourers 1 confumption,wages of labour 
 muft be raifed, and thus affect the profits of ftock. 
 Taxes, therefore, on the commodities confumed 
 by the owners of ftock, or the labouring part of 
 
 the
 
 ( >6o ) 
 
 the community, according as they are more or 
 Jefs heavy, dire£tly prevent the advance of a fo- 
 ciety in wealth and population. 
 
 But it may be faid, that taxes impofed on the 
 articles of the luxury of thefe orders, particu- 
 larly on thofe of the lower order, are rather fer- 
 viceable, by preventing the poor from difpofing 
 of fo much of their money, in the purchafe of 
 thefe articles, and thereby enabling them to fup- 
 ply their families more plentifully, with the arti- 
 cles of immediate necefiity. But we would afk, 
 what would take place if the poor were wholly to 
 difcontinue the ufe of fuch commodities? Taxes 
 mu(t ft ill be railed, and when found not produc- 
 tive in one way, mult be laid on in foine other; 
 and if they can be found productive on no other 
 commodities, than thofe absolutely neceifary to 
 life, they will be laid on them. Let us fuppofe, 
 for a moment, a nation in this ftate. The man 
 with the largeft family, and who is generally the 
 moft induftrious, rauft be the greatcft fufferer. 
 Marriage v mu(t, therefore, neccffarily be difcou- 
 raged: the fociety which men had, in one ftate, 
 fought for in their familes, would in the other, be 
 found in the porter houie ; and, as taxes were 
 found unproductive or ruinous, when impofed on 
 the neceffaries of life, they would in the courfe 
 of a fhort time, be laid on thofe articles, (malt 
 and fpirituous liquors, for example,) the demand 
 
 for
 
 ( i6i ) 
 
 for which had been increafed, probably on ac- 
 count of the neceflity of thefe taxes. To lay 
 taxes on thefe articles, and, at the fame time, to 
 accufe the people of being addicted to debauch- 
 ery, which is in facl done by their being held 
 forth as fo very productive, is (to ufe a very 
 vulgar expreffion,) to knock a man down and 
 kick him for falling. We mould not confider 
 taxes, as being of no dilfervice, becaufe laid on 
 fuch articles, but as ruinous, in being the foun- 
 tain head of debauchery. Were there no necef- 
 fity for thefe enormous taxes, was each man left 
 in poffeffion of the whole of the produce of his 
 labour, the manners of men would no longer be 
 the fame. It is remarked, that thofe who emi- 
 grate to America, and who are generally the dregs 
 of our ftreets, in a fhort time totally change their 
 manners ; after their landing, from the cheapnefs 
 of liquor, they wallow in drunkennefs and filth; 
 but want of companions, and the tacit reproach 
 of thofe of their own rank, in a different conduct, 
 work by degrees a change, and after they have for- 
 gotten the villainous tricks, nurfed by the vices 
 of Europe, become ufeful members of fociety. 
 
 But, although the debauchery of the lower or- 
 ders, be fuppofed to arife from fome other fource, 
 and though we were to fuppofe their confumption 
 of thefe articles, to be the fame, whether there 
 may or not be a neceflity for thefe taxes ; yet, in 
 M the
 
 ( i6« ) 
 
 the point of view, in which it more immediately 
 belongs to our fubject, to confider the effects of 
 taxes, they are ftill the fame; that is, they direct- 
 ly prevent the accumulation of (lock, and the ad- 
 vance of the fociety in population. Thofe who 
 firft peopled America, carried with them all the 
 ideas of Englifhmen, and purfued nearly the fame 
 mode of management, and yet, we obferve the 
 one nearly ftationary, and in the other, the popu- 
 lation doubled within the term of twenty years, 
 and their wealth much more than doubled within 
 the fame period. This great difference fome 
 have attempted to account for, by the vaft extent 
 of land*, of which the Americans have the com- 
 mand, but land uncultivated can produce nothing ; 
 and that which is under cultivation, produces 
 in proportion to its extent, and the labour be- 
 llowed on it, a much fmaller produce than the 
 lands of Great Britain. But in the former, the 
 
 * If we reflect a moment, this will appear altogether infufficien-t 
 to account for it. For on an average, perhaps not more than one 
 third of the whole continent of Europe is cultivated, and that 
 which is under cultivation, could be made to yield a much greater 
 quantity of produce. In Great Britain and France, two of the 
 raoft improved countries of Europe, there are yet immenfe 
 tracts of wafte land: in the former, according to a late account, 
 i 8 millions of acres; in the latter*, 40 millions, a great part of 
 which is abfolutely wafle, and the reft almoft ufelefs, from the 
 miferable manner of cultivation. 
 
 * See Young's Travel?. 
 
 induftrious
 
 ( i6 3 ) 
 
 induftrious enjoy the whole produce of their la- 
 bour; in the latter, 12 millions are annually dif- 
 fipated by the law of entail, and 20 by the annual 
 taxes. Let any one confider what would take . 
 place in Great Britain, if 32 millions were annu- 
 ally divided, fo that one part fhould go to the 
 labourer, and enable him to raife a more nume- 
 rous family, and the other to the augmentation of 
 the profits of flock, to enable the quantity to keep 
 pace with the population, and the ftock to go on 
 accumulating in the fame proportion, like com- 
 pound intereft on a certain furn, attended by a 
 proportional increafe of the population. 
 
 With refpe£t to the fecond effeel of taxes, on 
 the power of a ftate. This mud, on even a fu- 
 perficial view, appear abundantly plain. The 
 power of every nation muft depend on the num- 
 bers it can maintain in the field, and the other 
 expences attendant on war. But this power di- 
 rectly depends on what each individual can fpare 
 from his ordinary confumption; or, in other words, 
 what he can afford to pay as taxes. Every tax, 
 therefore, by leaving to each individual afmaller 
 portion of the produce of his induflry, muft direct- 
 ly weaken the power of every ftate. If the whole 
 amount of theEnglifh taxes were employed in car- 
 rying on the war, in place of part being appropri- 
 ated to the payment of the intereft of her debts, 
 can any one doubt of her being more powerful. 
 
 M 2 Another
 
 ( i6i ) 
 
 Another general effeft of taxes, is, not only 
 to diminifh the revenues of the individuals 
 of a ftate, but to prevent thefe revenues from 
 becoming fo great as they otherw ife would. This 
 mufl depend, chiefly, on the mode of levying 
 them. In no country of the world, perhaps, are 
 fuch enormous taxes raifed, as in Great Britain, 
 without injuring the fubje6t further than the 
 taxes themfelves; or in no country are they raifed 
 in fo unexceptionable a way. They muft always 
 be hurtful, and when carried to a certain length, 
 ruinous; but in many countries, the mode of le- 
 vying them, is perhaps much more ruinous than 
 their amount. The Alcavala of Spain, is obferved 
 by authors, amongft whom is thejudicious Dr. 
 Smith, to be of this kind. Common fenfe, and 
 our beft authors, agree in pointing out the almoft 
 perfect freedom of commerce, as the caufe of their 
 being comparatively lefs ruinous in Great Britain, 
 than in other countries. But as every fpecies of 
 tax muft more or lefs prevent the freedom of com- 
 merce, it muft neceflarily have fome effe£t on the 
 revenues of a nation. In many cafes, a fecond tax 
 arifes from the firft which is impofed by government. 
 The tobacco merchant, for example, muft have a 
 ftock fufficient to pay not only the value of the to- 
 bacco, but alfo the duties impofed by government; 
 indifpofingofthetobacco,hemufttherefore charge 
 not only an advanced price, in confequence of 
 
 the
 
 ( '65 ) 
 
 the duty, but alfo a profit on the part of his Hock 
 advanced to pay it: an increafe of expence takes 
 place in this way pretty generally. 
 
 But taxes are not confined in their effects, to 
 the diminution only of the revenues of the mem- 
 bers of the flate, or to impeding the future pro- 
 grefs of a nation in wealth; they may, when car- 
 ried to a certain height, directly affect the capital 
 flock. When taxes, together with the ordinary 
 confumption of the people, exceed the annual re- 
 venue of the fociety, the flock mull be encroach- 
 ed on; and as taxes, in confequence of it, mufl 
 become from year to year lefs productive, there 
 follows the neceflity of heavier impofitions on 
 what remains; and thus affairs become more 
 defperate; bankruptcies, and the poor thrown out 
 of employment, (unlefs arifing from an alteration 
 in the courfe of the demand,) are an infallible 
 n '. of it. A nation may, however, hold out 
 fo. ny years, under the preffure of a load un- 
 ei/- to its flrength. The merchant flill buys 
 and fells, the manufacturer flill employs work- 
 men, but their profits are not equal to their con- 
 sumption; their flock always returns to them of 
 lefs value than when fent out, and mufl in the 
 end wholly difappear. 
 
 Thus, in focieties where the natural order of 
 
 things takes place, taxes are deflructive to both 
 
 the individual and the community. But in thofe 
 
 M 3 where
 
 ( '66 ) 
 
 where the law of entail takes place, a tax may be 
 railed on the 
 
 RENT of LAND. 
 
 We have already fhewn the nature of this fpe- 
 cies of revenue, and the circumflances by which 
 it is regulated. A tax, therefore, laid on it, does 
 not affect the other orders of fociety. 
 
 In many cafes, taxes may be partially impofed, 
 with great advantage, on articles of luxury. As 
 the tax on fpirituous and malt liquors. For when 
 we fay debauchery is encouraged by taxation, we 
 fpeak of it only as a general effect of taxes. 
 When taxes are impofed on articles of luxury, 
 they muft fall lefs heavily on the induftrious 
 poor, than when impofed indifcriminately, or on 
 the articles of immediate neceffity. The induce- 
 ments alfo to marry, and attach themfelves to 
 their families, rnufl be felt more ftrongly by the 
 lower orders. In ftates, however heavily taxed, 
 the lower orders muft either be very miferable or 
 debauched. When young men, in place of mar- 
 rying, lead a diffolute life, and fpend the money 
 in hurtful gratifications, which would enable them 
 to rear up a family, they really afford effential 
 fervice to that part of the lower order, which is 
 direfted by a different conduct. The wages of 
 labour are neceffarily kept up, by which the in- 
 duftrious, who rear up families, are much better 
 
 fupplied
 
 ( '6 7 ) 
 
 fupplied. I r , in ftates heavily taxed, the lower 
 orders were to give up the cuftom of unneceffary 
 indulgence, and appropriate the whole of their 
 wages to the maintenance of a family, the number 
 of people mud increafe confiderably fatter; but as 
 their numbers cannot long run before (lock, wages 
 of labourmuft fall, and the profits of flock rife; 
 that is, the whole of that unneceffarily confumed 
 by the lower orders, would be divided, fo as that 
 one part fhould go to maintain a greater number of 
 people, and the other to the augmentation of the 
 ftock. The population and riches of the country 
 would increafe fomewhat falter, but the conve- 
 niences and neceffaries, which each individual 
 could command for his family, mud be much lefs. 
 Thus it is neceffary, that one half of the workmen 
 fhould be debauched and live fingle, in order that 
 the other may be enabled to live tolerably, and 
 raife up families, fo that the number* of people 
 may be kept up. Corrupt manners act like taxes, 
 by impeding the progrefs of fociety in wealth, 
 and when carried to a certain length, with taxa- 
 tion, afhft in its downfall. 
 
 In the impofition of taxes, a rule which fhould 
 never be departed from, is, to lay them in fuch 
 a manner, that the payment of them cannot be 
 eluded without ferving fociety. All taxes on 
 articles of luxury, are laid agreeably to this rule; 
 all taxes on articles of immediate neceftity, and 
 M 4 particularly
 
 ( > 6 8 ) 
 
 particulary on the necelfaries of life, are laid in 
 oppofition to it. The former, incline the people 
 to induftry and good morals; the latter, to idle- 
 nefs and profligacy. If every perfon, in propor- 
 tion to his ability, really wiihed to contribute his 
 Jhare to the public expence, it would be matter 
 of no importance where taxes were laid; if on the 
 neceffaries of life, and young men continued to 
 marry as ufual, they would not prove more per- 
 nicious than when laid on other things, becaufe, 
 wages of labour would rife in a certain propor- 
 tion : but from the ignorance of fome, and the 
 felfifh motives of others, it is neceffary to put men 
 into the right path, by various methods. 
 
 A fpecies of tax in oppofition to the rule we 
 have mentioned, is the 
 
 TITHE. 
 
 The effects of the tithe has been much conteft- 
 ed ; what we have to fay on it, may be given in a 
 very few words. It is neceffary in the firft place, 
 to remark, that it is impoffible to form a true 
 judgement of its effects, from partial inftances. 
 When certain lands are free from the tithe, the 
 owner enjoys all the advantages; when the farmer 
 can elude the payment, he is gainer; but it would 
 be abfurd to infer from thence, that if all lands 
 were free from the tithe, the landholders alone 
 would gain; or if all the farmers could eafily elude 
 
 the
 
 ( ^9 ) 
 
 the payment, that they would be benefited by its 
 whole amount. We have mewn the circum- 
 ftances on which the Hate of rent depends, and 
 that the revenue of the farmer is regulated by the 
 price of the produce of the land, which cannot, 
 as in other employments, be for any confiderablc 
 time, greater than to fecure to him the ordinary 
 profits. If the tithe were abolifhed, it muft be 
 evident, that the farmer could afford to fell his 
 produce at a price lower than common, by its 
 whole amount, after paying the ufual rent to his 
 landlord. If he did not make the reduction im- 
 mediately, competition and the greater increafe 
 of ftock on the land, than in other employments, 
 muft in a fhort time compel him. Landlords, 
 farmers, merchants, and manufacturers would 
 equally gain by the reduction in the price of food, 
 but particularly the induftrious poor, whofe ex- 
 pences are chiefly confined to it. 
 
 Much more could be faid on the hurtful effects 
 of the tithe, which from their being already well 
 known, we think it unneceffary to repeat. 
 
 CHAP,
 
 ( *7° ) 
 
 CHAP. XVIII. 
 
 National Expcnccs. 
 
 JL HESE are, either the ordinary annual ex- 
 penres, neceffary for the fupport of the flate, or 
 the extraordinary ones in which a nation maybe 
 involved, in confequence of wars, &c. The 
 amount of the former, is generally paid by annu- 
 al taxes; the latter may be advanced by indivi- 
 duals, who receive a certain fum per annum 
 on the amount. Thus, in moll of the nations 
 of Europe, the fum neceffary to pay the interefl 
 of the debts, makes a very confiderable, and of- 
 ten the greateft part of the annual taxes. The 
 fyflem of borrowing, in place of laying a tax 
 equal to the amount of the extraordinary ex- 
 pences, has been approved, on the fuppofition, 
 that it was much lefs deflruclive: as it was fup- 
 pofed that, in the one cafe, a man parted wit 1 , but 
 a part of his income, while in the other it mull 
 diminiffi his Mock, and confequently reduce the 
 flock of the country, the whole amount of the 
 extraordinary expence. To difcover the truth 
 of this proportion, it will be neceffary to know 
 in what manner the flock and revenue is affected 
 
 under
 
 ( '7i ) 
 
 under each fuppofition. In the firft place, the 
 flock which is lent to government is confumed 
 without a poffibility of reproduction. It is taken 
 direclly from one or other of the three divifions 
 of (lock ; if from the mercantile, part of the other 
 two branches of flock mull be turned into the 
 channel from which fo much Hock had been 
 drawn ; if from the manufacturing, the fame mull 
 take place, in order that the proportion of the 
 Mock in each employment may be prcferved, 
 confillently with the a£tual flate of the fociety 
 with refpecl to the quantity on the whole. But 
 it has been alferted, that as the flock is confumed 
 within the fociety, it cannot be of any differvice; 
 we mail, however, fee the abfurdity of fuch an 
 opinion, on obferving the manner in which it is 
 fpent by government, and that in which it would 
 be difpofed of, had it remained in the hands of 
 the individual. In the former cafe, it is confum- 
 ed in employing workmen in making the imple- 
 ments of war, in building fhips, in providing 
 cloathing and provilions for the troops ■ all of 
 which are confumed,\vithout a poffibility of repro- 
 duction. In the latter cafe, that is, when employ- 
 ed by the individual, it is confumed by workmen 
 who produce commodities which are again dif- 
 tributed, and replaced by the produce of the la- 
 bourer. In the firfl cafe, it totally difappears; in 
 the fecond, as it is confumed it is replaced. 
 
 If
 
 ( *7* ) 
 
 If we faw a man employed, one day, in piling 
 up a heap of ftoncs which he threw down the 
 next, we fhould fay, his employment was aufelefs 
 one, although it might perhaps be as fatiguing as 
 that of others, or though he was equally atten- 
 tive; and it would certainly be very abfurd for 
 any one to fay, that he was of as much fervice to 
 fociety as the farmer or manufacturer: but what 
 real difference is there between the employment 
 of fuch a perfon, and that of one who is employ- 
 ed in making gun-powder, for the purpofe of be- 
 ing exploded, or the other articles confumed in 
 a manner not more ufeful to fociety. The idea, 
 becaufe confumption is confined to a particular 
 nation, it cannot be injurious, is the mod abfurd, 
 and it would be happy for mankind if we had it 
 not in our power to add, the mod ruinous idea 
 ever received by men. Are extravagance and 
 ceconomy, words fo well known in common life, 
 without meaning; they both fuppofe confumption ; 
 yet why, if every fpecies of confumption be the 
 fame, do we annex ideas of ruin to the one and 
 profperity to the other? 
 
 The funding fyflem, therefore, by no means 
 prevents the confumption of {lock. The capital 
 flock of the country, on which the employment 
 of labour and every fpecies of revenue depends, 
 would not be more reduced, if a tax were railed 
 amounting to the whole of the fum neceffarv for 
 
 the
 
 ( 173 ) 
 the extraordinary expence. The only difference 
 would be, that the flock of each perfon would be 
 fomewhat reduced, in place of many people giv- 
 ing up the whole and receiving a certain fum 
 per annum on it. Under each fuppofition, the 
 number of labourers which the flock could em- 
 ploy, and the annual produce, would be precifely 
 the fame. But the effecls of the funding fyftem 
 is not confined to the reduction of the national 
 flock, as the impofition of an annual tax be- 
 comes necelfary, in order to pay the interefl on 
 the fum borrowed. The effects of taxes, in keep- 
 ing down the rate of wages and of profit, and 
 thereby preventing the advance of the fociety, in 
 population and in wealth, we have already fhewn; 
 thefe dreadful effetls are, therefore, to be laid to 
 the account of this fyftem. It mould be con- 
 fidered, as not only reducing the capital flock of 
 the country, but alfo preventing the part which 
 remains from accumulating as fafl as it otherwife 
 would do. It is therefore doubly definitive, 
 and the injury, which it does in the former wav, 
 is but trifling, compared with that which it does in 
 the latter. The amount of the original debt is 
 by no means fo great, as the fums which have 
 been paid as interefl on it. If, therefore, the 
 expences of the flate had been paid by a direct 
 tax, the whole of what has been paid, as interefl, 
 would have been faved, and added to the wealth 
 
 of
 
 ( >74 ) 
 
 of the country. Wages of labour mud have been 
 greater, which would have enabled the lower 
 claffes to have reared up more numerous families. 
 We have, therefore, to lament the lofs of a vaft 
 number of people, as well as a vaft quantity of 
 wealth. This fyftem is unjuft and partial: it 
 falls particularly hard on the lower orders. By 
 the diminution of the flock, they are thrown out 
 of employment, or compelled to take lefs wages, 
 and by taxes a part of the miferable pittance 
 which remains, is taken from them; nor is this 
 abfurd and ruinous fyftem of any advantage 
 to the owners of ftock, except for the moment: 
 it leaves them the whole of their ftock, but re- 
 duces their profits. If they look to what may 
 take place within 8 or 10 years, they may 
 fry the funding fyftem is of advantage to them. 
 If they look to the intereft of their children, they 
 will perceive it hurtful. If they look to the intereft 
 of their grand children, they will perceive it ruin- 
 ous. If a man believe he will live but a few years, 
 he will prefer giving up a part of his profit, to fe- 
 cure the whole amount of his ftock; becaufe he 
 may encroach on it; but if he be fure of living 
 for a confiderable number of years, he will prefer 
 to facrifice part of his ftock, to fecure a large 
 profit; becaufe, it would be folly in him to con- 
 fume any part of his capital. But when we look 
 
 to
 
 { 1 7S ) 
 to national benefit, to which private advantage 
 fhould always yield, in what terms can the bane- 
 ful cffecls of this fyftem be exprefled? In a 
 a word, had the real effects of it been known, 
 when it was introduced, it fhould have been ftil- 
 ed, an infamous combination of the rich, againft 
 the poor and againft poilerity. 
 
 Let for a moment be conceived the fituation 
 of Great Britain, if the expences of her former 
 wars had been paid by dirett taxes, the whole of 
 the enormous fums raifed on the people, in time 
 even of profound peace, would have been alto- 
 gether unnecefTary; it would be added to her 
 wealth, and (lie would have carried on the war, in 
 which flie is at prefent engaged, with a fum con- 
 siderably lefs than that neceffary for the fupport 
 of the government in time of peace. If, during 
 the progrefs of her enormous debts, we have feen 
 her advance in wealth and power confiderably 
 falter than the other nations of Europe ; what 
 would be her prefent fituation, if fhe had been 
 totally freed from them, or if the expences 
 of her wars had been paid by taxes immedi- 
 ately impofed ? Even during the Ameri- 
 can war, the moll expenfive me ever waged, 
 me was not reduced in wealth ; as the favings of 
 individuals more than overbalanced the expences 
 of the government ; happy if thefe expences, by 
 
 being
 
 ( »76 ) 
 
 being raifcd immediately from the people, had 
 drawn on no other. 
 
 In the prefent war, the fame fyftem is purfued; 
 the confumption of capital, attended by the 
 taxing of the capital that remains : whatever the 
 wealth and revenues of Great Britain be fuppof- 
 ed, if under the preMure of the law of entail, by 
 which 12 millions are annually confumed, and 
 her taxes amounting together to about 30 milli- 
 ons, fhe advanced but (lowly, it is eafy to fee, that 
 a further confumption of more than 20 millions 
 annually, together with the intereft on it, muft 
 either flop her altogether, or rather put her 
 back : to this we are to add the interruption of 
 her commerce, and the great number of her fhips 
 captured by the enemy, the unavoidable con- 
 comitants of wars. 
 
 In the nation to which me is oppofed, we fee 
 another fyftem totally different adopted ; we fee 
 the emiffion of paper money to an amount 
 fcarcely conceivable, and its confequent depref- 
 fion. In judging of the a£lual expences of 
 France, we muft firft look to the neceffary con- 
 fcquence of increafmg the quantity of money in 
 circulation. It appears matter of furprize in 
 France, that their affignats fhould be depreciat- 
 ed, as the value of the national lands, which may 
 be deemed a fufficient fecurity, is confiderably 
 greater than the whole amount of the affignats in 
 
 circulation.
 
 ( '77 ) 
 
 circulation. It was never expecled that afiignats 
 mould ever ferve any other purpofe than that of 
 circulation, or that they had any particular virtue 
 in them above the money which they are intend- 
 ed to fupply. We have (hewn, however, that 
 even money, when increafed to a certain degree, 
 mud fall in its value, and exactly in proportion to 
 the extraordinary quantity. Every perfon pofTefT- 
 ed of money, or any thing ferving as money, as the 
 .afiignats of France, muft, in order to difpofe of it 
 to advantage, put it into circulation ; and as we 
 have formerly obferved, the value of each portion 
 muft depend on the quantity of the whole. It 
 would be as abfurd to fuppofe, that commodities 
 mould bear the fame value, after the quantity of 
 money was increafed, as that a man in a defart 
 could convert, at pleafure, a (hilling into a fhilling 
 loaf. If 5 men go to market with 5 (hillings 
 each, and there be at market goods of the value 
 of 25 (hillings, each perfon may procure goods 
 of the value of 5 (hillings; but if one perfon 
 mould convert his 5 (hillings into 10 or 15, if he 
 purchafe goods at the old price, none will remain 
 for fome of the reft ; but all going to market to- 
 gether, and each wifhing to procure as much as 
 poffible, it muft lower the value of each portion 
 of money ; or, what amounts to the fame thing, 
 raife the value of the goods. Unlefs, therefore, 
 N it
 
 C '78 ) 
 
 it can be demonftrated, that individuals have a 
 greater intereft in hoarding afiignats than fpecic, 
 their value mull fall as the quantity increafes. 
 Had the convention of France a treafure of gold 
 and filver at command, it muft haveprecifely the 
 lame effect, if, as their afiignats are, it could be 
 kept within the country; but being the ftandard 
 of value in other countries, it would be carried 
 out, when it had affected the nominal value of 
 of goods in general. 
 
 Thus, by the emifiion of afiignats, we fee the 
 ftandard of value totally altered, we fee it affect 
 the nominal value of every fpecies of goods; arc 
 we juftified then in computing the expences of 
 France, by money which no longer retains the 
 fame value? We muft look to things, and not 
 to founds: the expences of a nation are either 
 great or fmall, as a greater or fmaller portion of 
 Mie annual revenue is confumed. If, in Great 
 Britain, it was enacted, that each fhilling mould 
 be called a pound, and each pound a fhilling, we 
 fhould fay our expences iinee the commence- 
 ment of the war have amounted to 70 millions 
 of (hillings, or 1400 millions of pounds, but the 
 feal expences would ftill be the fame, the fame 
 portion of the national ftock confumed. 
 
 The expences, therefore, of the French go- 
 vernment, are by no means to be eftimated by 
 the number of livres, unlefs we apply a certain 
 
 determinate
 
 ( *79 ) 
 
 determinate idea to the value of each livre, de- 
 termined by the quantity of confumable commo- 
 dities which it can command; and this it is evi- 
 dent is no longer the fame. 
 
 The quaniity of money, necefTary for the 
 circulation of France, before the war, it is 
 generally fuppofed, was equivalent to go 
 millions fterling. In the month of December, 
 the total of their expences amounted to 
 503,478,000 livres, about £22,000,000. there 
 were then upwards of 10,000,000,000 in circula- 
 tion, about ^437,500,000; they mull, therefore, 
 have been reduced nearly as low as one fifth ; 
 their expences then muft have amounted to 4 
 millions and a half. Were we to fuppofe the 
 war to continue, for fome years longer, at the fame 
 real expence to France, we mould fee it as repre- 
 fented in aflignats rife to an incredible amount ; 
 but every time the quantity in circulation is 
 doubled, we are not to fuppofe that the confump- 
 tion has been equal to the quantity of money 
 which had originally ferved the purpofe of cir- 
 culation ; that is, when the quantity at prefent 
 in circulation, about 10,000,000,000 is increafed 
 to 20,000,000,000, that their expences have 
 amounted to 90 millions fieri, the fum formerly 
 neceffary for circulation ; at moft it cannot 
 amount to more than 67 millions and a half. 
 For, in our chapter on money, we have fljewn, 
 N 2 that
 
 ( i8o ) 
 
 that as the quantity in circulation is increafed, 
 the value of each portion is gradually reduced; 
 thus, if 20 millions be introduced into a country 
 that has 20 millions in circulation, the laft milli- 
 on brought in can procure but half the quantity 
 of goods that the firft did, as the nominal value of 
 goods mult be raifed to nearly twice that which 
 they had formerly borne. 
 
 The real effects of the emiffion of affignats are, 
 firft, the rife of every fpecies of goods and of re- 
 venue, but a greater rife in the price of goods 
 than of revenue. If goods and revenue were 
 raifed together, in the fame proportion, things 
 would be exactly as they were ; but the rife of re- 
 venue is in confequence of the rife in the value 
 of goods, by the conftant emiffion of affignats: 
 the one muft neceflarily go before the other. The 
 greater rife in the value of goods than of revenue, 
 muft be determined by the quantity of affignats if- 
 fued to purchafe the goods neceflary for the con- 
 fumption of the armies, fleets, &c. of France. 
 This is the tax paid by the people. To eluci- 
 date this important fubjeft a little more fully. 
 If we fuppofe the money in France turned three 
 times a year, (whether fafter or flower is of no im- 
 portance to our fuppofition) that is, in 4 months 
 10,000 millions of affignats appear for the pur- 
 chafe of goods, if within thele four months no 
 affignats be iflued by government, the whole of 
 3 thc
 
 ( i8i ) 
 
 the goods at market will be diftributed to the 
 workmen, manufacturers, merchants, landhold- 
 ers, Sec. and there will appear but io,ooo milli- 
 ons during the four months following; but if the 
 expences of the flate amount to 2000 milli- 
 ons of livres, as reprefented in affignats, they 
 muft come, at market, in competition with the 
 1 0,000 millions, and the goods which had fold in 
 the one cafe for io,coo, would then fell for 
 12,000; that is, while the money which reprefent- 
 ed the revenue of each perfon remained ftation- 
 ary, goods had been raifed in their value; but 
 the additional 2000, now becomes the property 
 of the different orders of fociety, and are diftri- 
 buted amongft them; the merchant muft give a 
 greater price to the manufacturer for his goods, 
 the manufacturer muft give greater wages to his 
 workmen; and thus the next four months, 12,000 
 millions of livres reprefent the revenues of the 
 different orders : but, during thefe four months, 
 the expences of government, although really the 
 fame, muft be reprefented by a greater quantity 
 of affignats : to procure the fame quantity of 
 goods 24CO millions become neceffaiy. Thus 
 we difcover the manner in which the emiffion of 
 affignats affects the revenues of France. 
 
 It will be readily feen, that this is a moft equit- 
 able mode of defraying the public expence, as 
 N 3 the
 
 ( 18a ) 
 
 the proportion which each perfon contributes is 
 determined by the abundance of his revenue. 
 Both profits of ftock and wages of labour are 
 taxed, and each exactly in the proportion that 
 they ought. The diminution of profit, which pre- 
 vents, accumulation, is attended by a diminution 
 of wages, which prevents the lower orders from 
 multiplying. 
 
 Whether the taxes, thus raifed, together with 
 the confumption of the country, exceed the 
 amount of their foil, labour, and ftock, is not * ery 
 doubtful. If the expences of Great Britaiw (al- 
 lowing nothing for the law of entail, which is now 
 done away in France) in peace, amounted to up- 
 wards of 17 millions fterl. and under this load me 
 advanced, though but flowly, it is fcarcely pofli- 
 ble, that the confumption of about 55 millions 
 annually, under the prefent circumitances of 
 of France, when we confider the vaft extent and 
 wealth of the countries from which fhe at prefent 
 derives a revenue, will oblige her to encroach on 
 her ftock. But although this became neceifa- 
 ry, the confumption of the ftock of France 
 would be attended by none of thofe dreadful ef- 
 fects that it muft be in England. By the emif- 
 fion of affignats, a tax is raifed direclly on the 
 revenues of the people; if this, together with their 
 confumption, exceed the annual amount of the 
 revenue, a certain portion only of the ftock is 
 
 confumed,
 
 ( i8 8 ) 
 
 confumed, the part which remains is left unload* 
 ed. In England, however, a part of the ftock 
 is direclly confumed; in all her former wars, 
 when flie was not fo much encumbered by annu- 
 al taxes, the favings of individuals, from their re- 
 venues, more than overbalanced the confumption 
 of flock: but the power of accumulating is al- 
 ways direclly prevented by the annual taxes* 
 which, under the fyftem at prefent purfued, are 
 unavoidable. When, therefore, in Great Britain 
 the annual expences exceed the annual income, 
 ihe is not only obliged to confume part of her 
 ftock, but the part which remains is prevented 
 from being increafed. When the remaining 
 ftock becomes inefficient to pay the intereft of 
 debts, formerly contracted, it mufl be broken in 
 on, to pay even the intereft. Whenever this 
 takes place, unlefs a bankruptcy, by ruining a 
 few thoufands, fhould fave the nation, fhe muft 
 quickly fall to decay *. In nations, as in Prance, 
 where the annual expences are direclly paid out 
 of the annual revenues, and if that be not Effi- 
 cient, direclly paid from the ftock; the decline, if 
 fuch enormous expences be continued, muft be 
 gradual; but the moment they ceafe, individuals 
 are foon enabled to make up their lofles, by their 
 profits being left unloaded. 
 
 * We (hall at a future period offer fome observation* on the 
 xnoft advifeable meaus of redeeming public debts. 
 
 N 4 Of
 
 ( i«4 ) 
 
 Of all the taxes which human ingenuity could 
 devife, thofe obtained by the emiflion of paper 
 money are, when well underftood, the leaft de- 
 ftructive. It is liable to but one objection ; the 
 poffibility of forgeries. The convention of 
 France appears, however, to have been totally 
 ignorant of its real nature, when it adopted the 
 unjuftand impolitic law of the maximum. Com- 
 modities mould be allowed to find their own va- 
 lue; and, of all commodities, food is the moil dan- 
 gerous to tamper with. The natural rate of food, 
 as well as of other commodities mould rife in 
 proportion to the quantity of affignats in circula- 
 tion. This, experience has demonftrated. 
 
 When the real effects of the emiflion of paper 
 money are underftood, we will fee the necelTity of 
 laws, in order to prevent too great a fliare of the 
 public burthens from falling on a few individu- 
 als. A law, to regulate the payment of debts, 
 rents, &c. appears to be one of thefe. If an 
 individual contract a debt, at a certain time, he 
 may pay the fame debt at a diftant day with the 
 fame fum in paper money, but which, in confe- 
 quence of the increafed quantity, may bear a very 
 different value. This, it behoves every govern- 
 ment to guard againft, by fixing the value of the 
 paper money; that is, determining what quantity 
 of it fiiould exchange for a certain quantity of 
 
 fpecio
 
 ( i8 5 ) 
 
 fpecie, which fhould be always confidered as the 
 ftandard. 
 
 After treating of the immediate effe&s of the 
 emiflion of paper money, it will be neceffary to 
 call our attention to the manner in which the cir- 
 culation of a country may be freed from it, after 
 a further emiffion becomes unneceffary. We 
 mall fir ft offer fome arguments which are appli- 
 cable to France, in common with other countries, 
 and then confider the nature of the peculiar cir- 
 cumftances under which me is placed. 
 
 It will be readily feen, that a fum, in fpecie, 
 equal to the amount of that which had formerly 
 ferved for circulation, can at all times command 
 the whole mafs of paper money, at its reduced 
 value. Thus taxes, to half the amount of the 
 expences of the old government of France, 
 would, in little more than 5 years, free the cir- 
 culation of the whole of the affignats. For if 90 
 millions were neceffary, when the people were op- 
 preffed by the law of entail, and the great annual 
 taxes; it would fcarcely require more than 60 or 
 70, under the circumftances in which France will 
 be placed at the termination of the war. Thefe 
 taxes may be paid either in fpecie, or affignats 
 received at their reduced rate. If in affignats, 
 they fhould be immediately deftroyed. If in 
 fpecie, a quantity of affignats fhould be purchaf- 
 ed with it, and alfo deftroyed. Or, the circula- 
 tion
 
 ( >86 ) 
 
 tion may be freed from them, by making a forci- 
 ble and gradual depreffion of their value ; that is, 
 by altering, at different times, the relative value 
 between fpecie and affignats, and at length pro- 
 hibiting their being received in any fpecies of 
 payment. The objection to the former mode 
 is, chiefly, the neceffity of any fpecies of tax, 
 above that neceffary for the fupport of the ftate. 
 The objections to the latter, are the difficulty of 
 making the depreffion in fuch a manner as that 
 each individual mail be affected, in proportion 
 to his wealth, precifely in the fame degree, and 
 the interruption which commerce mu't fuffer, in 
 confequence of the artifices and frauds of certain 
 individuals. It muft confequently be, for thefe 
 reafons, more odious, and as the ultimate effects 
 of both are alike, that fyftem fhould be adopted 
 under which every perfon knows to what he has 
 to truft. Every country, which purfues this 
 mode of defraying the extraordinary public ex- 
 penccs, will have to purchafe from the other na- 
 tions, the money necelfary for its circulation, 
 which the emiffion of paper money drives out. 
 When a further emiffion becomes unneceffary, 
 and it is refolved to call in all the paper, its va- 
 lue mould be fixed, determined by the quantity 
 in circulation ; that is, as in France, whether one 
 livre in fpecie (hall be worth 5, 10, or 15 in pa- 
 per. When any part is withdrawn from circula-
 
 ( i8 7 ) 
 
 tion, if the remainder be kept at its reduced va- 
 lue, (which ought to be done,) it, together with 
 the fpecie already in the country, will be infuf- 
 ficient for the circulation. The nominal value of 
 goods muft fall, as the reduced quantity of paper 
 at the reduced value, together with the fpecie, 
 muft command the goods at market. It muft 
 therefore become the intereft of people to carry 
 money in, and goods out, until the whole of the 
 paper \ withdrawn from circulation, and the 
 nonr .ii value of goods on a level with thofe in 
 oti r countries. If the value of the paper be 
 reduced by law, without withdrawing any from 
 circulation, the fame will take place, as in both 
 cafes the value of fpecie is raifed fomewhat higher 
 than it is in other countries. 
 
 Although government, in withdrawing paper 
 money from circulation, bv the impofition of 
 taxes, commands or receives no part of the an- 
 nual produce, yet it has precifely the fame effect 
 on the revenues of the people, as a tax to the 
 fame amount, in countries where the circulation 
 is carried on by means of fpecie. By deftroying 
 a part of the paper money, a gap is made, which 
 muft be filled up by money from other coun- 
 tries; and thus, in place of the people giving up 
 a portion of their revenues to the government, 
 they give it to foreign nations : fo that the effecis 
 ^re precifely fimilar. In the firft emiflion of pa- 
 per
 
 ( .88 ) 
 
 per money, the fpecie is driven out, and goods 
 are carried in, fo that the expences of wars are 
 not felt, until the whole of the money is carried 
 out, and the further emiflion of paper deprives 
 the people of part of the produce of their labour; 
 and on the other hand, the expences are felt, 
 while the fpecie which had at firft been driven 
 out by the paper money, is carried in from other 
 countries. 
 
 A law may reduce the value of paper money, 
 when compared with that of fpecie, although it 
 cannot raiie it. Thus, if the natural value of 
 affignats be one fifth, in confequence of the quan- 
 tity in circulation, it may be reduced to one 
 tenth, by enacting that they mould rfot be receiv-. 
 ed in taxes, but at the reduced rate, or confidered 
 as a legal tender in payment of debts, &c. it muft 
 then become the intereft of people to carry mo- 
 ney into the country, as the aflignats, at their re- 
 duced value, would be infufficient for circula- 
 tion : but if there was a law, that 5 livres in aflig- 
 nats fliould exchange for 5 in fpecie, it could have 
 no other effect, than to fend all the fpecie out of 
 the country, as it mull be of five times the value 
 in any other. 
 
 As fpecie cannot, for any length of time, bear 
 a lower value in one country than another, it mult 
 be evident, that if the circulation of a country, in 
 which there exifts a neceflity of the emiflion of 
 
 paper
 
 ( i8g ) 
 paper money, be partly compofed of fpecie, that 
 the value of the paper may be lower, than if the 
 fpecie was entirely driven out. If, for example, 
 the circulation of France required 90 millions 
 fterling, and there were affignats to the amount of 
 90, and fpecie to 45 millions, the value of the 
 affignats would be half that of the fpecie Hence 
 we fee the neceffity of very fevere laws, to prevent 
 the depreciation of the paper money. It is true, 
 thefe laws can never raife the value of paper to a 
 level with that of fpecie, the moment there is in 
 circulation, a quantity of paper, greater than the 
 money which had originally ferved all the pur- 
 pofes of circulation; but thefe laws can force the 
 fpecie out of the country, and thereby prevent the 
 paper from being dill further depreciated. If in- 
 dividuals were allowed to receive paper money, 
 at a very reduced value, or refufe it altogether, 
 a very fmall part of the money would be carried 
 out; nor could the public expence be paid in this 
 manner. When government is not under a ne- 
 ceffity of i fRiing any more paper money, a fimple 
 permiffion to allow the people to receive it at any 
 rate they pleafed, would alone be fufficient, in 
 the courfe of a fhort time, to put it out of circu- 
 lation. 
 
 But, as in France, the value of the confifcated 
 lands, is great enough to allow the purchafe of the 
 affignats at their full value; we fhall now examine 
 
 the
 
 ( *9° ) 
 the policy of freeing the circulation, by means of 
 the fale of thefe lands. It will firft, however, be 
 neceffary, to offer fome obfervations on the na- 
 ture of the capital value of land. Profits of ftock, 
 which regulate the intereft of money, will be found 
 to regulate the value of land alfo. A man, in 
 difpofing of his money, will be fadsfied with a 
 fmaller fum per cent, if he purchafe lands with it, 
 than if he lend it on intereft; becaufe it is better 
 fecured, and he derives other advantages from it: 
 but thefe are equivalent to a certain difference 
 only ; whatever, therefore, reduces the profits of 
 ftock, raifes the capital value of lands : and this, 
 as we have already fhewn, is done by the law of 
 entail and annual taxes. Moreover, when, after 
 the divifion of the lands, the accumulation of ftock 
 is fuch, that the price of the produce is little more 
 than fufficient, to fecure to the cultivator the ordi- 
 nary profits, the capital value of landmuftbe con- 
 fiderably reduced. But, as in France, the value 
 of the confifcated lands is yet confiderable, in con- 
 fequence of this divifion not having taken place, 
 and the interruptions which agriculture fufFers ; 
 and as the perfon who can obtain any part of them, 
 muft receive a revenue greater than he is entitled 
 to from his labour or ftock ; we fhall point out 
 the effects of redeeming the affignats, by the fale 
 of thefe lands, on the feveral orders of ibciety. 
 
 We
 
 ( tgt ) 
 
 We have already feen that, in the emiflion of 
 affignats, each order contributes its proper pro- 
 portion to the expences of the ftate. We are then 
 to confider, if each order would be benefited in 
 the fame degree, if the affignats were purchafed. 
 by the fale of the lands. If we fuppofe the value 
 of the lands juft equal to the affignats in circula- 
 tion, at their full value, and each perfon to re- 
 ceive a quantity of land, in proportion to the 
 quantity of affignats in his hands, the diilribution 
 would be extremely partial. It is generally fup- 
 pofed, that the quantity of money ncceffary for 
 circulation, may amount to about one fourth or 
 one fifth of the annual revenue. Now, as the lower 
 orders have never more than half their week's 
 wages, on an average, in their hands, the remain- 
 der of the money muft neceffarily be in the hands 
 of the other orders. Each citizen, having contri- 
 buted his proper fhare to the public expence, dur- 
 ing the emiffion of the paper money, it would ap- 
 pear that each muft naturally have an equal claim 
 on the public lands. But if they be diftributed in 
 this way, the lower orders would receive lands, 
 (or what amounts to the fame thing, the value of 
 lands, as they might be fold for their benefit,) to 
 the amount of half their weekly wages, while 
 the other orders would receive lands, to the value 
 of one fourth or one third of their yearly revenue ; 
 we fay ouq fourth or one third, becaufe as much
 
 C *9 a J 
 
 as the lower orders have in hand, lefs than their 
 fhare of the money in circulation, in proportion 
 to their annual revenue, the other orders muft 
 have more. But although one order had no 
 greater proportion of their annual revenue in 
 hand than another, it would ftill be a very par- 
 tial divifion. If the wages of the workmen be, 
 for 4 months, /g, and the profit of the manufac- 
 turer for the fame period, ^90; and if, in confe- 
 quence of the emiffion of a large quantity of 
 paper money, the former be reprefented by £4.5, 
 and the latter by /450, and there be lands to the 
 value of ^495 in fpecie, to be divided, to which 
 each, as an individual, has an equal right, it would 
 certainly be a very unfair mode of divifion, if 
 the manufacturer were to receive 11 times the 
 quantity which fell to the fhare of the workman. 
 The lands are of a much greater value than what 
 has *been really expended by the republic; for 
 the manufacturer who now advances 5 livres, 
 nominally, to government, really advances but 
 one, as the paper money is fo much reduced 
 in value; the fame with the labourer*. If the 
 afllgnats, therefore, be purchafed by government 
 
 * Since the above was written, the quantity of affignats has 
 been confiderably increafed, attended by a very great deprecia- 
 tion of their value. The reader, therefore, mult receive the 
 above, and many of the fuppofitions which follow, only as illus- 
 trations of the general principle. 
 
 at
 
 ( 193 ) 
 at their full value, it will not only repay individu- 
 als what they have really advanced, but confider- 
 ably more. The manufacturer, who nominally ad- 
 vances 50, and really but 10, will receive 40 more 
 than he has advanced; while the labourer, who has 
 advanced 5 nominally, and really but 1, receives 
 but 4. Under every fuppofition, the withdraw- 
 ing affignats from circulation, by the fale of the 
 lands, mult be impolitic and partial. There ap- 
 pears, therefore, but one way, by which the lower 
 orders can derive any advantage from the confif- 
 cated lands, that is by felling them, and giving 
 to each perfon the (hare of the produce. But 
 this, though pofftble would be extremely impoli- 
 tic, and would be attended by very fatal effects, 
 even to the poor. The flock which the indivi- 
 dual w'ould give for the land, would be directly 
 divided amongft the lower orders, and moft pro- 
 bably coniumed: they mull then, neceffarily, be' 
 in a worfe fituation, than if it had been left in the 
 hands of the original owners, and the lands given 
 away, in place of being fold; as the (lock which 
 remained muft be infurhcient to afford them em- 
 ployment. Confidered in any point of view, it 
 would be highly impolitic, for although there 
 were fome, who had fo relight fufheient to prevent 
 them from confuming it, they muft in order to 
 derive any advantage from it, work independently 
 of employers : but this, in moft employments, is 
 O altogether
 
 I 194 ) 
 
 altogether impofiible, as extenfive works and largo 
 flocks are abfolutely neceffary. 
 
 Thus we may perceive, that the confifcated 
 lands are really of but little afliftance to France. 
 Had the original owners retained poffeffion of 
 them, its force might have been precifely the 
 fame. There remains then a queftion to be de- 
 cided, in what manner can thefe extenfive lands 
 be difpofed of, fo as that they fhall be of the 
 greateft poflible fervice to every defcription of 
 men? We have already pointed out the advan- 
 tages of the lands being divided into fuch por- 
 tions, as lay their owners under the neceflity of 
 cultivating them, but the way in which this may 
 beft be done, is what we have no bufinefs to offer 
 an opinion of. 
 
 We are now enabled to form a judgement of 
 the comparative ftate of the finances of France 
 and Great Britain. The annual expences of 
 the former, amount to about 55 millions fter- 
 ling*, which will ceafe at the termination of 
 
 * We have here eftimated their expences by thofe of Decem- 
 ber : there were, however, even then, fome fpecie and forged 
 affignats in circulation, and confequently their real expences muft 
 have been much lefs. Since that time, jobbing, and the intro- 
 duction of an immenfe quantity of forged affignats and fpecie 
 have greatly depreciated thofe ifiued by the government. We 
 muft always, however, judge of their real expences, by the de- 
 gree of this depreciation; and at which, whatever it be, they 
 lhould be redeemed. 
 
 1 the
 
 ( *95 ) 
 the war; thofe of the latter, amount to more than 
 20 millions of annual taxes, and about the fame 
 fum in ftock, to which if we add the foreign loan, 
 which muft be confidered as a further confump- 
 tion of ftock, the whole will amount to about 45 
 millions. We fee France in the prefent conteft, 
 deriving her revenues from a country about 4 
 times as rich and populous as Great Britain, and 
 the whole of thefe revenues directed to one ob- 
 ject. We fee Great Britain with refources fo 
 much inferior, at nearly the fame expence; but 
 her revenues are not like thofe of France, directed 
 wholly to the fupport of the war, but a great part 
 to the payment of the intereft on the debts con- 
 tracted in the wars in which fhe has been engaged 
 for this century. It does not require the gift of 
 prophecy, to fbretel the confequences of perfe- 
 vering in this ruinous conteft. 
 
 O a CHAP.
 
 ( 196 ) 
 
 CHAP. XIX. 
 
 Wealth. 
 
 A] 
 
 .LTHOUGH, from what we have already faid, 
 the nature of wealth may be fufficiently under- 
 stood, yet it may, perhaps, be not altogether un- 
 neceffary to add a few more obfervations. As 
 civilized fociety is not a fociety of farmers, or 
 merchants, or labourers, but a whole, of which 
 each is a part ; fo mall we find, what is generally 
 ftyled the wealth of fuch a fociety, compofed of 
 parts, the ufes and value of which depend not fo 
 much on their own nature, as on the relations 
 which they bear to each other. 
 
 Wealth is of three kinds, lands, houfes, flock ; 
 the latter is divided into fixed frock, or contri- 
 vances for abridging labour, and confumable 
 commodities. Thefe commodities are the reve- 
 nues of the citizens, but are confidered by their 
 owners, only, as a fource of revenue. It will na- 
 turally follow then, as the goods which conftitute 
 flock and revenue are precifely the f?:Sfe, and 
 both bear a nominal value, that the proportion 
 of the annual produce, which the polTeffion of 
 -ihefe commodities give to certain people ; or, in 
 
 other
 
 ( 197 ) 
 
 other words, high or low profits, will regulate 
 what is commonly called the capital value of 
 other fources of revenue; that is, when certain 
 lands or houfes yield a certain revenue, their ca- 
 pital value will be either high or low, as profits of 
 flock are high or low. We fpeak of the capital 
 value of land, as a thing in exiftence; it would, 
 however, be juft as rational to fpeak of the capi- 
 tal valne of a penfion, if it was allowed to be fold, 
 as abfolutely exifting. A capital value is laid on 
 certain things, for mere convenience, becaufe in- 
 dividuals frequently wifli to exchange the fubje£t, 
 from which they derive a revenue, for another ; 
 fome men are fond of employment, others ofeafe: 
 but it is the revenue that is exchanged, and if 
 one be greater than the other, it is always fup- 
 pofed compenfated by other circumftances: hence 
 the rife of rent, in a twofold way, affecls the va- 
 lue of land. If rent could be raifed, without 
 affecting the profits of flock, a rife in value would 
 naturally take place; but as every rife of rent 
 fuppofes a fall of profit, the value of the land 
 muff, be raifed in a flill greater degree. We 
 have faid the capital value of houfes is ailb regu- 
 lated by the profits of ftock. The rent which a 
 houfe affords, is not always regulated by the 
 quantity of flock which had been expended in 
 building it, and the moment it is erecled, whatever 
 have been the expences, its capital value, which 
 O 3 may
 
 ( »g8 ) 
 
 may be termed its exchangeable value, muft be 
 determined by the rent. Every fpecies of fixed 
 flock, alio, derives its value from the fame fource. 
 Revenue, therefore, or the regular return of 
 commodities, can alone give a value to every 
 thing that is not commodities. If thefe be taken 
 away, houfes, lands, fixed flock, all lofe their 
 value; as in place of that application of labour, 
 from which ultimately, though flowly, a great 
 production arifes, men would be compelled to 
 feek for immediate fubfiflence, in the produce of 
 immediate labour. 
 
 In the progrefs of wealth, we have fhewn the 
 progrefs of population, and the circumftances 
 which determine a greater or fmaller proportion 
 of the flock of the fociety, to the different 
 employments. When the market for the pro- 
 ductions of every part of the country is mofl ex- 
 tenfive, cazteris paribus, a greater proportion to the 
 mercantile ; when the fociety is advancing faflefl 
 in wealth and population, ceteris paribus, a greater 
 proportion to agriculture, and the ufeful manu- 
 factures. 
 
 The reader, however, mufl recolle6l, that though 
 this is the natural order, in which flock is distri- 
 buted amongfl the feveral employments, yet that, 
 in every fociety, in confequence of regulations, 
 (the effects cf which will make part of the fubjeft 
 of a future work J this natural diftribution of 
 
 flock
 
 C 199 ) 
 
 ftock is prevented. It will be abfolutely necef- 
 fary for us, therefore, to remark the relations in 
 which different countries ftand to each othef, 
 A favourite fyftem takes place in all ; fome en- 
 courage agriculture, others commerce and manu- 
 factures, but Mill the general principles hold. 
 The ftock of Great Britain, may be the manu- 
 facturing and mercantile ftock of America ; the 
 ftock of America, the farming ftock of Great 
 Britain; but {till ftock, in the feveral employments, 
 whether in France, in Great Britain, America, or 
 Spain, muft bear certain relations to each otl cr, 
 determined by the circumftances already pointed 
 out. 
 
 In the XlVth Chapter, we have fhewn the 
 effects of credit, only, as it relates to a particular 
 country ; but when long credits are given by the 
 merchants and manufacturers of one country to 
 thofe of another, flock becomes in reality em- 
 ployed for the advantage of the latter. Ii has 
 been afferted, and with truth, that the population 
 of Great Britain has not kept pace with us wealth : 
 great part of her ftock is employed as the mer- 
 cantile ftock of other countries, and in place of 
 contributing to the increafe of people in Great 
 Britain, contributes in a great degree to the po- 
 pulation of America and other countries, to the 
 merchants of which fuch long credits are granted ; 
 thus, allowing a greater proportion of ftock to 
 O 4 remain
 
 ( 200 ) 
 
 remain in the farming and manufacturing em- 
 ployments, on which workmen are more imme- 
 diately dependent. 
 
 CHAP. XX. 
 
 Recapitulation and Conclujion. 
 
 I. XN focieties, where the inhabitants are more 
 numerous than the fpontaneous produce of the 
 lands can maintain, the commodities at a certain 
 moment confumed, never arife wholly from the 
 labour at that moment employed. 
 
 II. In every fociety, there muft be a quantity 
 of every fpecies of commodities fufficient for its 
 confumption, until thofe of the fame kind can be 
 produced. — The quantity of corn got in at time 
 of harveft, mud be fufficient for confumption 
 until the return of the next. 
 
 III. No fociety being confined, in its confump- 
 tion, to its own productions, with part of which 
 it purchafes the produce of others, a quantity of 
 commodities, becomes neceffary, fufficient for 
 confumption, until thofc produced in foreign 
 
 countries can be procured. Although fugar 
 
 be purchafed with part of the produce of England, 
 
 yet
 
 ( 2G1 } 
 
 yet fugar does not immediately follow the pro- 
 duction of thole goods, with which it is pnrchafed. 
 There mull, therefore, be not only commodities 
 fiifficientfor the confumption of thofe employed 
 on thefe goods, but a quantity of fugar fulncient 
 for confumption until more can be procured. 
 
 IV. As labour is not rewarded by its imme- 
 diate produce, it will follow, that the number 
 of people will always be dependent on the quan- 
 tity of commodities exilting within the fociety, and 
 that an increafe of commodities muft always go 
 
 b .fore an increafe of people. The infant eats 
 
 and is clothed, but produces nothing. 
 
 V. It is impofhble for an increafe of popula- 
 tion to take place, unlefs labour be employed in 
 agriculture and the ufeful manufactures: but as 
 a town may increafe in population without agri- 
 culture, becaufe of its connection with the coun- 
 try in its neighbourhood, fo may a fociety, even 
 though employed in the production of articles of 
 luxury, provided thofe articles are fent to others, 
 for the purchafe of the produce of agriculture ; 
 and fo may a fociety be ftationary, even though 
 employed in agriculture, mould it purchafe with 
 its produce articles of luxury. This points out 
 the relation in which different countries, or parts 
 of the fame country, may ftand to each other. 
 The general propofition is (till, however, true, 
 that agriculture and the ufeful manufactures muft 
 
 be
 
 ( 202 ) 
 
 be attended to, in order to allow an increafe of 
 people. The increafe of men, in a favage ftate, 
 is limited by the fpontaneous produce of the foil ; 
 in civilized fociety, by the proportion of labour 
 ufefuily employed. Nature in the one cafe, man 
 in the ether, is the nurfe of the rifing generation. 
 
 VI. The commodities within the fociety, (II. 
 III.) are the revenue of that fociety, until others 
 are produced or procured. That the confump- 
 tion cannot exceed this quantity, is evident, and 
 that the confumption fhall be equal to it, is 
 fecured by the intereft of thofe pofTefTed of them. 
 
 VII. Thefe commodities are diftributed amongft 
 three orders ; thofe poffefled of them, as farmers, 
 manufacturers, and merchants, the owners of the 
 land, and the labouring part of the community. 
 As the confumption of one order is raifed, that 
 of another mult, confequently, be diminifhed. 
 
 VIII. The family which the labouring man is 
 able to maintain, will depend on the rate of his 
 wages. In countries, therefore, advancing in 
 population, the proportion of the commodities, 
 diftributed as wages, will bear a greater, that as 
 profit and rent, a fmaller proportion, to the whole 
 niafs of commodities within the fociety. But the 
 abfolute quantity diftributed to each order, will 
 depend on the fertility of the foil and the divifon 
 of labour. 
 
 IX.
 
 ( 20 3 ) 
 
 IX. The commodities which the lower orders 
 con fume, are of a different lpecies from thole 
 confumed by the others. In focieties, therefore, 
 where the wages of labour are high, there will 
 exiit (XIX.) and be a demand for more of the 
 produce of agriculture, and the ufeful manufac- 
 tures, than in thofe where they are low, and 
 confequently a greater proportion of labour and 
 flock will be employed in their production. (V.) 
 
 X. The quantity of commodities confumed 
 within a given period, ought to be regulated by 
 the quantity exifting, and the time before others 
 can be produced or procured. (XIV.) 
 
 XI. After the divifion of employments has been 
 eftablifhed, as no individual is employed on all 
 the articles of his confumption, nor confumesthe 
 whole of his own produce, barter or a circulating 
 medium becomes neceiTary, in order to fupply 
 himfelf by exchange. But barter mull, in a fhort 
 time, give place to a medium, as innumerable 
 articles go through the hand of hundreds, before 
 they are finifhed, and confequently before they 
 acquire an exchangeable value with confumers*. 
 
 XII. The circulating medium which appears 
 for the purchafe of goods, within a certain period, 
 
 * Even the ancient Britons, according to Caefar, ufed a cir- 
 culating medium. '* Utuntur (fays he) aut aereo, aut taleis ferreis, 
 ad certum pondus examinatis, pro nummo." 
 
 will
 
 ( 201 ) 
 
 will depend on the quantity of the whole, and the 
 flowncfs or fnftnefs with whi::ii it paries through 
 the hands of the i'evcral orders. 
 
 XIII. The quantity of the goods which mud 
 be fold, within a certain period, will depend on 
 the quantity of the whole, and the length of time 
 before others can be procured. 
 
 XIV. The circulating medium is of no advan- 
 tage to thofe porieifed of it, unlefs they employ 
 ■it, and in whatever way we conceive it employ- 
 ed, it mull ultimately go to the purchaie of 
 goods. Commodities are of no advantage to 
 thofe poMeffed of them, unlefs by giving them 
 the power over others by barter or by their fale. 
 The circulating medium, therefore, cannot be 
 held up, but with a view of purchafmg cheaper; 
 nor commodities, but to be fold dearer: but 
 whether the circulating medium (hall command 
 more goods, or goods more of the circulating 
 medium, will depend on the quantity, &c. (XII.) 
 of the former, which muft ultimately go to the 
 purchafe of goods, and the quantity, Sec. (XIII.) 
 of the latter, which muft ultimately be fold. 
 
 XV. The circulating medium may be pro- 
 duced within the fociety, or purchafed from an- 
 other. If aproduction of the fociety ferve as the 
 circulating medium, when the profits of thofe 
 employed on it are on a level with thofe in other 
 employments, the quantity of labour and ftock, 
 
 which
 
 ( 205 ) 
 
 which may be engaged with the common advan- 
 tages, can never be more than fufficient to re- 
 place the regular confumption ; that is, when 
 thofe who employ themfelves in the production 
 of commodities can command as much of the cir- 
 culating medium, by their fale, as if they had em- 
 ployed themfelves direclly in its production"*. 
 If procured from an other fociety, the advantages 
 which may be derived from its purchafe will de- 
 pend, as in the former cafe, on the value of that 
 in circulation ; that is, whether goods can com- 
 mand more of the circulating medium by being 
 difpofed of abroad than at home. 
 
 XVI. When paper is introduced into circula- 
 tion, there is a relation eftablifhed between it 
 and the medium, but not between paper and 
 commodities, and by coming into circulation, and 
 commanding goods as well as the medium, it ne- 
 ceffarily reduces its value, (XII. XIV.) If pro- 
 duced within the fociety, the employment of a 
 fmaller quantity of labour and flock will be 
 found fufheient: if procured from another, peo- 
 ple will be able to purchafe goods cheaper in 
 other countries; a quantity, therefore, will be 
 carried out, and goods carried in, or its import- 
 
 * The mines of Spain were formerly confidered fertile, and 
 many had an intereft in working them, but fince the difcovery of 
 America it has been found of greater advantage to produce com- 
 modities. 
 
 ation'
 
 ( 206 ) 
 
 ation for fome time prevented, by this redu&ion 
 in its value. Although the emiffion of paper 
 gives the command of a greater proportion of the 
 productions to certain people than they are en- 
 titled to, yet the faving which it occafions muft 
 be equal to it; this proportion cannot exceed the 
 quantity of goods, in the one cafe, carried out, 
 or which the emiffion prevents being carried 
 out; nor, in the other, the additional quantity 
 produced, in confequence of lefs labour and 
 frock being employed in the production of the 
 medium. The flock, on which the employment 
 of labour depends, is augmented nearly the 
 amount of the paper in circulation*. 
 
 XVII. When barter takes place, the revenues 
 of the three orders are reprefented immediately 
 in commodities; when a circulating medium is 
 introduced, by its quantity; and in the latter cafe, 
 as well as in the former, the quantity received 
 by the one order, will determine the quantity to 
 be given to the remaining.' — Should the rife of 
 rent, for example, be reprefented in the price of 
 the materials of manufactures, wages and profit 
 would be reduced in their nominal amount, and 
 manufactures, taken in a mafs, would fell for 
 
 * Bankers are under the neceffity of keeping a quantity of 
 fpecie on hands, which, however, cannot be, by any means, equal 
 to the amount of their paper in circulation, their advantages being 
 regulated by the difference. 
 
 precifely
 
 ( so; ) 
 precifely the fame price; but as it falls alfo on 
 the commodities immediately confumed, as pro- 
 visions, Sec. wages and profit mult be reduced, 
 partly really and nominally, by the rife of the 
 materials of manufactures, and partly really, by 
 the rife of the articles of immediate confumption; 
 that is, the quantity of money received by work- 
 men and the owners of (lock would be reduced, 
 and the price of certain articles raifed. Manu- 
 factures would fell at the fame price, (fee Chap^ 
 VII. and note.) 
 
 XVIII. The exchangeable value of every ar- 
 ticle will depend on the demand for it and its 
 quantity, not on the labour which has been em- 
 ployed in its production *. 
 
 XIX. The quantity of a commodity at market 
 will depend on the labour and ftock which have 
 been employed in its production; and the quan- 
 tity of labour and ftock employed in the produc- 
 tion of a certain commodity will depend on the 
 exchangeable value of thofe of the fame kind at 
 
 □ 
 
 * There is a great demand for water, but it bears fcarcely 
 any exchangeable value, becaufe fo eafily procured. The ex- 
 changeable value of provifions, in a town befieged, is not regu- 
 lated by the labour and ftock which had been employed in their 
 production, nor of commodities when circumftances make it ne- 
 ccflary to difpofe of a greater quantity than for which there is 
 a demand.
 
 ( 208 ) 
 
 market*. The quantity and fpecies of commo- 
 dities at market will confequentlv be of he kind 
 for which there is a demand, if this remains with- 
 out any deviation from its ordinary com fe. 
 
 XX. Demand may be defined the ability and 
 with to exchange one commodity for another, 
 which exchange may be made either by barter or 
 a circulating medium. Whatever, therefore, be 
 the quantity of production, there' will be a de- 
 mand for the whole, provided it is of the right 
 fpecies. 
 
 XXL In order that a fociety fhall advance in 
 population and wealth, great wages mult be given 
 to the lower orders, which fuppofes ceconomy 
 amonglt the others, and the employment of flock 
 and labour in agriculture and the ufeful manu- 
 factures; from great wa»es arifes an increafe in 
 the population, and from the increaled popu- 
 lation a greater production. The increafe of 
 ftock always going before and always followed by 
 an increafe of people ; for as no increafe of peo- 
 ple can take place, unlefs preceded by an in* 
 creafe of flock ; fo no further increafe of (lock 
 can take place, unlefs followed by that of people. 
 
 XXII. The productions ariling from the in- 
 creafed population enters the hands of the own- 
 
 * The rent of land and taxes acts by railing the exchangeable 
 value of commodities, without determining a greater quantity of 
 labour and (lock to their production. 
 
 l ers
 
 ( 20 9 ) 
 
 ers of (lock, in place of thofe which had been 
 advanced as wages, rent, and for their own con- 
 fumption, and what remains, after again advanc- 
 ing rent and the ordinary wages to the fame 
 number of workmen, is profit; part of which may- 
 be confumed, part give employment to the addi- 
 tional number of workmen, which always follows 
 high wages, and part may go to the augmentation 
 of mercantile flock. 

 
 ERRATA. 
 
 Page 5 line $ forms read we — p. 8 1. i for divions read div'ifoms. 
 
 p. 21, 1. 3 for are read is — p. 38, 1. 2 3,/>devided read divided — 
 p. 38,1. 29,/orcder>Worder--p. 39,1. 6, for greater read cheaper 
 p. 52, 1. 1 8,for degrees read degree — p. 56, 1. 2 zfor manufacturers 
 ?W manufacturer — p. 61 , 1. lJ,for flock jvWihock — p. 69, 1. 9, 
 
 for hope readahoye — p. 70, 1. 7, /or ! read} — p. 75,1. 3>/o>" "bread 
 the — p. 76, 1. ifor the quantity be read be the quantity — p. 78,1. 
 23,/sr fuffer little read fuffer a little — p. 79, 1. 28, for ftock and 
 in read ftock in — p. 89,1. z\,for retain n^reftrain — p. 97, 1. 15, 
 
 for the value of read of the value of — p. 106, 1. 25, for at prefent 
 wererWat prefent known were — ibid. 1. 2 3, for of gold and iilver 
 read of the gold and filver — p. 1 15, 1. 8, for refeft read refpecl — 
 p. ii6,1. zgfcr convenience read conveniences — p, 11 8,1. 11 for 
 of 25 millions read 25 millions — ibid. 1. 29, /or mine read mines — ■ 
 p. I2i,l. l, for circumftance nWcircumftances — p. 127, 1. i.fcr 
 manufacturer's read manufacturer — ibid. 1. 24, for this read his — 
 ibid. 27 for remain the precifely read remain precifely — p. 1 3 8 1. 5, 
 
 for employments read employment — p. 1 43 , 1. \for land read lands 
 p. 146,1. 28,/.;- manufacturers read manufactures — p. 147, 1. 18, 
 
 for of it itfelf read of itfelf — p. 158,1. 1 8, for moft read more — 
 ibid I. 1 zfor the mw' thus— p. 167,1. 19/w numbers ran/number 
 p. i68,l. 17,/or has rad' have — bid. 1.2 5, for is gainer read is the 
 gainer — p. 171, 1. 27 far of the labourer read of labour — p. 174, 
 »• 5, for as a read as of a — p. 178, 1. 9, for is not nW are not — 
 p. 189, 1. z, for may read mvLiX — p. 208, 1. 27, for acts read ai\*