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 LIBRARY 
 
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 INQUIRY 
 
 INTO THE 
 
 NATURE AND ORIGIN 
 
 OF 
 
 f^uftlte aajealtl). 
 
 AND INTO THE 
 
 MEANS AND CAUSES OF ITS INCREASE. 
 
 THE EARL OF LAUDERDALE. 
 
 SECOND EDITION, GREATLY ENLARGED. 
 
 EDINBURGH: 
 
 PRINTED FOR ARCHIBALD CONSTABLE & CO. EDINBURGH 
 
 L0NG3IAN, HURST, RE ES, ORME, AND BROWN, 
 AND HURST, ROBINSON, AND C03IPANY, LONDON. 
 
 IS if).
 
 
 
 TO 
 
 HIS ROYAL HIGHNESS 
 
 THE PRINCE OF WALES. 
 
 SIR, 
 
 If gratitude for kindness uniform- 
 ly shown me, did not point out 
 your Royal Highness as the Per- 
 son to whom I ouo'ht to inscribe 
 any little effort of my industry; 
 the anxious zeal which constantly 
 animates your Royal Highness's 
 breast, for the welfare of a People 
 amongst whom, fortunately for 
 the British Empire, you hold a 
 station so illustrious and pre-emi- 
 nent, would naturally suggest your 
 
 Royal Highness, as the Person un- 
 
 i 
 
 35934?
 
 C iv ] 
 
 der whose Protection a Work ought 
 to be placed, the object of which 
 is to elucidate the elementary prin- 
 ciples of a science, on which the 
 Happiness as well as the Wealth 
 of mankind depends. 
 
 I am, with the highest sense of 
 duty, and most profound feeling of 
 respect, 
 
 SIR, 
 
 Your Royal Highness's 
 Much obliged, 
 And most humble servant, 
 LAUDERDALE. 
 
 January 1804..
 
 CONTENTS. 
 
 Introduction, - - - Page 1 
 
 Chap. I. 
 
 Of Value and the possibility of an accu- 
 rate Measure of Value, - _ 10 
 
 Chap. IL 
 
 Of Public Wealthy of Individual Riches, 
 and the relation they bear to each other, 37 
 
 Chap. III. 
 Of the Sources of Wealth, - - 108 
 
 Chap. IV. 
 
 Of Parsimony, as a Means of increas- 
 ing Wealth, - - - - 198 
 
 Chap. V. 
 
 Of the Means of Augmenting Wealth, and 
 the Causes that regulate its Increase, 269 
 
 Appendix, - - _ _ _ 357
 
 ADVERTISEMENT. 
 
 It is now nearly fourteen years since the 
 publication of the First Edition of this In- 
 quiry ; and, though the author is perfectly 
 aware, that some of his speculatiohs w^ere 
 then unfavourably received, he has, after 
 a careful review of the opinions it con*, 
 tains, seen nothing essential he could wish 
 to alter. 
 
 In the rectitude of most of his doctrines,^ 
 he is indeed confirmed, — not only by the" 
 approbation with which they hayebeen 
 distinguished in France, in Germany, in 
 Italy, and America, — but, because he peijJ* 
 ceives, that many of the opinions wWch, 
 
 b
 
 Vlll ADVERTISEMENT. 
 
 in this country, at iirst excited doubt and 
 hesitation, have gradually gained ground to 
 such a degree, that, in most recent publica- 
 tions, they are assumed as indisputed and 
 incontrovertible. 
 
 Labour is now no longer regarded as a 
 measure of value ; — it is, on the contrary, 
 admitted, that nothing can possess the cha^ 
 racter of forming, at all times, and in all 
 places, an accurate measure of value. 
 
 The distinction betwixt productive and 
 unproductive labour, — as founded on the 
 produce of labour being immediately con- 
 sumed, or reserved for future use, — is ex- 
 ploded. 
 
 The origin and nature of the profit of 
 capital is now universally understood : it 
 is, by all, admitted, that capital derives its 
 profits, either from supplanting a portion 
 of labour which would otherwise be per- 
 formed by the hand of man ; — or, from its 
 performing a portion of labour which is be-
 
 ADVtRTISEMENT. IX 
 
 yond the reach of the personal exertion of 
 man to accomplish. 
 
 Parsimony has ceased to be regarded as 
 the most active means of increasing pubhc 
 wealth ; — and, though the author's opinions 
 on this subject were formerly stated to be 
 the most unmeasured and prejudiced of all 
 his speculations, the greatest advocates for 
 the system of forcing parsimony by legis- 
 lative authority, in the shape of a sinking 
 fund, now agree to the necessity of limit- 
 ing the extent to which it ought to be car- 
 ried. Hitherto, indeed, we have had no 
 experience of the effects of the Sinking 
 Fund, when not counteracted by borrow- 
 ing to a greater extent : — yet there are 
 many who admit the consequences, as stat- 
 ed in the Inquiry, of withdrawing such a 
 portion of revenue from expenditure in 
 consumable commodities, and forcibly con- 
 verting it into capital. 
 
 The reader will, therefore, find, in this 
 Edition of the Inquiry, no change in the
 
 X ADVERTISEMENT. 
 
 doctrines it contained. The Author cer- 
 tainly has made great alterations ; but these 
 are confined to the objectSAof giving a more 
 distinct view^of the effects of parsimony on 
 public wealth, and of extending the illus- 
 trations of the various opinions he has §i*b- 
 mitted to the public on the Science of Po- 
 litical Economy. 
 
 July 1818.
 
 INTRODUCTION. 
 
 Though language, from which proceeds 
 the power of both recording and communi- 
 cating our ideas, must be deemed the prin- 
 cipal source of improvement m man ; yet 
 it has been suggested,* that he, " who con- 
 " siders the errors and obscurity, the mis- 
 
 " takes and confusion, that are spread in 
 
 " the world by an ill use of words, will find 
 " some reason to doubt whether language, 
 " as it has been employed, has contributed 
 " more to the improvement or hinderance 
 " of knowledge:" and in truth, notwith- 
 standing all the benefits we derive from it, 
 it is certain that the careless and impi'oper 
 use of language often produces much mis- 
 conception, even in the ordinary occur- 
 rences of life. 
 
 * Locke on the Human Understanding, B. III. Ch. xi 
 sect. 4.
 
 2 mXRODUCTION. 
 
 In all discussions, therefore, where accu- 
 racy is required, we cannot be too cautious 
 in adopting terms of art, or technical forms 
 of expression, without inquiring into the 
 justness of that node of reasoning from 
 which they have derived their origin. 
 
 Words have been represented, and indeed 
 are usually considered, as the transcript of 
 those ideas which are in the minds of men. 
 
 Thus, when we find a phrase in general 
 use, we are apt to regard it as conveying 
 the common testimony of mankind in fa- 
 vour of that species of reasoning which at 
 first sight appears to have suggested it; and 
 adopt, from a suppossed idea of authority, 
 opinions, which a little examination would 
 make us reject. By such carelessness, men 
 often become habituated to the common use 
 of phrases and expressions, without having 
 even called in question their propriety ; and 
 these, forming the basis of further reasoning, 
 gave birth to ideas founded on a series of 
 misconceptions, and consequently to new 
 phrases and turns of expression that tend 
 to perpetuate fallacies. It is by these means
 
 INTRODUCTION. 
 
 that language has, in all sciences, been often 
 found a most powerful supporter of preju- 
 dice, and a most active promoter of error. 
 
 Speculation in Political Economy una- 
 voidably leads to this train of reflection ; 
 for there is no science so much exposed to 
 this source of error. The subjects of many 
 of the sciences, originating in the concep- 
 tions of the learned, are never treated of but 
 by men of superior education and improv- 
 ed minds, whose language must of course 
 partake of the arm racy of their ideas. 
 But Public Economy, which professes to 
 teach the means of increasing the wealth 
 of a State, and of applying it to the most 
 useful proposes, is of necessity, in all stages 
 of society, a subject of discussion, even 
 amongst the most vulgar and illiterate, 
 whose rude and erroneous conceptions must 
 naturally lead to expressions founded on 
 inaccuracy, and pregnant with error. 
 
 A strong illustration of the effect which 
 language has upon the tenor of econo- 
 mical reasoning, may be derived from con- 
 sidering the mercantile system of political
 
 4 INTRODUCTION. 
 
 economy, so long prevalent, which taught 
 us to estimate the progress of our wealth 
 by the Balance of our Trade. 
 
 If the balance of trade was to have been 
 rested upon as a means of ascertaining the 
 increase of opulence, one would have na- 
 turally thought, that the manner in which 
 the merchant makes up his account of pro- 
 fit and loss, would have suggested itself as 
 the method of estimating the national gain 
 by foreign trade. 
 
 Thus, as Davenant observes, we would 
 have been led to examine how much the 
 returns imported are worth more than the 
 commodities exported; and attributed to the 
 nation so much gain as the value of the 
 Imports exceeded that of the Exports. 
 
 But Money being, in its capacity of an 
 instrument of commerce, the immediate 
 means of procuring all the conveniences 
 of life; whilst, as the practical measure of 
 value, we are accustomed to estimate com- 
 modities by the quantity of money they will 
 exchange for; Money and Wealth came to 
 be used, not only in common language, as
 
 INTRODUCTION. 
 
 synonymous; but, in the ideas of men, to 
 get money became expressive of the only 
 means of growing rich. 
 
 Habituated to this misapplication of lan- 
 guage, and to the ideas they derive from 
 it, the supporters of the mercantile system, 
 making up the accounts of the public in a 
 manner directly the reverse of that they 
 would have followed in making up their 
 own, rejoiced at the excess of the Exports 
 over the Imports; concluding, that the dif- 
 ference must be received in Money, and 
 conceiving that the commodities exported, 
 were merely valuable as instruments to pro- 
 cure Money, which they alone regarded 
 as wealth. 
 
 Though the prevalence of the mercan- 
 tile system, for above a century, and many 
 consequent errors in the reasonings of our 
 economical writers, as well as in the system 
 of European legislation, all arising out of 
 the habit of conceiving Wealth and Money 
 to be synonymous, form powerful illustra- 
 tions of the effects of language in pro- 
 ducing erroneous ideas in economical rea-
 
 O INTRODUCTION. 
 
 sonings; it is perhaps not the most fatal 
 error introduced into the science of politi- 
 cal economy by the same means. 
 
 The terms we use, in talking of the 
 wealth of a nation, or of the riches of in- 
 dividuals, are in all languages exactly the 
 same. They denote, that private riches are 
 universally considered in no other light than 
 as a portion of national wealth. The sum 
 total of the riches of those who form the 
 community, is thus regarded as necessarily 
 conveying an accurate statement of the 
 wealth of a nation ; and this idea has be- 
 come so universally prevalent, that, even 
 by philosophers, exchangeable value has 
 been announced as the basis of wealth. * 
 An increase of the fortune of any mem- 
 ber of the society, if not at the expence 
 of any individual belonging to the same 
 community, is uniformly deemed an aug- 
 mentation of national wealth ; and a dimi- 
 nution of any man's property, if not pro- 
 ducing an increase of the riches of some of 
 
 * See Physiocratie, Philosophic Rurale, and the works of 
 all the Economists.
 
 INTRODUCTION. 7 
 
 his fellow-subjects, has been considered as 
 of necessity occasioning a concomitant di- 
 minution of national wealth: "For," says an 
 eminent philosopher, " the capital of a so- 
 " ciety, which is the same thing with that 
 " of all the individuals who compose it, 
 " can be increased only in the same man- 
 «' ner."* 
 
 That public wealth, however, ought not 
 to be considered as merely representing 
 the sum of individual riches, is undoubt- 
 ed ;t and that much of obscurity, and 
 
 * Smith's Wealth of Nations, Vol. I. p. 410, edit, in 4to.— 
 To the same purpose says Hecato the Rhodian, as represent* 
 ed by Cicero : ". Sapientis esse, nihil contra mores, leges, in- 
 " stituta facientem, hahere rationem rei familiaris ; neque 
 " enim solum nobis divites esse volumus, sed liberis, propin- 
 *' quis, amicis, maximeque reipublicae: singulorum enim fa- 
 " cultates et copiae, divitice sunt civitatis." De OflF. L. iii. 
 C.15. 
 
 \ The Avords Wealth and Riches are, in common language, 
 used as synonymous. There is no term by which we can de- 
 sign the Wealth of a Community, which is not equally appli- 
 cable to the Riches of Individuals. In treating of private for- 
 tune, however, the word riches will be uniformly used ; and in 
 expressing public opulence, the word wealth. To be more dis- 
 tinct, Private or Individual will be generally prefixed to Riches, 
 and Public to Wealth.
 
 8 INTRODUCTION. 
 
 even of error, has existed in economical 
 reasoning from confounding them, will be 
 made apparent. 
 
 As a clear understanding of the rela^ 
 tion which Public Wealth and Individual 
 Riches bear to each other, appears of the 
 highest importance, in securing accuracy 
 in every subject that relates to the science 
 of Political Economy ; the first and se- 
 cond chapters of this Inquiry are there- 
 fore devoted to the consideration of the 
 nature of Value, the possession of which 
 alone qualifies any thing to form a portion 
 of individual riches ; — to an explanation of 
 what Public Wealth is, and of what consti- 
 tutes Individual Riches ; — and to an exa- 
 mination of the relation in which they 
 stand to each other. 
 
 The meaning annexed in this work to the 
 phrase Public Wealth being thus explained, 
 the third chapter contains an investigation 
 of the Sources of Wealth, in which Land, 
 Labour, and Capital, are separately treated 
 of as the sources of wealth ^ — an opinion 
 which, though it has been announced by
 
 INTRODUCTION. 9 
 
 some, and hinted at by others, does not 
 seem to have made on any other author so 
 strong an impression as to be uniformly 
 adhered to in the course of his reason- 
 ings. 
 
 An idea which has generally prevailed, 
 (though it seems in itself a paradox,) that 
 wealth may be increased by means by 
 which it is not produced, in particular by 
 parsimony, or deprivation of expenditure, 
 has made it necessary to investigate this 
 subject in the fourth chapter, as a prelimi- 
 nary to an Inquiry into the Means and 
 Causes of the Increase of Wealth ; which 
 is the object of the fifth chapter.
 
 CHAP. 1. 
 
 OF VALUE, AND THE POSSIBILITY OF AN ACCU- 
 RATE MEASURE OF VALUE. 
 
 Before proceeding to consider what con- 
 stitutes public wealth and private riches, or 
 to investigate the circumstances which lead 
 to the increase of either, it is necessary to 
 understand distinctly the nature of Value ; 
 and, by that means, to possess a clear idea 
 of what it is which alone can give to any 
 commodity the character it must acquire, 
 in order to form a part of individual 
 riches. 
 
 The term Value ^ whatever might have 
 been its original sense, as it is used in com- 
 mon language, does not express a quality
 
 OF VALUE. 1 1 
 
 inherent in any commodity. There is no- 
 thing which possesses a real, intrinsic, or in- 
 variable value. The possession of no qua- 
 lity, however important to the welfare of 
 man, can confer value ; for water, the 
 most necessary oi all things, seldom pos- 
 sesses it. 
 
 Experience shews us, that every thing is 
 uniformly considered as valuable, which, 
 to the possession of qualities that make it 
 the object of the desire of man, adds the 
 circumstance of existing in scarcitv. To 
 confer value, therefore, two things appear 
 requisite : 1. That the commodity, as being 
 useful or delightful to man, should be an 
 object of his desire ; 2. That it should ex- 
 ist in a degree of scarcity. 
 
 With respect to the variations in value, 
 of which every thing valuable is suscep- 
 tible, if we could for a moment suppose 
 that any substance possessed intrinsic and 
 fixed value, so as to render an assumed 
 quantity of it constantly, under all circum- 
 stances, of equal value ; then the degree of 
 value of all things, ascertained by such a
 
 12 OF VALUE. 
 
 fixed standard, would vary according to the 
 proportion betwixt the quantity of them 
 and the demand for them, and every com- 
 modity would, of course, be subject to a 
 variation in its value from four different 
 circumstances. 
 
 1. It would be subject to an increase of 
 its value, from a diminution of its quanti- 
 
 ty- 
 
 2. To a diminution of its value, from an 
 augmentation of its quantity. 
 
 3. It might suffer an augmentation in 
 its value, from the circumstance of an in- 
 creased demand. 
 
 4. Its value might be diminished, by a 
 failure of demand. 
 
 As it will, however, clearly appear, that 
 no commodity can possess fixed and intrin- 
 sic value, so as to qualify it for a measure 
 of the value of other commodities, man- 
 kind are reduced to select, as a practical 
 measure of value, that which appears the 
 least liable to any of these four sources of 
 variation, which are the sole causes of alter- 
 ation of value.
 
 ©F VALUE. 13 
 
 When in common language, therefore, we 
 express the value of any commodity, it may 
 vary at one period from what it is at ano- 
 ther, in consequence of eight different con- 
 tingencies. 
 
 1. From the fom* circumstances above 
 stated, in relation to the commodity of 
 which we mean to express the value. And, 
 
 2. From the same four circumstances, in 
 relation to the commodity we have adopt- 
 ed as a measure of value. 
 
 As the value, therefore, of all commodi- 
 ties depends upon the possession of a qua- 
 lity that makes them the object of man's 
 desire, and the circumstance of their exist- 
 ing in a certain degree of scarcity ; it fol- 
 lows that the variation of all value must de- 
 pend upon the alteration of the proportion 
 betwixt the demand for, and the quantity 
 of, the commodity, occasioned by the oc- 
 currence of one of the four circumstances 
 above stated ; and that a variation in the ex- 
 pression of value, may be occasioned by the 
 occurrence of any of the eight circum- 
 stances we have alluded to. The truth of
 
 14 OF VALUE. 
 
 these propositions may be variously illus- 
 trated. 
 
 Water, it has been observed, is one of 
 the things most useful to man, yet it sel- 
 dom possesses any value ; and the reason of 
 this is evident : it rarely occurs, that to its 
 quality of utility is added the circumstance 
 of existing in scarcity ; but if, in the course 
 of a siege, or a sea-voyage, it becomes 
 scarce, it instantly acquires value ; and its 
 value is subject to the same rule of varia- 
 tion as that of other commodities. 
 
 Gold is nowhere to be found in abun- 
 dance ; but scarcity alone cannot give it 
 value, any more than utility alone can con- 
 fer value on water. We are accordingly 
 told, that the poor inhabitants of Cuba and 
 St Domingo, when first discovered by the 
 Spaniards, not knowing the use of gold, 
 considered it as little bits of pebble, just 
 worth the picking up, but not worth the 
 refusing to anybody that asked it ; and 
 that they in reality gave it to their new 
 guests at the first request. * But the know- 
 
 * Wea'lh of Nations, Vol. I, p. 219, 4to edit.
 
 OF VALUE. 15 
 
 ledge of its utility by the Spaniards, and 
 its possessing therefore quaUties, that to 
 them made it an object of desire, added to 
 the circumstance of its scarcity, soon gave 
 it value ; and the degree of its value came 
 speedily to be fixed, even in the minds of 
 the natives, on the same principle as that 
 of food, and of all other commodities. 
 
 Though the scarcity of gold and silver, 
 and the demand for them, have made them 
 what is called most precious, that is, under 
 the general circumstances of mankind, com- 
 modities of the greatest value ; yet parti- 
 cular circumstances may occasion such a 
 scarcity of, and demand for, things of a very 
 ordinary nature, as to make them for a time 
 of a value superior even to those metals. 
 Thus, as Mr Locke well observes, in a man 
 of war, silver may not be of equal value to 
 gunpowder, and a famine may certainly 
 occasion gold's not being worth its weight 
 in bran. 
 
 The value of every thing is so complete- 
 ly dependent upon the proportion betwixt 
 the demand for it and the quantity of it.
 
 16 OF VALUE. 
 
 that the possession of no quahty, whatever 
 excellence it might add to a commodity, 
 could produce any material alteration in 
 its value, if it did not affect either the de- 
 mand for it, or the quantity of it. Suppo- 
 sing there could be conferred on Corn, the 
 important attribute, that one grain, when 
 given to an infant on the day of its birth, 
 should secure a century of robust health ; 
 (though it is certain there could not be add- 
 ed to it a qualification more to the general 
 taste of mankind,) yet, as this would pro- 
 duce no alteration in the quantity of grain, 
 and, from the small quantity that would be 
 thus consumed, hardly any perceptible in- 
 crease in the demand for it, we should not be 
 able to discern any variation in its value. 
 
 So little has the quality of things to do 
 with their value, that it very often hap- 
 pens, when a commodity possesses, in the 
 highest degree of perfection, all the quali- 
 ties which make it desirable, its value is 
 the lowest ; and when, on the contrary, it 
 possesses them in a very inferior degree, its
 
 OF VALUE. 17 
 
 value is the highest. This is almost con- 
 stantly the case with Grain. In a fine sea- 
 son it is always of a superior, in a bad sea- 
 son of an inferior quality ; yet, as the fine 
 season generally produces an increased, and 
 a bad season a diminished quantity; with a 
 thorough contempt of the quality, the va- 
 lue of the corn is always regulated on the 
 principle here stated ; and the greatness of 
 the quantity, though of a superior quality, 
 reduces its value ; whilst the diminution of 
 its quantity, though of very inferior qua- 
 lity, increases the value in the market. 
 
 The value of Cattle, though the recom- 
 mendations with regard to breed, fatness, 
 and every other quality that renders them 
 desirable, and even the number of them 
 should remain unaltered, is always found to 
 vary in proportion to the scarcity or abun- 
 dance of the food on which they are nou- 
 rished. The value of certain inferior species 
 ©f grain is also often increased, without 
 any alteration either of the quantity or 
 quality of it, but merely in consequence of 
 an augmentation of demand, arising from a
 
 18 OF VALUE. 
 
 scarcity of the better sorts of grain, which 
 usually form the bread of the community. 
 
 We have often occasion to observe that, 
 whilst a web of cloth or a piece of silk have 
 sold at very considerable prices, if there re- 
 mains a small quantity of them, this Rem- 
 nant, as it is called, brings a very inferior 
 price to what was given for the greater part 
 of the same cloth, and of the same piece of 
 silk. On the other hand, a small quantity of 
 stock, in the 3 or 4: per cents,is uniformly sold 
 in the Alley above the market-price of the 
 commodity ; and yet the small pieces of silk 
 and cloth are of the same quality with the 
 whole of the respective webs, and the stock 
 is exactly productive of the same advanta- 
 ges with any other portion of stock ; the va- 
 riations depending, in these cases, totally 
 upon alterations in the degree of demand ; 
 there being few people who wish for so 
 small a piece of cloth, and many who, in 
 consequence of wills and trusts, are obliged 
 to purchase smaller portions of stock for 
 accumulation than are usually exposed in 
 the market.
 
 OF VALUE. 19 
 
 Thus we may perceive, that the existence 
 of value is perfectly independent of any in- 
 herent characteristic in the commodity it- 
 self; that there is no such thing as intrinsic 
 value ; and that alterations in the degrees of 
 value are not dependent upon any change 
 of quality, but always on some change of 
 proportion betwixt the quantity and the 
 demand for a commodity ; — a sure proof of 
 which is, that we cannot express value, or 
 a variation of value, without a comparison 
 of two commodities; and every variation in 
 the expression of value, must depend upon 
 some alteration in the proportion betwixt 
 the quantity of and demand for, one or 
 other of the commodities compared. 
 
 For example, if the price of grain is to 
 be expressed in silver, it might vary, in con- 
 sequence of the circumstance of the altera- 
 tion of the proportion betwixt the quantity 
 of the grain and the demand for it ; it might 
 also alter, in consequence of the variation 
 betwixt the proportion of silver and the de- 
 mand for it. It may happen, too, that al- 
 terations might take place in both those
 
 20 OF VALUE. 
 
 proportions ; which must likewise generally 
 produce a variation in the expression of va- 
 lue. For though it is possible that there 
 should exist alterations in both, and that 
 the relative proportion betwixt the quanti- 
 ty and demand for each should still be 
 preserved, yet it is highly improbable, that, 
 uhder such circumstances, this equilibrium 
 should be maintained. 
 
 The opinions, that are here stated, con- 
 cerning the nature and the causes of the 
 variation of value, are nowise new. They 
 have been hinted at by many; and by some 
 they have been long ago explained with 
 tolerable accuracy.* Ihey do not, how- 
 
 ♦ The following extract, from Mr Law's Treatise on 
 Money, published in Scotland in 1705, seems to convey an 
 accurate idea of the nature of value. " Mr Locke says, '* the 
 " value of goods is according to their quantity, in proportion 
 ** to their vent. The vent of goods cannot be greater than the 
 ** quantity, but the demand may be greater. If the quantity 
 " of wine brought from France be 100 ton, and the demand 
 " be for 500 ton, the demand is greater than the vent, and the 
 <* 100 ton will sell at a higher price than if the demand were 
 *' only equal to the vent; so the prices of goods are not ac- 
 " cording to the quantity in proportion to the vent, but in pro. 
 " portion to the demaad."
 
 OF VALUE. 21 
 
 ever, appear to have been so clearly under- 
 stood as to destroy the idea of any thing 
 possessing a real and fixed value, so as to 
 qualify it to form a measure of value. Af- 
 ter this philosopher's stone many have 
 been in search ; and not a few, distinguish- 
 ed for their knowledge and their talents, 
 have imagined that in Labour they had 
 discovered what constituted a real measure 
 of value. Of this fancy Sir William 
 Petty's mind seems to have been fully 
 possessed, when he composed the follow- 
 ing passage :* *' Suppose a man could, 
 " with his own hands, plant a certain scope 
 " of land with corn ; that is, could dig or 
 " plough, harrow, reap, carry home, thresh, 
 " and winnow, so much as the husbandry 
 " of this land requires, and liad withal seed 
 " wherewith to sow the same. I say, that 
 " when this man hath subducted his seed 
 " out of the proceed of his harvest, and 
 " also what himself hath both eaten and 
 
 * Treatise of Taxes and Constitutions, p. 23, I'to edit, 
 1667.
 
 22 OF VALUE. 
 
 " given to others in exchange for clothes, 
 " and other natural necessaries, that the 
 " remainder of corn is the natural and true 
 *^ rent of the land for that year; and the 
 *' medium of seven years, or rather of so 
 " many years as make up the cycle, with- 
 ^« in which dearths and plenties make their 
 " revolution, doth give the ordinary rent 
 ^« of the land in corn. 
 
 " But a further, though collateral que- 
 *« stion may be. How much English money 
 " this corn or rent is worth ? I answer, so 
 « much as the money which another single 
 <' man can save within the same time, over 
 " and above his expence, if he employed 
 " himself wholly to produce and make it ; 
 " viz. Let another man go travel into a 
 " country where is silver, there dig it, re- 
 " fine it, bring it to the same place where 
 <* the other man planted his corn, coin it, 
 " &c. ; the same person, all the while of 
 " his working for silver, gathering also food 
 " for his necessary livelihood, and procur- 
 " ing himself covering, &c. I say the sil-
 
 OF VALUE. ^23 
 
 " ver of the one must be esteemed of equal 
 " value with the corn of the other." 
 
 The same idea is stated by Mr Harris, 
 in his ingenious Essay on Money and Coins : 
 " The values of land and labour do, as it 
 " were of themselves, mutually settle or 
 * adjust one another; and as all things or 
 ** commodities are the products of those 
 " two, so their several values are naturally 
 " adjusted by them. But, as in most pro- 
 " ductions, labour hath the greatest share, 
 " the value of labour is to be reckoned the 
 ** chief standard that regulates the value of 
 " all commodities; and more especially, as 
 " the value of land is, as it were, already 
 *^ allowed for in the value of labour itself" 
 
 The Author of the Inquiry into the 
 Wealth of Nations, is, however, the person 
 who has struggled most to establish the 
 opinion, that labour may be considered as 
 an accurate measure of value ; and Baron 
 Hertzberg, who, in his Discourse on the 
 Wealth of Nations, has declared that it is 
 admirably proved in the profound and 
 classical work of Dr Smith, that labour is
 
 24 OF VALUE. 
 
 the true, universal and exact measure of 
 the value of all goods and merchandise, is 
 not the only distinguished disciple who has 
 maintained this doctrine. 
 
 That this opinion is unfounded, is never- 
 theless apparent from the circumstance, that 
 value cannot be expressed but by a compari- 
 son of two commodities : whereas it is evi- 
 dent, if there existed any thing qualified to 
 form a measure of value, that degrees of 
 value could be denoted by different por- 
 tions of such a commodity, without the 
 necessity of any comparison. 
 
 Indeed, it is the effect, that the belief in 
 the existence of an accurate measure of 
 value must have in destroying all just idea 
 of the nature of value, and the authority 
 of those who have held this doctrine, ra- 
 ther than the ingenuity or even plausibility 
 of the manner in which it is supported, 
 that makes it worthy of consideration. 
 
 To those who understand any thing of 
 the nature of value, or on what its varia- 
 tions depend, the existence of a perfect 
 measure of value must at once appear im-
 
 OF VALUE, Its 
 
 possible : for as nothing can be a real mea- 
 sure of magnitude and quantity, which is 
 subject to variations in its own dimensions, 
 so nothing can be a real measure of the 
 value of other commodities, which is con-^ 
 stantly varying in its own value. But as 
 there is nothing which is not subject to 
 variations, both in its quantity and in the 
 demand for it, there can be nothing which 
 is not subject to alteration in value. 
 
 In the learned work, however, alluded 
 to, the author, without descending to any 
 reasoning, qualifies labour for sustaining 
 the character of a measure of value, by de* 
 daring, that " labour alone never varies in 
 " its own value."* And this appears more 
 extraordinary, because labour is the thing 
 most subject to variation in its value, and 
 is of course, of all others that could have 
 been selected, the worst calculated to per- 
 form that duty. 
 
 As, however, nothing else has ever been 
 held out as constituting an accurate mea- 
 sure of value ; and as the opinion still has 
 
 * Wealth of Nations, Vol. I. p. 38. 4to edit.
 
 ^6 OF VALUE. 
 
 its advocates, that labour is such, though 
 completely destructive of every correct 
 view of the nature of value, it is perhaps 
 worth while, in order to extinguish the 
 idea of the possibility of its forming an ac- 
 curate measure of value, shortly to prove 
 that, of all things, it is the least qualified 
 for this task, by references to what seems 
 the least suspicious authority, — opinions 
 delivered in that very work, which de- 
 clares labour to possess fixed and invari- 
 able value ; and which has been affirmed 
 to contain substantial proof that labour is 
 a real measure of value. 
 
 Things may alter in their value : 
 
 1. At periods not remote ; as for exam- 
 ple, of the same year. 
 
 2. At remote periods of time, 
 
 3. In different countries. 
 
 4. In different parts of the same coun- 
 try. 
 
 These may be generally considered as 
 the four cases which give rise to alterations 
 in the value of all commodities ; for, gene- 
 rally speaking, there is nothing subject to
 
 Ot VALUE. 27 
 
 variation of value at the same time, and in 
 the same place. Labour, however, it will 
 appear, in the opinion of the learned au- 
 thor, who styles it the sole thing invariable 
 in its value, is subject not only to all the 
 usual sources of variation, but possesses ex- 
 clusively the characteristic of varying at the 
 same time and place. 
 
 1. That labour varies in its value at dif- 
 ferent periods of the same year, every per- 
 son must know, who has observed, that 
 " the demand for country labour is greater 
 " at hay-time and harvest, than during the 
 " greater part of the year : and wages rise 
 " with the demand. In time of war, when 
 " forty or fifty thousand sailors are forced 
 " from the merchant service into that of 
 " the King, the demand for sailors to mer- 
 " chant ships necessarily rises with their 
 ** scarcity, and their wages, upon such oc- 
 " casions, commonly rise from a guinea 
 " and seven and twenty shillings, to forty 
 " shillings and three pounds a month *.'* 
 
 ♦ Wealth of Nations, Vol. I. p. 140, 4to edit.
 
 28 OF VALUE. 
 
 2. That labour varies in its value at dis- 
 tant and remote periods of time, seems 
 established by the following facts : " The 
 " real recompence of labour, the real quan- 
 " tity of the necessaries and conveniences 
 " of life which it can procure to the la- 
 " bourer, has, during the course of the 
 " present century, increased perhaps in a 
 *^ still greater proportion than its money- 
 " price '^ * 
 
 And, again, " The money-price of labour 
 " in Great Britain has indeed risen during 
 " the course of the present century. This 
 ^^ however, seems to be the effect, not so 
 " much of any diminution in the value of 
 *' silver in the European market, as of an 
 " increase of the demand for labour in Great 
 *' Britain, arising from the great, and al- 
 " most universal, prosperity of the coun- 
 
 " try." t 
 
 3. The comparison made betwixt Eng- 
 land and America, shows clearly the dif- 
 ference that takes place in the value of 
 
 * Wealth of Nations, Vol. I. p. 0^, 4to edit. 
 f Ibid, Vol. I. p. 251, 4toedit.
 
 OF VALUE. 29 
 
 labour in distant and remote countries: 
 *' England is certainly, in the present times, 
 " a much richer country than any part of 
 " North America. The wages of labour, 
 " however, are much higher in North 
 ** America than in any part of England. 
 " In the province of New York, common 
 " labourers earn three shilhngs and six- 
 " pence currency, equal to two shilhngs 
 " Sterling a day ; ship-carpenters ten shil- 
 *' lings and sixpence currency, with a pint 
 " of rum, worth sixpence Sterling, equal in 
 " all to six shillings and sixpence Sterling ; 
 " house-carpenters and brick-layers eight 
 " shillings currency, equal to four shillings 
 " and sixpence Sterling j journeymen tailors 
 " five shillings currency, equal to about two 
 " shillings and tenpence Sterling. These 
 " prices are all above the London price ; 
 '* and wages are said to be as high in the 
 ** other colonies as in New York. The 
 " price of provisions is every where, in 
 " North America, much lower than in 
 " England. A dearth has never been 
 ** known there. In the worst seasons,
 
 80 OP VALUE. 
 
 <* they have always had a sufficiency for 
 " themselves, though less for exportation. 
 " If the money-price of labour, therefore, 
 ** be higher than it is any where in the 
 " mother country, its real price, the real 
 " command of the necessaries and con- 
 " veniencies of life which it conveys to 
 " the labourer, must be higher in a still 
 ** greater proportion." * Further, " Labour 
 " in America is so well rewarded, that a 
 " numerous family of children, instead 
 " of being a burden, is a source of opu- 
 " lence and prosperity to the parents. 
 " The labour of each child, before it can 
 " leave their house, is computed to be 
 " worth L. 100 clear gain to them. A 
 " young widow, with four or fi\e young 
 " children, who among the middUng or 
 ** inferior ranks of people jn Europe, 
 " would have so little chance for a second 
 ** husband, is there frequently courted as 
 ^* a sort of fortune." f 
 
 • Wealth of Nations, Vol. I. p. 85. 4to edit. 
 f Ibid. Vol. I. p. 65. 4to edit.
 
 OF VALUE. 31 
 
 4. The following facts not only shew the 
 extraordinary variations in the value of la- 
 bour, that take place in different parts of 
 the same country; but the ingenious rea- 
 soning, which accompanies it, points out 
 why these variations on the value of labour 
 must be more permanent than in any other 
 commodity. " Eighteen pence a day may 
 " be reckoned the common price of labour 
 " in London and its neighbourhood. At a 
 " few miles distance it falls to fourteen and 
 " fifteen pence. Ten pence may be rec- 
 •* koned its price in Edinburgh and its 
 " neighbourhood. At a few miles distance 
 " it falls to eight pence, the usual price of 
 ** common labour through the greater part 
 *« of the low country of Scotland, where it 
 " varies a good deal less than in England. 
 " Such a difference of prices, which it 
 " seems is not always sufficient to trans- 
 " port a man from one parish to another, 
 " would necessarily occasion so great a 
 " transportation of the most bulky commo- 
 *' dities, not only from one parish to ano- 
 ** ther, but from one end of the kingdom.
 
 S2 OF VALUE. 
 
 ^' almost from one end of the world, to the 
 " other, as would soon reduce them . more 
 " nearly to a level. After all that has been 
 " said of the levity and inconstancy of hu- 
 " man nature, it appears evidently from 
 " experience that a man is of all sorts of 
 <« luggage the most difficult to be transport- 
 « ed."* 
 
 Thus labour seems to partake of those 
 four sources of variation, which are the 
 general reasons of alteration in the value 
 of all commodities. But this is not all : 
 for this pretended accurate measure of 
 value is not capable even, like other com- 
 modities, of forming a true measure of 
 value at the same time and place ; which 
 is evident, when we recollect, that, '* at 
 " the same time and place, the real and the 
 " nominal price of all commodities are ex- 
 " actly in proportion to one another. The 
 " more or less money you get for any com- 
 " modity, in the London market, for ex- 
 " ample, the more ot less labour it will at 
 
 * Wealth of Nations, Vol. I. p. 91. 4to edit.
 
 OF VALUE. S3 
 
 " that time or place enable you to purchase 
 " or command. At the same time and place, 
 " therefore, money is the exact measure of 
 " the real exchangeable value of all com- 
 " modities." * Whereas, on the other 
 hand, it must be observed, that the value 
 of labour " cannot be ascertained very ac- 
 " curately any where, different prices be- 
 " ing often paid at the same place, and for 
 " the same sort of labour, not only accord- 
 " ing to the different abilities of the work- 
 " men, but according to the easiness or 
 " hardness of the masters, f 
 
 Now, the variation here pointed out must 
 be in the real value of labour, and not in 
 that of the money by which we express its 
 value ; because money, at tlie same time and 
 place, forming an exact measure of the ex- 
 changeable value of all commodities, can- 
 not, under such circumstances, vary in its 
 own valu' . 
 
 It is, indeed, most extraordinary, that 
 
 * Wealth of Nations, Vol. I. p. 44. 4to edit, 
 t Ibid. Vol. I. p. 94. 
 
 C
 
 OP VALUE. 
 
 the author of the Wealth of Nations should 
 ever have considered labour as an accu- 
 rate measure of value ; for in Book II. 
 Chap. iii. of his work, he treats of pro- 
 ductive and unproductive labour, and there- 
 in announces an opinion, which forms one 
 of the most striking features of his theory, 
 that a great portion or description of la- 
 bour is totally unproductive : yet it is evi- 
 dent, that a proposition, holding forth a 
 mathematical point as a measure of dimen- 
 sion, would not be more absurd than pro- 
 posing any thing unproductive as a mea- 
 sure of value. 
 
 To avoid this apparent contradiction, it 
 has been supposed, that the characteristic 
 of beino: a measure of value was meant to 
 be confined to that species of labour which 
 the author, throughout his work, has cal- 
 led productive labour : but in stating even 
 productive labour to be a measure of value, 
 he must for the moment have forgot the 
 subject of his first book, which treats of 
 the improvement of the productive powers 
 of labour as the effect of the division of 
 labour.
 
 OF VALUE. 35 
 
 For if, according to the theory there de- 
 tailed, the productive powers, that is, the 
 value of labour, is continually improving, 
 and exists in different states of improve- 
 ment, in proportion as it is subdivided, 
 with what consistency can it be said, that 
 labour, supposing it to be limited to pro- 
 ductive labour, " never varies in its own 
 " value, and forms the ultimate and real 
 " standard by which the value of all com- 
 *' modities can, at all times and places, be 
 " estimated and compared ?" 
 
 Great, therefore, as the authorities are 
 who have regarded labour as a measure of 
 value, and who by so doing have contradict- 
 ed that view of the nature of value which 
 has been here given, it does not appear 
 that labour forms any exception to the ge- 
 neral rule, that nothing possesses real, fixed 
 or intrinsic value; or that there is any sohd 
 reason for doubting the two general prin- 
 ciples we have endeavoured to establish : — 
 
 1. That things are alone valuable in con- 
 sequence of their uniting qualities, which 
 make them the objects of man's desire, witli
 
 36 OF VALUE. 
 
 the circumstance of existing in a certain 
 degree of scarcity. 
 
 2. That the degree of value which every 
 commodity possesses, depends upon the 
 proportion betwixt the quantity of it and 
 the demand for it.
 
 CHAP. II. 
 
 OF PUBLIC WEALTH, OF INDIVIDUAL RICHES, 
 AND OF THE RELATION THEY BEAR TO EACH 
 OTHER. 
 
 Though the advantages which all reason- 
 ings on Pohtical Economy must have de- 
 rived from a clear explanation of what 
 constitutes national or public wealth ar^ 
 apparent; and though a precise understand- 
 ing of what wealth is, seems a necessary 
 preliminary to the discussing, with any de- 
 gree of accuracy, the means of increasing 
 it ; we must regret, that a definition of 
 Public Wealth is no where to be found. 
 This deficiency, however, does not appear 
 to have proceeded so much from any sense 
 of difficulty in defining national wealth, or 
 in describing wherein it is conceived to con- 
 sist, as from a general feeling of its being
 
 88 OF PUBLIC WEALTH, AND 
 
 needless to express that about which all men 
 are agreed. For the theories and opinions 
 of all speculative writers sufficiently shew, 
 that they have entertained, on this subject, 
 the same ideas with those who, in the exer- 
 cise of the practice of taxation, have been 
 obliged to express their opinions more dis- 
 tinctly. » 
 
 The capital of a society has been re- 
 garded, in every respect, as the same with 
 that of all the individuals who compose 
 it ; * and the sum-total of the fortunes 
 of individuals, has been conceived to con- 
 vey an accurate description of the mass of 
 national wealth. Parsimony, which expe- 
 rience teaches us is the most usual means 
 of increasing private fortune, is universally 
 represented as the parent of public wealth. 
 Frugality is said to increase, prodigality to 
 diminish, the public capital, f Every pro- 
 digal is represented as a public enemy, and 
 every frugal man as a public benefactor. :|: 
 
 * Wealth of Nations, Vol. 1. p. 409, 4to edit, 
 f Wealth of Nations, A'ol. I. p. 421, 4to edit. 
 X Ibid, Vol. I. p. 414.
 
 OF INDIVIDUAL RICHES. 39 
 
 So much, indeed, is public wealth univer- 
 sally deemed the same thing with the mass 
 of private riches, that there appears no 
 means of increasing the fortune of an indi- 
 vidual, when it is not done directly at the 
 expence of another, that is not regarded as 
 productive of national opulence. 
 
 On this principle have proceeded the va- 
 rious statenlents of national wealth, which 
 have at different times been submitted to 
 the public. Thus, by Sir William Petty's 
 computation, in the year 1664, the total 
 wealth of the nation, consisting of lands, 
 houses, shipping, gold and silver coin, wares, 
 merchandise, plate, furniture, &c. amount- 
 ed to two hundred and fifty millions. In 
 the beginning of the eighteenth century, 
 Gregory King computed the landed and 
 personal property at six hundred and fif- 
 teen millions. - Mr Hooke computed the 
 whole value of real and personal property, 
 about fifty years ago, at two thousand one 
 hundred millions sterling. Sir William Pul- 
 teney, about thirty years after, valued the 
 landed and personal property at two thou-
 
 40 OF PUBLIC WEALTH, AND 
 
 sand millions. The total amount of the 
 wealth of Great Britain, consisting of the 
 value of articles above enumerated, has 
 also been computed by Dr Beeke, to be 
 nearly two thousand five hundred millions 
 sterling, exclusive of one hundred millions 
 sterling, the value of foreign possessions be- 
 longing to the subjects of Great Britain. * 
 
 * The principles on which these calculations of naLional 
 wealth proceed, are fully explained in the 90th paragraph of 
 Turgot's work, entitled, Reflexions sur la formation et la dis- 
 tribution des Ruhesses. — " § 90. La Richesse totale d'une na- 
 " tion eat compusee, 1° du revenu net de torn les bkns fonds 
 " multiplie par le taux du prix des terres ; 2" de la somme de 
 *' toutes les richesses mobilieres existantes dans la nation. 
 
 " Les bjens-fond equivalent a u^'. capital egal a leur reveiiu 
 " annuel, multiplie par le denier courant, auquel les terres sc 
 *' vendent, Ainsi si Ton additionnoit le revenu de toutes les 
 *• terres, c'est-a-dire, le revenu not qu'elles rcndcnt aux pro- 
 " prietaires et a tous ceux qui en partagent la propriety, com- 
 " me le seigneur qui per^oii une rente, le cure, qui pergoit la 
 " dixnu , le souverain,qui pergoit I'impot: si, dis-je, additionnoit 
 " toutes ces soaimes ct qu'on les multipliat par le taux au- 
 ** quel se vendent les terres, on auroit la somme des richesses 
 " d'une nation en biens-fonds. Pour avoir la totalile des ri- 
 '' chesses d'une nation, il faut y joindre les richesses inobili- 
 ** frfs, qui consistent dans la somme des capitaux employes 
 *' dans toutes les enterprises de culture, d'industrie, et de com- 
 «* merce, et qui n'cn sortent jamais, toutes lesavances en toute 
 " i>xun- d'enlf rprise devant sans cesse rentrer aux entiepre- 
 '' neur><, pour etre sans cesse reveisees dans I'enterprise, qui 
 *' sans ccla ne pourroit etre continuec."
 
 OF INDIVIDUAL RICHES. 4l 
 
 It is, however, impossible to subscribe to 
 the idea, that the sum-total of individual 
 riches forms an accurate statement of pub- 
 lic wealth. Though the opinion has been 
 universally prevalent, it must be deemed 
 false and unfounded by every man who 
 considers the subject, after having formed, 
 and familiarized himself to, an accurate and 
 distinct opinion of the nature of value. 
 
 It must, then, appear, that a commo- 
 dity being useful or delightful to man, can- 
 not alone give it value ; that to obtain value, 
 or to be (qualified to constitute a portion of 
 private riches, it must combine with that 
 quality, the circumstance of existing in a 
 certain degree of scarcity. Yet the com- 
 mon sense of mankind would revolt at a 
 proposal for augmenting wealth by creatino- 
 a scarcity of any commodity generally use- 
 ful and necessary to man. For example, 
 let us suppose a country possessing abun- 
 dance of the necessaries and conveniences 
 of life, and universally accommodated with 
 the purest streams of water: — what opi- 
 nion would be entertained of the under-
 
 42 OF PUBLIC WEALTH, AND 
 
 standing of a man, who, as the means of 
 increasing the wealth of such a country, 
 should propose to create a scarcity of 
 water, the abundance of which was deserv- 
 edly considered as one of the greatest 
 blessings incident to the community ? It is 
 certain, however, that such a projector 
 would, by this means, succeed in increasing 
 the mass of individual riches ; for to the 
 water, which would still retain the quality 
 of being useful and desirable, he would add 
 the circumstance of existing in scarcity, 
 which of course must confer upon it value ; 
 and, when it once obtained value, the same 
 circumstances that fix the value of its 
 produce for a certain number of years, 
 as the price of the possession of land which 
 produces food, would equally fix the value 
 of the produce of springs for a certain num- 
 ber of years, as the price of the possession 
 of that which produced drink; and thus 
 the individual riches of the country would 
 be increased, in a sum equal to the value of 
 the fee-simple of all the wells. 
 
 But further to illustrate this proposition,
 
 of INDIVIDUAL RiCHfiS. 48 
 
 that public wealth, and the mass of in- 
 dividual riches, cannot be regarded as in 
 every respect the same, let us for a mo- 
 ment suppose it possible to create as great 
 an abundance of any species of food as 
 there exists of water : what would be 
 thought of the advice of a man, who should 
 cautiously recommend, even at the moment 
 of the pressure of scarcity, to beware of 
 creating this boasted abundance ? for, how- 
 ever flattering it might appear as a reme- 
 dy for the immediate evil, it would inevita- 
 bly diminish the wealth of the society. 
 Yet ridiculous as this opinion might ap- 
 pear, as every thing, which partakes of the 
 abundance of water or air, must at once 
 cease to possess value ; it follows that, by 
 occasioning such an abundance, the sum- 
 total of individual riches would most cer- 
 tainly be diminished, to an extent equal to 
 the total value of that species of food, whose 
 value would by this means be destroyed. 
 
 When we reflect on the situation of this 
 country, it appears, indeed, almost self-evi- 
 dent, that the sum-total of individual riches
 
 4i OF PUBLIC WEALTH, AND 
 
 cannot be considered as affording an accu- 
 rate statement of public wealth. 
 
 At present the capital of the national 
 debt amounts nearly to five hundred mil- 
 lions. We have seen, and know, that war, 
 even in the course of the first year, may sink 
 the value of this capital twenty per cent, ; 
 that is, that it may diminish the mass of in^ 
 dividual fortunes one hundred millions; and 
 thus impose upon any man, who made up 
 the account of public wealth, on the prin- 
 ciple that an accurate statement of it was 
 to be derived from adding together the 
 fortunes of individuals, the necessity of 
 saying, that one hundred millions of our 
 wealth had vanished. 
 
 But this is not all. The value of many 
 things sinks at the same time. In the 
 value of land, in particular, we have 
 seen a considerable diminution, which 
 would create the necessity of a further re- 
 duction in this statement of public wealth. 
 Yet the surface of the national territory 
 remains unaltered; the landlord receives 
 the same rent ; the stockholder is paid
 
 OF INDIVIDUAL RICHES* 45 
 
 the same interest ; and there is no one 
 thing, on which a man can lay his hand 
 as an article of national wealth, which 
 does not appear to retain the same quali- 
 ties that rendered it either useful or de- 
 sirable, and to be in every respect un- 
 altered. 
 
 It seems, therefore, apparent, that an 
 increase in the mass of individual riches 
 does not necessarily increase the wealth of 
 the community ; that it is possible to 
 imagine a very important increase of public 
 wealth, which must diminish the mass of 
 individual riches ; and that the practice of 
 considering the sum-total of individual 
 riches, as calculated to convey an accurate 
 idea of the wealth of a society, must be 
 regarded as erroneous.* > 
 
 Indeed, a little further consideration 
 
 * The following passage from the Abbe Morellet's Prospec- 
 tus de nouveau Dictionnaire du Commerce, page 204, shews 
 that he must have felt the distinction, though he had not, at 
 that time, formed a distinct idea of the data on which the 
 wealth of a community ought to be calculated. 
 
 " Puisque les richesses sont I'objet du commerce, et en ge- 
 *• n6ral de leconomie politique, on voit que le tableau du cora- 
 ** merce de chaque etat devoit presenter I'enumeration de ses
 
 46 OF PUBLIC WEALTH, AND 
 
 makes it evident, that, if we could suppose 
 Nature to bestow on any community, or 
 Art to procure for them, such an abun- 
 dance, that every individual should find 
 himself in possession of whatever his ap- 
 petites could want, or his imagination wish 
 or desire, they would possess the greatest 
 possible degree of wealth ; though, under 
 such circumstances, it is impossible that 
 any commodity could obtain the attribute 
 of value : for, like water and air, all com- 
 modities, that partake of their abundance, 
 must at once be divested of value, or of the 
 possibility of constituting any part of indivi- 
 dual riches. The inhabitants of a country 
 thus abounding in all that man can desire, 
 
 " richesses. Mais cette enumeration paroit avoir de grandes 
 ** difficultes. On ne connoit pas bien les elemens de cette 
 ** espece de calcul, etl'on ignore peutetre encore I'art d'em- 
 " ployer ceux qu'on a." 
 
 The principles on which the calculation of the wealth of a 
 community ought to proceed, are as evident as it is clear, that 
 the sum-total of individual riches must give a fallacious repre- 
 sentation of public wealth. The sum-total of individual rich- 
 es, can convey only the value of all things belonging to the 
 community, that have value in exchange. The wealth of a 
 country, on the contrary, consists in the abundance of what 
 is useful or delightful to man.
 
 OF INDIVIDUAL RICHES. 47 
 
 would, without the possibility of possessing 
 riches, enjoy all the wealth and comforts 
 which the largest fortunes can secure. Di- 
 minish this supposed abundance, it is ob- 
 vious you will impoverish the community ; 
 but you will, by such diminution, infallibly 
 confer value on the commodities used or 
 desired by man, and, of course, create indi- 
 vidual riches. Subsequent, however, to 
 this diminution, which occasions the exist- 
 ence of riches, those who remain possessed 
 even of the largest fortunes, cannot enjoy 
 a greater quantity of the objects of their 
 desire, than the community at large possess- 
 ed, in that supposed state of society where 
 abundance precluded the existence of va- 
 lue, and, of course, the possibihty of indi- 
 vidual riches. * 
 
 Important as this distinction, which we 
 have endeavoured to establish, between the 
 
 * Though the opinions entertained by the economists lead 
 them uniformly to confound Wealth and Riches, it bein^ their 
 l)v'\ncip\e,fjuelavaleurvenole est ta base de to-ufe ric/iesse,(juc son ac- 
 croissement ett accroisement de ric/i£Sses,[Vhi\osoyhieRurdlt,r).60. 
 " That value in exchange is the basis of wealth, and that the 
 '* increase of price is an increase of wealth ;" yet there are pas- 
 sages in their writings, which evidently shew, that the dis- 
 tinction betwixt wealth and riches had occXirred to them ; for
 
 48 OF PUBLIC WEALTH, AND 
 
 wealth of a nation, and the sum-total of the 
 riches of individuals, will afterwards appear 
 to be, in regulating our opinions on every 
 
 example : " It is necessary to distinguish wealth from riches. 
 " The former possesses value in use, but no value in exchange. 
 " The latter possesses a value both in use and exchange. It is 
 *' not sufficient for a nation to possess wealth ; it is necessary 
 *' it should endeavour to procure great riches, in order to ad- 
 " minister, by means of commerce, to the desires of all the 
 " members of which it is composed." Physiocratie, p. cxviii. 
 (For the original see Appendix, No. I.) 
 
 The same distinction is alluded to in Child's Discourse oh 
 Trade, as well as in other works on that subject. 
 
 " I shall conclude with two or three requests to the reader. 
 
 " 3. That in all his meditations upon these principles, he 
 " would warily distinguish between the profit of the merchant, 
 " and the gain of the kingdom, which are so far from being al- 
 " ways parallels, that frequently they run counter one to the 
 '* other, although most men, by their education and business, 
 " having fixed their eye and aim wholly upon the former, do 
 *' usually confound these two in their thoughts and discourses 
 " of trade, or else mistake the former for the latter." Preface 
 to Child's Discourse on Trade, 4th edition, p. 40. 
 
 " The state on some occasions may gain most, when private 
 *' men by their resources get least." England's Treasure by 
 Foreign Trade, p. 1 1. Glasgow edition, printed 1755. 
 
 " For all men do consent, that plenty of money in a kingdom 
 " doth make the native commodity dearer, which, as it is to the 
 " profit of some private men in their revenues, so is it directly 
 «' against the benefit of the public." lb. p. 25- 
 
 " The merchants knew perfectly well in what manner to 
 " enrich themselves^ It was their business to know it. But 
 " to know in what manner it enriched the country, was no 
 " part of their business." Wealth of Nations, Vol. II. p. S^ 
 4to edit.
 
 OF INDIVIDUAL RICHES. 
 
 49 
 
 question relating to the science of Political 
 Economy; it is perhaps still more important 
 to observe, that, in proportion as the riches 
 of individuals are increased by an augmen- 
 tation of the value of any commodity, the 
 wealth of the society is generally diminish- 
 ed ; and in proportion as the mass of indi- 
 vidual riches is diminished, by the diminut 
 tion of the value of any commodity, its opu- 
 lence is generally increased. 
 
 No man can doubt that an abundance of 
 grain is a most important article of wealth. 
 As little can it be doubted, that a scarcity 
 of grain is a most serious symptom of po- 
 verty ; yet we are told, by great authority, ^ 
 that a defect in .the harvest will raise the 
 price of corn in the following proportions : 
 
 Defect. - 
 
 1. Tenth, 
 
 2. Tenths, 
 
 3. Tenths, 
 
 4. Tenths, 
 
 5. Tenths, 
 
 o 
 
 a 
 
 f 
 
 >^< 
 
 CD 
 
 Above the common rate. 
 
 3.Tenths. 
 
 8. Tenths. 
 
 1.6 Tenths. 
 
 2.8 Tenths. 
 
 4.5 Tenthsr 
 
 * Grei;ury Kmi^'b Calculation, [jublishcl by Davcnant, Vol. 
 J I. p. 224. 
 
 D
 
 50 OF PUBLIC WEALTH, AND 
 
 According to this opinion, therefore, a 
 deficiency of three-tenths of the common 
 produce of the country in grain, would in- 
 crease the value of the grain that remained 
 1 60 per cent. ; that is, suppose the usual 
 produce of any country to be 300 quarters 
 of grain, and the total value of that grain to 
 be L. 300 ; if the grain was reduced three- 
 tenths in quantity, viz. to 210 quarters, 
 then the value of these 210 quarters would 
 be L. 546. Thus the wealth of the com- 
 munity being diminished by the loss of 
 three-tenths of the whole of its produce of 
 grain, the value of its grain would thereby 
 be increased from L. 300 to L. 546 ; and 
 there would, by that means, be added to 
 the mass of individual riches, a sum nearly 
 equal to the value which the whole grain 
 of the country bore when no such scarcity 
 existed. 
 
 On the other hand, it is conjectured by 
 authority equally respectable, * that the 
 production of one-tenth part more grain 
 
 * See Spectator, No. 200.
 
 OF INDIVIDUAL RICHES. 51 
 
 than is usually consumed, would diminish 
 the value of the grain one-half; that is, 
 that if the produce of a country was 300 
 quarters, and its general value L. 300, if 
 the wealth of the society should be increas- 
 ed by the production of 30 more quarters 
 of grain, then the mass of individual riches 
 would be diminished L. 135, as the value 
 of the 330 quarters, at 10s. a quarter, would 
 only amount to L. 165 ; whereas the value 
 of the 300 quarters, before the produce was 
 increased, at 20s. a quarter, amounted to 
 L. 300. * 
 
 * That the diminution of the quantity has the effect of 
 raising the value for which the total of any commodity sells at 
 the market; and the increase, the effect of diminishing it; is 
 an observation made by many writers, though they disagree 
 about the ratio in which it is increased and diminished. Thus^ 
 " Merchants observe, that if the commodity in market is di- 
 " minished one-third beneath its mean quantity, it will be 
 *' nearly dt)ubk'd in value; and that if it is augmented one- 
 " third above its mean quantity, it will sink near one-half in 
 " its value ; and that, by further diminishing or augmenting 
 *' the quantity these disproportions between the quantity and 
 " prices vastly increase." Considerations on the Policy of 
 Entails, by Sir John Dalrymple, p. 14. 
 
 " People who understand Trade, will readily agree with me, 
 " that the tenth part of a commodity in a market, more thait 
 " there is a brisk demand for, is apt to lower the market, per-
 
 52 OF PUBLIC WEALTH, AND 
 
 So truly is this principle understood by 
 those whose interest leads them io take ad- 
 vantage of it, that nothing but the impos- 
 sibility of general combination protects the 
 public wealth against the rapacity of pri- 
 vate avarice ; for, wherever combination 
 has been possible, mankind have found, in 
 the diminution of their wealth, the fatal 
 eifects of this disposition. It is on this 
 principle, that the Dutch were said to burn 
 a considerable quantity of spiceries, when- 
 ever mankind was favoured with a fertile 
 season ; and that they gave to the natives 
 of the several islands premiums for collect- 
 ing the young blossoms and green leaves 
 
 " haps 20 or 30 per coif., and that a deficiency of a tenth part 
 '' will cause us exorbitant an advance." Speech without 
 Doors, addressed to the National Creditors, 1737, p- 13. 
 
 " Another circumstance appears to have escaped the notice 
 '* of the memorialists, namely, that, in proportion as the quan- 
 " tity of goods increases, the price or value will diminish.'' 
 
 " The week following the arrival of the Ganges, the com- 
 '' pany's raw silk was sold, but for L. 20,000 less than what 
 ** the silk would have sold for, if the ship had not arrived, 
 " and it has frequently happened, that the company have sus- 
 " tained immense losses, in consequence of ofl'ering to sale a 
 " very small quantity of goods, more than what the demand 
 " required." Memorial for the East India Company to the 
 Trcasurv.
 
 OP INDIVIDUAL RICHES. 5S 
 
 of the nutmeg trees, by which means they 
 destroyed them. It was a similar motive 
 that, in the year 1731, induced the pro- 
 prietors of the old vineyards in France, to 
 solicit an order in Council, which they ob- 
 tained, prohibiting both the planting of 
 new vineyards, and the renewal of those 
 old ones, of which the cultivation had been 
 interrupted for two years, without a parti- 
 cular permission from the King, to be 
 granted only in consequence of information 
 from the Intendant of the province, certi- 
 fying that he had examined the land, and 
 that it was incapable of any other culture. 
 The same idea Jed the tobacco-planters in 
 Virginia to pass an act of Assembly, by 
 which they restrained the cidtivation of 
 tobacco to 6000 plants for every negro 
 kept ; and afterwards induced them to 
 agree, in plentiful years, to burn a certain 
 proportion of tobacco for every negro. 
 
 Further to illustrate this doctrine, let us 
 suppose a country whose annual produc- 
 tions, that is, whose revenue, amounted in 
 value to fifty thousand pounds, in which, 
 when all the various articles produced
 
 54' OF PUBLIC WEALTH, AND 
 
 bore their usual proportions to one another, 
 the grain was in quantity twenty thousand 
 quarters, and in value twenty thousand 
 pounds, and, of course, the value of the 
 other commodities thirty thousand. 
 
 Let us also suppose, that the mar- 
 ket price of all things producing reve- 
 nue should, on an average, be twenty-five 
 years' purchase of the value of the reve- 
 nue produced ; of course, the total wealth 
 of such a country, estimated in the method 
 Mr King and others have pursued, would 
 amount to twelve hundred and fifty thou- 
 sand pounds. 
 
 If, in such a country, thei'e was a sudden 
 diminution of production, to the extent of 
 one half of the usual quantity of grain, it 
 would, according to Davenant, add five- 
 tenths to the value of the grain in the mar- 
 ket, * there would therefore exist ten thou- 
 sand quarters of grain, the value of which 
 would be fifty-five thousand pounds. 
 
 That, under these circumstances, the 
 grain could not be acquired by giving other 
 
 * Davenanl's Wcrk , Vol. II. p. 224. 
 7
 
 OF INDIVIDUAL RICHES. 55 
 
 articles of production in exchange for it. 
 is manifest, because the hypothesis as- 
 sumes, that all the other commodities pro- 
 duced were onlj worth thirty thousand 
 pounds, and many parts of tiiem must, of 
 course, be exchanged by the consumers ior 
 one another. 
 
 Such an unfortunate situation must 
 therefore involve the necessity of part of 
 the produce in grain being paid for by 
 the consumers, giving in exchange for 
 things produced a proportion of what may 
 be called capital, in the general sense of the 
 word, as opposed to revenue. 
 
 It is needless to enter into any minute 
 calculation, of wdiat would be the probable 
 amount in value of the capital that would, 
 under such circumstances, be transferred 
 to the growers of grain, in payment of 
 their commodity, over and above their 
 usual share of the other annual produc- 
 tions. Let us suppose that it might be 
 equal in value to thirty thousand pounds ; 
 though most probably it would be more, 
 from the circumstance that an augmenta-
 
 56 OF PUBLIC WEALTH, AND 
 
 tion in the value of grain must occasion 
 such a diminution in demand for all other 
 articles, as would infinitely lower their 
 value. 
 
 On this supposition, the value of the 
 whole production would amount to eighty 
 thousand pounds ; composed of filty thou- 
 sand, being the augmented value of grain, 
 and twenty-five, the reduced value of all 
 other commodities. 
 
 But if the withdrawing ten thousand 
 quarters of grain from the annual produc- 
 tion, might add thirty thousand pounds to 
 the value of these productions, this in- 
 creased revenue, estimated as formerly at 
 twenty-five years' purchase, would make 
 the sum of national wealth amount to two 
 millions : an apparent augmentation of 
 seven hundred and fifty thousand, pro- 
 duced by a diminution of the quantity of 
 grain, and, of course, of the aggregate of 
 commodities, in which public wealth un- 
 doubtedly consists. 
 
 From these considerations, it seems evi- 
 dent, not only that the sum-total of indivi-
 
 OF INDIVIDUAL RICHES. 57 
 
 dual riches cannot be considered as an ac- 
 curate description or definition of the 
 wealth of any community ; but that, on 
 the contrary, it may b& generally affirmed, 
 that an increase of riches, wlien arising 
 from alterations in the quantity of commo- 
 dities, is always a proof of an immediate 
 diminution of wealth ; and a diminution 
 of riches,^ is evidence of an immediate in- 
 crease of wealth : and this proposition will 
 be found invariably true, with the excep- 
 tion of a single case, which will be after- 
 wards explained. Thus, it becomes ne- 
 cessary to adopt a definition of Public 
 Wealth, which conveys a different idea of 
 it from that which has been generally re- 
 ceived ; and it is therefore submitted, that 
 Wealth may be accurately defined, — to 
 consist of all that man desires^ as useful or 
 delightful to him, * 
 
 * III the Projet d'une dixme Royale, published in the name 
 of the Marechal De Vauban, and generally conceived to be 
 his work, (thoui^h Voltaire, in his Doutes sur le testament: 
 du Cardinal de Richelieu, says it was written by M. de Bois 
 Guilbeit,) Wealth is nearly accurately defined in the fol- 
 lowing terms : ♦' La vrai richesse d'un Royaume consist^ dans
 
 58 1)F PUBLIC WEALTH, AND 
 
 But if Public Wealth is truly and rightly 
 defined, to consist of all that man desires 
 as useful and delightful to him ; as (from 
 the explanation that has been already given 
 of the nature of value, or of the circum- 
 stances that entitle any thing to the cha- 
 racter which qualifies it for forming a por- 
 tion of individual riches) we know, that, 
 by adding the circumstance of scarcity to 
 the qualities which make any commodity 
 a component part of public wealth, we 
 should give it value, and thus qualify it to 
 form a portion of individual riches, it fol- 
 lows, that individual riches may be defined, 
 -^/o consist of all that man desires as useful 
 or delightful to him ; which exists in a degree 
 of scarcity. 
 
 With regard to the degree in which any 
 commodity is to be classed as forming a 
 portion of individual riches, it has already 
 been explained and made evident, that the 
 value of every thing depends upon the pro- 
 portion betwixt the demand for it, and the 
 
 " I'abondance dcs denrees.'^ " The true wealth of a nation 
 " consists in the abundance of its commodities."
 
 OF INDIVIDUAL RICHES. 59 
 
 quantity of it. But distinctly to understand 
 the nature of individual riches, and the 
 changes and variations of which they are 
 susceptible, it will be necessary to examine 
 into the alterations of value which the va- 
 riation of that proportion, in any one com- 
 modity, may create in the general mass of 
 individual riches. 
 
 The value of every commodity, it has 
 been observed, may be altered : 
 
 1. By a diminution in its quantity; 
 
 2. By an increase in its quantity ; 
 
 3. By an increase of demand ; 
 
 4. By a diminution of demand. 
 
 And, to explain this subject thoroughly, 
 each of these cases must be considered in 
 its order, as well as the effects which they 
 are likely to produce, not only on the com- 
 modity itself in relation to which they oc- 
 cur, but subsequently with a view to the 
 effects which they indirectly produce upon 
 the value of all other commodities, which 
 form portions of individual riches.
 
 60 OF PUBLIC WEALTH, AND 
 
 1. Of the Effects of the Diminution of the 
 Quantity of any Co?mnodify on the Value 
 of that Commodity. 
 
 On first consideration, it naturally oc- 
 curs, that if the members of a society had 
 devoted a portion of then' respective riches 
 for the acquisition of any given commodi- 
 ty, and a sudden scarcity had occasioned 
 the existence of only half of the usual 
 quantity of that commodity, the same por- 
 tion of other goods, remaining applicable 
 to the acquisition of the half which had 
 antecedently been employed in acquiring 
 the whole, the value of any quantity of it 
 would be doubled. 
 
 For example : if one thousand pound 
 w^eioht formed the ordinary consumption of 
 su,<T^ar in any society, and L. 50 represented 
 the value of those commodities which the 
 different members of the society allotted 
 to give in exchange foi sugar, sugar would 
 then be at one shilHng a pound ; because one 
 
 pound is a thousandth part of one thousand 
 
 11
 
 OF INDIVIDUAL RICHES. 6 1 
 
 pound, and one shilling a thousandth part 
 ofL. 50. 
 
 But if the supply of sugar was diminish- 
 ed to five hundred pound weight, one 
 pound of sugar would then form the five 
 hundredth part of the whole supply ; and 
 therefore it would be natural to conclude, 
 that it would be worth two shillings a 
 pound, as that sum is the five hundredth 
 part of L. 50. 
 
 This reasoning, however, would be found 
 altogether fallacious ; for the alteration of 
 value, which the diminution of the quan- 
 tity of any commodity creates, depends 
 upon a principle totally different. 
 
 One thousand pound weight of sugar was 
 the quantity the society desired, when su- 
 gar was at the price of one shilling a pound, 
 and the quantity they were accustomed to 
 enjoy. To convey an idea of the real ef- 
 fect of diminishing at once the supply of 
 sugar to five hundred pound weight, let us 
 suppose that this society consisted of one 
 hundred families, each of whom had the 
 habit, at the time the supply amounted to
 
 62 OF PUBLIC WEALTH, AND 
 
 one thousand pound weight, of consuming 
 ten pound weight of sugar ; for the acqui- 
 sition and payment of which, each family, 
 in the distribution of the order of their ex- 
 pences, used to sacrifice of the commodities 
 they possessed the vahie often shiUings, ma- 
 kino[ of course the total value of commodi- 
 ties sacrificed to the acquisition of sugar by 
 the hundred families amount to L. 50. 
 
 Each of these families being in the habit, 
 according to this hypothesis, of consuming 
 ten pounds weight of sugar ; it must be a 
 wish natural and common to them all, to 
 continue enjoying, as nearly as possible, the 
 same quantity of that commodity to which 
 they were habituated. As the tastes of 
 men are, however, various, some must be 
 willing to sacrifice much more of their 
 other enjoyments than others, though 
 all of them will probably be willing to de- 
 prive themselves of some part of them for 
 this purpose ; it being highly improbable 
 that sugar, or any other article whose quan- 
 tity is suddenly diminished, should happen 
 to be the one, among all the numerous ob-
 
 OF INDIVIDUAL RICHES. 63 
 
 jects of their desire, the consumption of 
 which any of these families will most in- 
 cline to relinquish or abridge. 
 
 Thus, the desire for sugar, which either 
 taste or habit may hav^e created, may, in 
 some of these families, make them willinf; 
 to deprive themselves of a portion of their 
 other enjoyments equal to the value of 
 twenty shillings, rather than abridge their 
 consumption of sugar. The desire of others 
 for that article may be so great, that, ra- 
 ther than forego consuming, as nearly as 
 possible, the quantity to which they were 
 habituated, they would sacrifice thirty shil- 
 lings worth of their other enjoyments. 
 And, as there is no answering for the ef- 
 fects of taste and habit, there might exist 
 in the society men willing to sacrifice for- 
 ty shillings worth of their other enjoy- 
 ments, for the purpose of retaining, as 
 nearly as may be, the quantity of sugar to 
 which they were accustomed. 
 
 The competition that would be thus 
 created might, it is evident, raise the price 
 of sugar, in a degree far beyond what we
 
 64 OF PUBLIC WEALTH, AND 
 
 should be apt, at first sight, to expect from 
 the diminution in its quantity. Indeed, it 
 must have this effect, were it not that some 
 of the consumers of sugar, preferring the 
 enjoyment of the other things to which 
 they were habituated, might be, on this 
 account, wilHng to retrench in that article, 
 or perhaps to renounce the use of it alto- 
 gether. On this last supposition, the five 
 hundred pound weight of sugar, which, 
 in consequence of the supposed diminu- 
 tion in the quantity, would form the 
 whole supply of the market, would ulti- 
 mately be acquired by the remaining con- 
 sumers of sugar, in shares proportioned to 
 the sacrifices which each was willing to 
 make for the acquisition of it. But suppo- 
 sing the demand, created by the sacrifices 
 which all were willing to make, to be such 
 as to raise the price of every ten shil- 
 lings worth of sugar thirty shillings more 
 than formerly, then one hundred times 
 thirty shillings, making L. 150, in addi- 
 tion to the former L. 50, in all L. 200, 
 would represent the value of commodities
 
 OF INDIVIDUAL RICHES. 65 
 
 sacrificed for the acquisition of sugar ; and 
 sugar would of course be at eight shillings 
 the pound ; one pound of sugar being the 
 five hundredth part of five hundred pounds 
 weight, and eight shillings being the five 
 hundredth part of L. 200. 
 
 This hypothetical statement of the in- 
 crease in the value of sugar, which the ab- 
 stracting of one-half of the supply might oc- 
 casion, without pretending to give any ac- 
 curate notion of the precise extent to which 
 the value of the commodity w^ould be rais- 
 ed, will lead the imagination to form, 
 with greater facility, a just idea of the 
 manner in which the diminution of the 
 quantity of a commodity may affect the 
 value of it. 
 
 It is obvious, that the desire of mankind to 
 continue their usual enjoyments, must, witli 
 certainty, raise the price of every commodi- 
 ty of which the quantity is diminished : 
 this rise of value must undoubtedly, in some 
 instances, check the demand for it ; and that 
 again tends to counteract the effects the di- 
 minution of the quantity of the commo- 
 
 E
 
 66 OF PUBLIC WEALTH, AND 
 
 dity would otherwise have in raising its 
 value. The rise of value, therefore, of any 
 one commodity, in consequence of the di- 
 minution of its quantity, must be regulated 
 by the perseverance of the consumers in 
 their desire to enjoy the same quantity ; 
 which must imiversally depend on the na- 
 ture of the commoditv in which the scar- 
 city exists ; as the obstinacy in attempting 
 to acquire the same quantity of it must 
 be proportioned to the degree of inclina- 
 tion which either necessity, habit, or taste, 
 has created for it. Thus, though we have 
 known grain, meat, and other articles of 
 first necessity, in certain situations, and un- 
 der certain circumstances, rise in value 
 from one to fifty, * articles of taste or lux- 
 ury have hardly, in any instance, ever 
 been found to rise to double or triple their 
 usual value. 
 
 The diminution of quantity, therefore, 
 must raise the price of different commodi- 
 
 * See the account of the prices of grain, &c. in the siege of 
 Paris, 1590. Rapport entre l' Argent et les Denrees,\}. 44, 
 45.
 
 OF INDIVIDUAL RICHES. 67 
 
 ties in different degrees, having always a 
 niore powerful effect in proportion to the 
 degree in which the commodity itself ap- 
 pears necessary. 
 
 2. Of the Effects of the Increase of the Quan^ 
 tity of any Commodity on the Value of that 
 Commodity, 
 
 In considering the effects of the diminu- 
 tion of the quantity of any commodity on 
 its total value, it was remarked, that it na- 
 turally occurred, that if the members of 
 any society had devoted a portion of their 
 respective riches for the acquisition of that 
 commodity, and a sudden scarcity had oc^ 
 casioned the existence of only half its usual 
 quantity, the same proportion of other goods 
 remaining applicable to the acquisition of 
 the half which had antecedently been em^- 
 ployed in acquiring the whole, the value of 
 any given quantity of it would be doubled. 
 
 In like manner, in considering the ef- 
 fects of the increase of any commodi^
 
 68 OF PUBLIC WEALTH, AND 
 
 tj on the value of the commodity, we 
 are also led, at first sight, to conclude, that 
 if the quantity of any commodity should 
 be suddenly doubled, the same portion of 
 other goods remaining applicable to the ac- 
 quisition of it, which had been employed 
 before the augmentation in acquiring what 
 now constitutes one-half of the commodi- 
 ty, the value of any given portion of it 
 would be reduced one-half 
 
 This reasoning, however, would be found 
 just as fallacious, as that which was stated 
 to occur on first considering the diminu- 
 tion of the quantity of any commodity; 
 for the effects of the increase of the quan- 
 tity of a commodity, upon the value of 
 that commodity, depend also on a very 
 different principle. 
 
 To convey an idea of the real effects of 
 increasing the quantity of any commodity 
 on the value of that commodity, let us 
 again suppose a society, in which one thou- 
 sand pound weight of sugar formed the or- 
 dinary consumption ; and L. 50 represent- 
 ed the value of those commodities which
 
 OF INDH^IDUAL RICHES. 69 
 
 the growers of sugar acquired in exchange 
 for their sugar, and which, of course, they 
 were habituated to enjoy. 
 
 If, all at once, there came into the market 
 two thousand pound weight, the value of su- 
 gar by this alteration in the proportion be- 
 twixt the quantity and the demand for it, 
 would be suddenly reduced. The consumers 
 of sugar would find, that they could get the 
 quantity of that article they were habituat- 
 ed to enjoy, by sacrificing a much smaller 
 quantity of their property to the acquisi- 
 tion of it. The growers of sugar, on the 
 contrary, would discover, that they could 
 by no means procure, in exchange for su- 
 gar, the same quantity of the objects of 
 their desire ; each of them, however, na- 
 turally endeavouring to obtain the ^ame 
 things to which he was formerly habituat- 
 ed, would be induced, for that purpose, to 
 press his sugars on the consumers ; and 
 though at first, in some instances, the mar- 
 ket might be so managed, by not producing 
 too much at a time, that the reduction of 
 price might be comparatively trifling, yet
 
 •^0 OP PUBLIC WEALTH, AND 
 
 the avidity of each of the growers of sugar, 
 to obtain, in exchange for his sugar, as 
 nearly as possible, the same quantity of 
 those commodities which he was formerly 
 accustomed to enjoy, would ultimately 
 force the market, in such a manner as to 
 render the sugar, thus doubled in quantity, 
 incapable of acquiring any thing like the 
 same quantity of goods which the growers 
 of sugar formerly obtained in exchange for 
 the commodity they reared. 
 
 It is true, that this reduction of price 
 w^ould create new consumers of sugar, 
 which would, in a degree, counteract the 
 eifects of the augmentation of the quanti- 
 ty of sugar upon the value of that commo- 
 dity, in the same manner as the rise of va- 
 lue, in consequence of the diminution of 
 the quantity of a commodity, has oeen de- 
 scribed to be checked, by some of the con- 
 sumers renouncing the use of it ; and the 
 effect of increasing the quantity, in dimi- 
 nishing the value of any commodity, must 
 •undoubtedly be more or less in proportion 
 
 11
 
 OF INDIVIDUAL RICHES. 71 
 
 as the diminution of its value creates sour- 
 ces of demand. 
 
 The alteration, therefore, in the value of 
 commodities, in consequence of the in- 
 crease of the quantity of them, must de- 
 pend, in a great degree, on the nature of 
 the commodities themselves. 
 
 With respect to the necessaries of life, 
 if a peculiarly fertile season should create 
 an extraordinary abundance of them, as 
 every person must generally enjoy near- 
 ly as much of those as he can consume, 
 without which he could not exist ; there 
 is hardly a possibility of conceiving any 
 sudden source of extended demand, ca- 
 pable of counteracting the effects of the 
 abundance. But, on the value of those 
 ornaments and luxuries, which scarcity 
 has rendered precious, a proportionable 
 increase of quantity could never effect the 
 same variations : as the reduction of the 
 price of an article (which, after all, would 
 be so scarce) must increase the number of 
 candidates for it, and thus create new sour- 
 ces of demand, sufficient to absorb the ad-?
 
 72 OF PUBLIC WEALTH, AND 
 
 ditional quantity, long before its value was 
 very greatly depressed. 
 
 The increase of quantity, therefore, must 
 sink the price of different commodities in 
 different degrees, having always a more 
 powerful effect in proportion to the degree 
 in which the commodity has been consi- 
 dered necessary, and, as such, is an article 
 of general consumption. 
 
 Thus, though it appears probable, as con- 
 jectured by Sir Richard Steele, that an in- 
 crease of one-tenth more than is usually 
 consumed of grain might diminish the va- 
 lue of the grain in the country one-half; 
 yet the existence of a tenth more of dia- 
 monds, or a tenth more of gold, never 
 could have such an effect. 
 
 3. Of the Effects of an Increase of Demand 
 for any Commodity^ on the Value of that 
 Commodity, 
 
 As the value of every commodity de- 
 pends alone on the proportion betwixt the
 
 OF INDIVIDUAL RICHES. 'JS 
 
 demand for it, and the quantity of it, and as 
 similar alterations in the proportion betwixt 
 the demand and the quantity of any com- 
 modity, may be produced, either by varia- 
 tions in the quantity of it, or by variations 
 in the demand for it ; it follows, that simi- 
 lar effects must ensue, whether the variation 
 is produced by an alteration in the quanti- 
 ty of the commodity, or by an alteration 
 in the demand for it ; provided always, 
 that, in consequence of such alterations, the 
 same proportion is established betwixt the 
 demand for, and the quantity of, the com- 
 modity. 
 
 For example, let us suppose any two so- 
 cieties possessed of the same quantities of 
 all sorts of commodities, and each enjoy- 
 ing a supply of a thousand pound weight 
 of sugar, for which there existed a steady 
 and settled demand ; if, in the one country, 
 the supply of the market should be dimi- 
 nished to five hundred pound weight, it 
 is obvious, that the demand would be 
 double the quantity for which there exist- 
 ed a supply ; and if, in the other country,
 
 '}4> OP PUBLIC WEALTH, AND 
 
 tne supply continuing at one thousand 
 pounds weight, there should suddenly arise 
 a demand for two thousand pounds weight, 
 it is equally obvious, that, in this case, the 
 demand would be double the quantity for 
 which there existed a supply. The new 
 proportion, therefore, established betwixt 
 the demand and the quantity, would, in 
 either case, be exactly the same ; and, of 
 course, the value of any given quantity of 
 sugar must, in either case, undergo exactly 
 the same alteration. 
 
 If, therefore, we could suppose that there 
 was any accuracy in conjecturing, that the 
 diminution of the supply of sugar from one 
 thousand to five hundred pound weight, 
 would raise the value of sugar from one 
 shilling to eight shillings a pound, it fol- 
 lows, that sugar, if the demand was by any 
 means doubled, would also rise to eight 
 shillings a polmd ; the wliole thousand 
 pound weight would then be worth L.400 ; 
 and, of course, L. 360 worth of goods ante- 
 cedently allotted for the purchase of other 
 commodities, must be added, in conse^
 
 OF INDIVIDUAL RICHES. '^5 
 
 quence of the increased demand, to the 
 L. 50 worth, previously apphcable to llie 
 acquisition of the one thousand pounds 
 weight of sugar, when the sugar was at one 
 shiUing a pound. 
 
 In stating the effects of the diminution 
 of one- hah' of the supply of sugar, it was 
 observed, that the augmentation of the price 
 might induce some of the consumers of su- 
 gar, who preferred the full enjoyment of 
 other things, to which they were habituated, 
 to renounce, in whole or in part, the use of 
 sugar ; and that the rise in its value, by the 
 reduction in its quantity, might, in some 
 degree, receive a check from this circum- 
 stance. In like manner, when the value of 
 sugar rises in any great degree by a sudden 
 extension of demand, such as we have here 
 supposed, it is obvious that a similar check 
 to the rise of its value, will, to a certain ex- 
 tent, be given, bv some of those who were 
 habituated to enjoy sugar at one shilling a 
 pound, not choosing to sacrifice to the ac- 
 quisition of sugar so much of the other com- 
 modities they were accustomed to enjoy,
 
 76 OF PUBLIC WEALTH, AND 
 
 as becomes necessary to obtain sugar in 
 consequence of the rise in its value. 
 
 The degree, however, in which this check 
 will operate, as in the former case, must 
 depend upon the nature of the commodity 
 for which the extension of demand takes 
 place. It is obvious, that no rise in value 
 can induce men to renounce the acquisition 
 of the necessaries of life, provided any sa- 
 crifices they can make will procure them ; 
 and this check will therefore operate, just 
 in proportion to the degree of inclination 
 which either necessity, habit, or taste, had 
 created for the commodity ; that is, it will 
 be more inconsiderable, in proportion as 
 the inclination to obtain the usual quantity 
 of it is less urgent. 
 
 4. Of the Effects of Diminution of Demand 
 for any Commodity, on the Value of that 
 Commodity, 
 
 From what has been said on the three 
 cases of the variation in the value of com- 
 
 7
 
 OF INDIVIDUAL RICHES. 77 
 
 modities, which have been ah-eady consi- 
 dered, it must be at first sight clear, that as 
 this fourth, and only remaining circum- 
 stance, which can cause variation of value 
 in any commodity, again supposes an altera- 
 tion in the proportion betwixt the demand 
 for, and the quantity of, the commodity in 
 which it takes place ; it must also produce 
 effects similar to those that have already 
 been described. 
 
 If, for example, we suppose a society, 
 whose usual supply of sugar amounted to 
 one thousand pound weight, for which 
 there existed a settled and steady demand ; 
 should an alteration in the state of this so- 
 ciety all at once induce them to be satis- 
 fied with five hundred pounds weight, the 
 demand would of course be reduced one- 
 half Sugar must, therefore, become cheap- 
 er ; and the natural desire in the growers 
 of sugar to acquire, as nearly as possible, in 
 exchange for their sugars, the quantity of 
 other commodities that they were habituat- 
 ed to enjoy, would lead them to force the 
 market in such a manner, as to make the
 
 78 OF PUBLIC WEALTH, AND 
 
 one thousand pounds weight of sugar sell 
 for a sum much smaller than the L. 50, 
 which formed the value of the whole 
 thousand pound weight, when sugar was 
 at one shilling a pound. 
 
 The reduction of the value of sugar 
 might, as in the case of diminution of 
 value by augmentation of quantity, create 
 new sources of demand ; but as, in that 
 case, it was observed, that the extent of the 
 alteration of value depended upon the na- 
 ture of the commodity, the extension of 
 the quantity having always a more power- 
 ful effect in reducing the value, in propor- 
 tion to the degree in which the commodi- 
 ty has been considered necessary ; so, in 
 the present case, the alteration, which the 
 reduction of demand operates, must also 
 depend upon the nature of the commodity, 
 and will be regulated on the same prin- 
 ciple. 
 
 Before concluding this subject, it is ne- 
 cessary to remark, that though variations 
 in value, whether produced by alteration 
 of the quantity of commodities, or of the
 
 OF INDIVIDUAL RICHES. 79 
 
 demand for them, provided thej occasion 
 similar alterations in the proportion, must 
 produce the same effects upon the value of 
 any commodity, or in the degree in which 
 it forms a portion of individual riches ; yet 
 they indicate very different effects on the 
 state of public wealth : for it has already 
 been observed, that, by the diminution of 
 the quantity of a commodity, its value will 
 be increased, though public opulence is by 
 that means diminished ; and that an aug- 
 mentation of the quantity of a commodity 
 must diminish its value, though by this 
 means the opulence of the society is in- 
 creased. When, however, an increase of 
 value is produced, by an augmentation of 
 demand, or the value of any commodity is 
 reduced by a diminution of demand, the 
 public wealth of the community is, at the 
 moment of the alteration in the demand, 
 in every respect unchanged, notwithstand- 
 ing the variation which takes place in in- 
 dividual riches. 
 
 Having now explained the manner in 
 which the value of commodities, or the
 
 80 OF PUBLIC WEALTH, AND 
 
 degree in which they form a portion of 
 individual riches, is affected ; Jirst^ By a 
 diminution of the quantity of a commo- 
 dity ; secondly. By an increase in its quan- 
 tity ; thirdly, By an increase in the de- 
 mand for it ; and, fourthly, By a dimi- 
 nution of demand for it; I proceed to 
 consider, what effect the alteration in the 
 order of the expenditure (which a diminu- 
 tion or augmentation in the value of any 
 one commodity must produce) will, in each 
 of these events, occasion on the sum-total 
 of individual riches. * 
 
 1. Of the Effects of the Alteration in the Or- 
 der of Expenditure, occasioned by a Di- 
 minution in the Quantity of any Commo- 
 dity. 
 
 If, in any society, the quantity of sugar, 
 as we have already supposed, be diminished 
 from one thousand pounds weight to five 
 hundred ; should the conjecture that has 
 been made, to wit, that this might increase
 
 OF I.VDIVIDUAL RICHES. 81 
 
 the value of sugar from L. 50 to L. 200, be 
 accurate ; it would be, at first sight, natu- 
 ral to suppose, that the additional L. 150 
 worth of commodities, now applied to the 
 purchase of sugar, which used to be em- 
 ployed in the acquisition of other articles, 
 would reduce the value of those articles 
 just as much as the value of sugar was, by 
 this means, increased ; and that, therefore, 
 the sum-total of individual riches would 
 remain the same. But a little attention 
 must convince any one, after perusing the 
 remarks which have been made on the 
 consequence of alteration in demand, as 
 well as on the effects of alteration in quan- 
 tity, that this cannot be the case. 
 
 As the tastes of men, as well as their at^ 
 tachments to different habits, are various j 
 if by any means they were induced to sa- 
 crifice L. 150 worth of their other enjoy- 
 ments to the acquisition of sugar, it is pro- 
 bable that they would obtain this extra 
 sum by a diminution of consumption, more 
 or less, of every commodity which forms » 
 portion of individual riches.
 
 S2 OF PUBLIC WEALTH, AND 
 
 With a view, however, to explain the ef- 
 fects of this derangement of expenditure, 
 let us suppose that the tastes of men should 
 lead them to procure the L. 150, the ad- 
 vanced sum we have supposed to be neces- 
 sary to obtain the five hundred pounds 
 weight of sugar, by transferring to the ac- 
 quisition of sugar a part of the commodi- 
 ties which they formerly allotted to ob- 
 tain the three articles of butchers-meat, 
 wine, and mustard ; and let us further sup- 
 pose, that the consumers of sugar actually 
 withdrew L. 50 from the usual expendi- 
 ture in each of these articles. 
 
 If L. 50 worth of commodities usually 
 allotted to the purchase of butchers-meat, 
 was withdrawn from the acquisition of 
 that article, the demand for butchers- meat 
 must be diminished, and the established 
 proportions betwixt the demand for it 
 and the quantity of it, altered in such a 
 manner as to reduce its value. But we 
 have already shewn, that a diminution 
 of demand for any commodity reduces 
 the price of the whole commodity, much
 
 OF INDIVIDUAL RICHES. 83 
 
 more than the sum which rej3resents the 
 amount of the demand that is abstracted 
 from it ; and it is evident, that the natural 
 avidity in the proprietors and retailers of 
 butchers-meat, to acquire and consume the 
 usual quantities of commodities, which 
 they were accustomed to receive in ex- 
 change for this article, would (as has been 
 remarked in the case of the growers of su- 
 gar) induce them to force the market to 
 such a degree, as to render L. 50 a very in- 
 adequate representation of the total dimi- 
 nution of the value of all the butchers- 
 meat in the market, which the abstracting 
 of L. 50 worth of demand would create ; 
 for, in reality, the value of the butchers- 
 meat would be thus diminished in a much 
 larger sum. 
 
 It is obvious, too, that similar effects will 
 be produced in the diminution of the value 
 of mustard and of wine, by the supposed 
 abstraction of L. 50 worth of commodi- 
 ties, which used to be appropriated to the 
 purchase of those articles. 
 
 The eagerness of the growers and posses-
 
 8^ OF PUBLIC WEALTH, AND 
 
 sors of each of these articles, to attain as 
 nearly as possible the same quantity of 
 commodities in exchange for it, must, as in 
 every caseof diminution of demand, reduce 
 the value of the article much more than 
 the amount of the value of the demand ab- 
 stracted. The effect, however, of abstract- 
 mg L. 50 worth of demand from butchers- 
 meat, from wine, and from mustard, must 
 be very various in degree ; because, ab- 
 stracting a demand to the extent of L. 50j 
 must produce a very different effect on the 
 proportion betwixt the demand for, and 
 the quantity of each of these commodi- 
 ties. 
 
 It is plain that, whilst it might diminish 
 the demand for mustard one-half, it might 
 perhaps abstract only a fifth of the demand 
 for wine ; whereas, in the case of the but- 
 chers-meat, it might probably annihilate 
 only a twentieth or a thirtieth of the usual 
 demand : and as this would have very dif- 
 ferent effects in altering the proportion be- 
 twixt the quantity and the demand of each 
 of these articles, so it must alter, in a very
 
 OF INDIVIDUAL RICHES. 85 
 
 different ratio, the value of a given quanti- 
 ty of each ; which has already been exem- 
 plified in the calculation quoted from 
 Davenant concerning the price of corn. * 
 
 2. Of the Effects of the Alteration in the Or-^ 
 der of Expenditure, occasioned by an In- 
 crease of Demand for any Commodity » 
 
 As we already know, that an augmenta- 
 tion of demand, if it establishes similar pro- 
 portions betwixt the demand for, and the 
 value of, any commodity, must produce si- 
 milar effects upon the value of any por- 
 tion of it ; let us suppose, instead of the 
 supply of sugar being reduced from one 
 thousand pound weight to five hundred, that 
 the supply remaining the same, (to wit, 
 one thousand pound weight,) there should 
 arise a sudden demand for two thousand 
 pound weight. On this supposition, if we 
 were right in conjecturing, that sugar, by the 
 diminution of the one-half of its quantity, 
 
 * See page 54.
 
 86 OF PUBLIC WEALTH, AND 
 
 would rise to eight shillings a pound, su- 
 gar must then also rise to the same price, in 
 consequence of the increased demand ; and 
 the value of the whole one thousand pound 
 weight of sugar would of course be L. 400. 
 In this case, instead of L. 150 worth 
 of goods being abstracted from the acqui- 
 sition of other commodities, it is evi- 
 dent the consumers of sugar would be un- 
 der the necessity of abstracting L. 350 
 worth of articles, which they antecedent- 
 ly devoted to the acquisition of other en- 
 joyments ; and if we suppose their tastes, 
 in like manner, to lead them to procure 
 this sum, by curtailing their consumption 
 of butchers-meat, wine, and mustard, there 
 would be, all at once, a deficiency in the 
 ordinary demand for each of these articles 
 to the extent of the third part of this 
 L. 350; that is, to the extent of L. 116, 
 13s. 4d., which would produce a much 
 more formidable diminution in the value 
 of butchers-meat, wine, and mustard, than 
 was occasioned by abstracting L. 50 worth 
 of demand from each ; and of course im-
 
 OF INDIVIDUAL RICHES. 87 
 
 poverish, in a much greater degree, the 
 proprietors of those articles. 
 
 It is extremely important here to ob- 
 serve, that though, by this means, the mass 
 of individual riches would be much dimi- 
 nished, yet this last hypothesis proceeds 
 upon the idea, that sugar, butchers-meat, 
 wine, and mustard, should all of them 
 exist in the same quantities ; and, indeed, 
 that the state of no one commodity what- 
 ever should be altered : that is, that the 
 wealth of the nation should remain exactly 
 the same ; the diminution of individual 
 riches, being, in this instance, alone crea- 
 ted in consequence of a supposed change of 
 taste, which produces a sudden alteration in 
 the demand for one commodity. 
 
 Further, though the consequences of this 
 sudden demand for an increased quantity 
 of sugar, in reducing the value of butchers- 
 meat, wine, and mustard, of which we have 
 attempted to give a view, must have a con- 
 siderable effect on the diminution of the 
 mass of individual riches, by its operation 
 on the value of these'three articles ; its ef-
 
 S8 OP iPUBLTC WEALTH, AND 
 
 fects will not terminlite here : for the pi*o- 
 prietors of butchers-meat, wine, and mus- 
 tard, having, from the reduction of the Va- 
 lue of their property, less to bestow on 
 their different enjoyments, the demand for 
 other commodities must be by this means 
 diminished, and that, in every case, to a 
 greater degree than the amount of the sum 
 which represents the demand abstracted ; 
 for it is important always to recollect, that 
 every abstraction of demand must produce 
 a diminution in the sum-total of the value 
 of the commodity from which it is abstract- 
 ed, greater than is expressed by the sum 
 abstracted. 
 
 It is on this principle, that a great and 
 sudden alteration of demand for any com- 
 modity or class of commodities, has been 
 always found to produce a fatal diminution 
 of individual riches, though the wealth of 
 the nation remains unaltered and unchang- 
 ed ; and this is a proposition the truth of 
 which does not depend upon any theory. 
 The merchants of this country have severe- 
 ly felt it, both at the commencement of th^
 
 Ot INDIVIDUAL RICHES. ^ 
 
 last, and of the present war. * It is the 
 knowledo;e mercantile men derive from ex- 
 perience of the calamitous effects of a sud- 
 den alteration of demand, that leads them 
 often to declare, (what to those who have 
 not studied the subject appears ridiculous,) 
 that they prefer even the calamities of con- 
 tinued warfare, with all its attendants, such 
 as advanced wages, increased freights, and 
 insurances, to a fluctuation betwixt war 
 and peace ; and the theory here advanced 
 explains the grounds of the assertion. 
 
 Indeed, nothing can more forcibly illus- 
 trate the truth of this doctrine, than the 
 events which happened at the commence- 
 ment of the last war. The sudden demand 
 for all those articles which warfare makes 
 
 * The foUovting statement of bankruptcies, taken from th^ 
 London Gazette, seems to shew, that the effect oi this de- 
 rangement of expenditure, is felt, mure or less, at the com- 
 mencement of every war, 
 
 Bankruptciei. Bankruptcies. Bankruptcies. 
 
 .1752,-158 1I774, -.S60 (17«4, - 51? 
 
 \ 1753, '214 X J 1778, -675 In ) 1791,- 604 
 
 Iii< 1754, - 244 ") 1779^ -544 )1792, - 628 
 
 1 1756, - 278 ( 1780, - 449 C1793, - 1304 
 
 ^1757,-274
 
 90 OF PUBLIC WEALTH, AND 
 
 necessary, abstracting a large portion of the 
 demand from the commodities prepared 
 and preparing for the market, on the sup- 
 position it was to remain in the usual 
 state, diminished thereby the value of the 
 commodities on hand to such a degree, 
 that the merchants and manufacturers were 
 incapable of making good their engage- 
 ments. 
 
 In this situation. Government aided the 
 mercantile interest with loans of money, 
 in two hundred and thirty-eight different 
 cases, amounting in all nearly to two mil- 
 lion two hundred thousand pounds. * This 
 empowered the merchants to retain their 
 goods for a time ; and as the quantity im- 
 ported and manufactured was soon cur- 
 tailed, in consequence of the effects of the 
 war, the proportion came within a short 
 time to be restored betwixt the demand 
 and the quantity, in such a manner, that 
 the com.modities resuming their former 
 value, those who received assistance were 
 
 * TheexHCl sum was L. 2,202,200.
 
 OF INDIVIDUAL RICHES. 91 
 
 enabled to repay Government without any 
 loss ; which was to be expected, because, 
 though the value of the commodities was 
 diminished in consequence of the sudden 
 alteration of demand, they remained in 
 substance : the wealth of the nation was in 
 fact nowise affected by it ; and the goods 
 in hand were sure to resume their value, 
 whenever, by the diminution of supply, the 
 proportion came to be restored betwixt 
 the quantity of them and the demand for 
 them. * 
 
 * It is perhaps unfortunate, that the cause of this evil, as 
 well as the mode in which the relief operated, never was suf- 
 ficiently explained ; otherwise it would have been impossible, 
 that similar relief should have been refused at the commence- 
 ment of the present war; because, as the evil originates with 
 measures which Ministers think it necessary to take for the 
 public safety, it is not alone views of expedience which ought 
 to induce government to aid the mercantile interest, for the 
 merchants must appear to have in equity a right to such as- 
 sistance.
 
 ^2 OF PUBLIC WEALTH, AND 
 
 3. Of the Effects of the Alteration in the Or- 
 der of Expenditure, occasioned by an In- 
 crease in the Quantity of any Commodity, 
 
 The variation likely to be effected in the 
 value of a commodity, by an increase of 
 its quantity, has been already traced out 
 and exemplified, by supposing the usual 
 supply of sugar in any society to be Jit 
 once increased from one to two thousand 
 pound weight. The reduction of the va- 
 lue of that article, which must naturally 
 ensue from the manner the growers of su- 
 gar will be induced to press it on the mar- 
 ket, in consequence of their avidity to ob- 
 tain the usual quantity of the objects of 
 their desire, has been pointed out ; and it 
 appears obvious, that the consequence of 
 thus reducing the sum-total of commodi- 
 ties applicable to the acquisition of sugar, 
 must be, that a part of what was formerly 
 applied to the purchase of this article, be- 
 coming unappropriated, will remain in the 
 hands of the consumers of sugar, to be used
 
 OF INDIVIDUAL RICHES. 93 
 
 for the acquisition of such other commodi- 
 ties as are most suitable to their taste. 
 
 For these articles, therefore, whatever 
 they may be, there must of course be an 
 additional demand ; and the value of each 
 of them must rise just in proportion, as 
 more or less of the goods formerly applied 
 to the acquisition of sugar, is now appropri- 
 ated to acquire that particular article. 
 
 Though reason teaches us, that this must 
 be the case, it is not alone to be inferred 
 from theory and speculation. In practice, 
 the effect of a great increase of the quanti- 
 ty of a commodity, in raising the price of 
 other commodities, has been long a matter 
 of notoriety. It has been long a common 
 and constant remark of those who habitu- 
 ally attend to the value of public securities, 
 that the price of stock, in a fertile season, 
 will stand perceptibly higher, by two or 
 three per cent., than in a year of scarcity. 
 
 Grain is, indeed, the article most neces- 
 sary to man ; and as mankind must gene- 
 rally enjoy nearly a sufficiency of that on 
 which their existence depends, a sudden in-
 
 94 OF PUBLIC WEALTH, AND 
 
 crease in the quantity of such an article, 
 must, as has been shewn, produce a greater 
 diminution in its value, than a proportion- 
 able increase of quantity would produce in 
 the value of articles of taste; because there 
 is hardly a possibility of conceiving a sud- 
 den source of extended demand, and of 
 means of satisfying that demand, for a 
 thing of which every man must have near- 
 ly enough ; whereas, the reduction of va- 
 lue produced in articles of taste, by a simi- 
 lar increase of quantity, (which, after this 
 increase, will still remain comparatively 
 scarce,) must create new sources of demand 
 for them, long before their value can be 
 materially reduced. 
 
 The effect, therefore, of an increase in 
 the quantity of grain, in raising the price 
 of other commodities, must be more easily 
 perceived; but there is no commodity what- 
 ever, of which the quantity can b^ increas- 
 ed so as to diminish its value, without oc- 
 casioning an augmentation of the value of 
 some other article. 
 
 10
 
 OF INDIVIDUAL RICHES. 95 
 
 4, Of the Effects of the Alternations in the Or- 
 der of Expenditure, occasioned by a Dimi- 
 nution of Demand for any Commodity, 
 
 As there never exists a desire, and conse- 
 quently a demand, for any commodity, 
 but from the circumstance of its power 
 to satisfy either the appetite or taste of 
 mankind; so there never exists a diminution 
 in the demand for any commodity, but — 
 either in consequence of a rise in the value 
 of some other commodity, the full enjoy- 
 ment of which man prefers, making it ne- 
 cessary to abstract some part of the com- 
 modities usually appropriated to the acqui- 
 sition of it, that by their means he may 
 obtain, as nearly as possible, his usual 
 quantity of the commodity he prefers ; — or 
 in consequence of something being disco- 
 vered better adapted to satisfy the same de- 
 sires. 
 
 It appears, therefore, that the effects in 
 the alteration of the order of expenditure 
 occasioned bv a diminution in the demand
 
 96 OF PUBLIC WEALTH, AND 
 
 for any commodity, have been already con- 
 sidered, and treated of under the head of 
 the effects in the alteration of the order of 
 expenditure occasioned by the increuae in 
 the demand for any commodity. 
 
 This part of the subject was there il- 
 lustrated, by pointing out the consequen- 
 ces of diminution of demand for the ar- 
 ticles of butchers-meat, wine, and mustard : 
 it is, therefore, here only necessary to 
 repeat, that the effects in the diminution of 
 demand for any article, never terminate 
 by diminishing the value of the commodity 
 in relation to which they take place ; be- 
 cause, as the proprietor of that commodity 
 must, by the diminution of its value, have 
 less to bestow on the acquisition of the va- 
 rious objects of desire he was accustomed 
 to enjoy, so a diminution in demand must 
 also take place with regard to them ; and 
 the same consequences must, indirectly 
 through them, ensue with relation to other 
 commodities, which the possessor of this 
 last class of goods was habituated to enjoy. 
 Though it seems established by the fore-
 
 OF INDIVIDUAL RICHES. 97 
 
 going reasoning, that an augmentation in 
 the riches of individuals may be attended 
 with a diminution of wealth, that the riches 
 of individuals may be diminished by a so- 
 ciety's becoming more wealthy, and that, 
 while the wealth of the community remains 
 unaltered in every particular, there may be, 
 from the circumstance of variation in de- 
 mand, a diminution or augmentation in the 
 sum-total of individual riches ; (though, in- 
 deed, it can seldom happen, that an increase 
 of the one should produce a similnr increase 
 in the other ;) yet there is a possibility that 
 the mass of individual riches may be so 
 augmented under such circumstances, that 
 the increase will indicate a proportional aug- 
 mentation of the wealth of the communitv. 
 Let us .suppose, for instance, that the 
 supply of sugar should suddenly increase 
 in any society ; for example, from one 
 thousand to fifteen hundred pound weight ; 
 and that the demand should increase in 
 the same proportion : let us further sup- 
 pose, that every person who grew or fabri- 
 cated any commodity with which sugar was
 
 98 OF PUBLIC WEALTti, AND 
 
 purchased, should have, in like manner, 
 produced an extra quantity of various ar- 
 ticles, for which the growers of sugar should 
 have also a proportionably increased de- 
 mand. Then, as the hypothesis implies, 
 that, in every instance, there would be 
 maintained the same proportion which ex- 
 isted antecedent to the increase of produc- 
 tion, both betwixt the quantity and demand 
 for each of the commodities usually sa(3ri- 
 ficed to the acquisition of sugar, and be- 
 twixt the demand for, and quantity of, su- 
 gar itself; the increase of value must be, 
 in such a case, exactly proportioned to the 
 increase of quantity ; that is, the mass of 
 individual riches, and the wealth of the 
 community, will increase in the same pro- 
 portion. 
 
 It follows then, that, when we come to 
 examine, whether the wealth of the society 
 will really be augmented by any proposed 
 regulations, {as men are only interested in 
 soliciting legislative arrangements in con- 
 sequence of their effect in increasing indi- 
 vidual riches,) we must consider ; —
 
 OF INDIVIDUAL RICHES. QQ 
 
 1. Whether that augmentation of indivi- 
 dual riches is produced solely by the dimi- 
 nution of the quantity of any commodity. 
 
 2. Whether it is produced solely by an 
 augmentation of demand for any commo- 
 dity. 
 
 For, in the first of these cases, there must 
 of necessity be a diminution of public 
 wealth ; — in the second, public wealth will 
 neither be increased nor diminished ; and, 
 in both cases, though there will be an im- 
 mediate increase of individual riches, as far 
 as the value of one commodity contributes; 
 yet, in consequence of the derangement of 
 expenditure, there will be a much greater 
 diminution in the value of other commodi- 
 ties, and, of course, a great falling off in the 
 general mass of individual riches. 
 
 If, however, we find, that the means 
 proposed tend to increase proportionably 
 both thequantity of, and the demand for, 
 any commodity, and at the same time to 
 create funds for the acquisition of this ad- 
 ditional quantity, without diminishing the 
 demand for any other commodity, it may
 
 100 OF PUBLIC WEALTH, AND 
 
 be then considered as a proposition which 
 will undoubtedly augment, in the same 
 proportion, both the riches of individuals, 
 and the wealth of the society. 
 
 For example : if the supply of sugar is 
 increased from one thousand to fifteen hun- 
 dred pound weight, and there should, that 
 year, be produced by the consumers of su- 
 gar an extra quantity of grain, (for which 
 the growers of sugar should have a de- 
 mand,) just sufficient to pay for the increas- 
 ed quantity of sugar ; then, as the propor- 
 tion betwixt the demand for, and the quan- 
 tity of, sugar would be preserved, notwith- 
 standing the increased supply ; and as the 
 proportion would be in like manner preserv- 
 ed in relation to grain, and nowise alter- 
 ed in any other commodity ; the increase of 
 individual riches would be in direct pro- 
 portion to the increase of the quantity of 
 grain and sugar : that is, public wealth and 
 individual riches would increase in similar 
 proportions. 
 
 But if it should appear, that the means 
 proposed tend only to create a rise in the
 
 OP INDIVIDUAL RICHES. 101 
 
 demand and the quantity of one commo- 
 dity, — of sugar for example ; and that this 
 additional quantity of sugar is to be paid 
 for, by abstracting a portion of commodi- 
 ties from the acquisition of other objects of 
 desire ; then the wealth of the community 
 may indeed be increased in the same pro- 
 portion with individual riches in the single 
 article of sugar : that is, the quantity of 
 sugar and the value of it will increase in 
 the same proportion. But the diminution 
 of demand for other commodities, from the 
 purchase of which there was abstracted 
 that which is now applied to the acquisi- 
 tion of the additional quantity of sugar, 
 must reduce the price of them so as to dimi- 
 nish the mass of individual riches ; because, 
 as has been already explained, the abstrac- 
 tion of demand to a given amount always 
 sinks the value of the commodity from 
 whence the demand is abstracted, to a 
 much greater amount than the value ab- 
 stracted. 
 
 For instance : if the growers of grain, 
 whom we suppose to have had a demand
 
 102 OF PUBLIC WEALTH, AND 
 
 for, and to have purchased the increased 
 quantity of, sugar, instead of having an in- 
 creased quantity of grain to pay for it, had 
 paid for it by abstracting from the acquisi- 
 tion of butchers-meat, wine, and mustard, 
 a quantity of grain which they formerly sa- 
 crificed to the purchase of these commodi- 
 ties; then the reduction of the price of these 
 articles, in consequence of the diminution 
 of demand for them, must (notwithstand- 
 ing the wealth of the public, and the mass 
 of riches, are proportionably increased in 
 as far as sugar is concerned) occasion a di- 
 minution in the mass of individual riches ; 
 because the diminution upon those articles 
 must be much greater than the increase in 
 the value of sugar. 
 
 The conclusion is therefore inevitable, 
 that there exists only one case, and that a 
 very improbable one, — (to wit, when the 
 quantity and the demand for any commodi- 
 ty are proportionally increased, and funds 
 at the same time are created for the acqui- 
 sition of the increased quantity, as well as 
 the satisfaction of the increased demand,)—
 
 OP INX)IVIDUAL RICHES. 103 
 
 in which an increase in the mass of indivi- 
 dual riches produces a similar efFecton the 
 wealth of the community. 
 
 It is further necessary to remark, that, 
 when variations in value, or in the mass of 
 individual riches, are created by alterations 
 in the quantity of any commodity, the op- 
 posite effect in all cases immediately takes 
 place in public wealth. A diminution of 
 the value of a commodity, in consequence 
 of aji alteration of its quantity, is an inva- 
 riable symptom of an immediate increase 
 of its quantity; and of course of an increase 
 of public wealth : an augmentation of the 
 value of a commodity, in consequence of 
 an alteration of its quantity, is an invari- 
 able symptom of an immediate diminution 
 of its quantity, and consequently of a dimi- 
 nution of public wealth. 
 
 But if there is a diminution in the value 
 of a commodity, in consequence of a vari- 
 ation in the demand for it, this is no symp- 
 tom of an immediate alteration in the 
 quantity of the commodity; but it is a sure 
 presage uf future diminution of its quanti-
 
 10<Ij of public wealth, and 
 
 ty, and of course a diminution of public 
 wealth ; and if there is an augmentation in 
 the value of a commodity, in consequence 
 of an alteration in the demand for it, this, 
 in like manner, is no symptom of an altera- 
 tion in the quantity of a commodity ; though 
 it is always followed by a reduction of its 
 quantity, and of course by a reduction of 
 public wealth. 
 
 A confirmation of the opinion, that pri- 
 vate riches and public wealth can hardly 
 ever increase in similar proportions, is not, 
 therefore, the only valuable information 
 we derive from contemplating the varia- 
 tions which changes of quantity and of de- 
 mand create, not only in the value of the 
 commodities in which they take place, but 
 also indirectly in that of all other commo- 
 dities ; and of course in the value of the 
 mass of what is annually produced by na- 
 ture and art. 
 
 For, as exchangeable value (the posses- 
 sion of which constitutes any commodity 
 a portion of individual riches) is, when ac- 
 curately considered, merely the practical
 
 OF INDIVIDUAL RICHES. - 105 
 
 means of expressing the degree of desire 
 for any particular article of wealth, it is al- 
 so most material to observe the forcible 
 manner in which, from this analysis of the 
 causes of variation in the value of commo- 
 dities, it appears, that demand must at all 
 times regulate both the quantity and 
 quality of what is produced. 
 
 Thus, when variations in value are cre- 
 ated by an increase of demand for any com- 
 modity, the industry of the community is 
 not alone directed to increase the produc- 
 tion of that article, by the extraordinary 
 encouragement derived from its augment- 
 ed value ; for a part of the industry is at 
 the same time called off from the formation 
 and production of other articles, by the dis- 
 couragement which a diminution in their 
 value creates ; as was exemplified in the 
 effects of an increased demand for suoar in 
 raising the price of that article, and in de- 
 pressing the value of wine, butchers-meat, 
 and mustard, and consequently that of va- 
 rious other articles. 
 
 In like manner, when variation in value
 
 106 OF PUBLIC WEALTH, AND 
 
 is occasioned by a diminution of demand, it 
 discourages the production of the commo- 
 dity for which the demand is diminished, 
 not only by the great reduction of its va- 
 lue ; for, at the same time, new and high- 
 ly advantageous channels of industry are 
 pointed out for those who were employed 
 in producing it, by the extension of de- 
 mand for, and consequent rise in, the value 
 of other commodities, which it has been 
 made apparent must take place. 
 
 It follows also from what has been stat- 
 ed, that, when variation of value is occa- 
 sioned by alterations in the quantity of 
 commodities, demand must act with the 
 same compounded energy ; for, when the 
 quantity of a commodity is increased, the 
 production of it is not alone discouraged 
 by the great diminution of its value, but 
 the industry of the community is at the 
 same time directed towards the formation 
 of articles, to the acquisition of which those 
 goods are applied, which have become un- 
 appropriated in consequence of the cheap- 
 ness of the abundant commodity, whose 
 
 ii
 
 OF INDIVIDUAL RICHES. 107 
 
 value is now increased by this additional 
 demand. 
 
 In like manner, when the quantity of any 
 commodity is diminished, demand ope- 
 rates in restoring the usual supply, not only 
 from the encouragement it gives to those 
 who are concerned in producing that ar- 
 ticle, by the great rise in its value ; but, 
 with augmented energy, from the circum- 
 stance, that the necessary fall in the price 
 of other commodities calls off a portion of 
 industry from the formation of them, whilst 
 it points it to the production of the article 
 whose quantity is reduced.
 
 CHAR III. 
 
 OF THE SOURCES OF WEALTH. 
 
 Though it may appear extraordinary, that 
 the sources of wealth, which have been the 
 object of much speculation, should not have 
 been long ago accurately investigated and 
 defined ; it is nevertheless certain, that 
 tliere is no subject on which there has ex- 
 isted, and does exist, more marked variety 
 of opinion. 
 
 Land, labour, and capital, are indeed 
 the only sources to which the origin of 
 any part of our wealth has ever been 
 ascribed. But while some have eagerly 
 contended, that land is the sole source of 
 opulence, and that whatever is acquired 
 by labour or capital is derived from the
 
 OF THE SOURCES OF ^VEALTH. 109 
 
 landholder, others have discovered equal 
 anxiety to attribute the origin and increase 
 of our wealth to commerce and manufac- 
 tures ; that is, to the operation of labour 
 and capital. 
 
 That system which represents the pro- 
 duce of land as the sole source of the reve- 
 nue, and the wealth of a nation, * has long 
 had its disciples in this country, who have 
 considered the earth as the fountain of all 
 the riches and abundance of the world, 
 partly proceeding from its mines and its 
 fisheries ; principally from what is nourish- 
 ed on its surface, f 
 
 " What we call commodities," (says an 
 ingenious author of the I7tli century, J) 
 
 * This opinion is of very ancient date. It is said to have 
 been a saying of Artaxerxes, King of Persia, That " the au- 
 " thority of the Prince must be defended by a military force ; 
 " which force can only be maintained by taxes ; and all taxes 
 " must, at last, fall upon agriculture." Gibbon's History, Vol. 
 I. p. 256, 4to edit. 
 
 -|- See the Treasure of Traffic, by Lewis Roberts, l()41. 
 Vanderlint's Essay to make Money plenty. Also, Locke on 
 lowering the Interest, and raising the Value of Money. 
 
 + Several assertions proved, in order to create another spe- 
 cies of Money than Gold, 1696.
 
 110 OF THE SOURCES OF WEALTH. 
 
 " is nothing but land severed from the soil. 
 " Man deals in nothing but earth. The 
 " merchants are the factors of the world, to 
 " exchange one part of the earth for ano- 
 " ther. The King himself is fed by the 
 " labour of the ox ; and the clothing of the 
 " army, and victualling of the navy, must all 
 " be paid for to the owner of the soil as the 
 " ultimate receiver. All things in the world 
 " are originally the produce of the ground, 
 " and there must all things be raised." 
 
 The system, on the other hand, which 
 gives to commerce the pre-eminence as a 
 source of wealth, was for years the favour- 
 ite, if not the established doctrine, in this 
 country. * Its followers held, that those 
 nations who have no mines of gold and sil- 
 ver, have no means to get them but by 
 foreign trade ; that in proportion to the 
 quantity of those metals which a nation can 
 thus obtain, the prices of its commodities, 
 the numbers of the people, and therewith 
 the value of its land, rise and fall : that 
 
 * See Appendix, No. 11.
 
 OF THE SOURCES OF WEALTH. Ill 
 
 if the exports of a nation exceed the im- 
 ports, foreigners must pay the balance in 
 treasure, and that the nation must of course 
 srow rich : that if, on the other hand, the 
 imports exceed the exports, the balance 
 must be paid to foreigners in treasure, and 
 the nation grow poor. 
 
 This last opinion, though early opposed 
 by men of eminent talents, has long formed 
 the ground- work on which European legis- 
 lation has proceeded, — if we may judge 
 from the rules and regulations that it has 
 been the object of the legislature of this 
 country, as well as the laws of others, to 
 establish. 
 
 Of late years, this opinion has been re- 
 probated by the Economists in France, and 
 by the Author of the Wealth of Nations in 
 this country ; and its fallacious, as well as 
 dangerous, consequences have been exposed. 
 But though we are indebted to Dr Smith, 
 and to that sect of philosophers, for setting 
 aside a system replete with error, we un- 
 fortunately derive r;either from the one nor 
 the other, a satisfactory solution of that
 
 11^ OF THE SOURCES OF WEALTH. 
 
 most Important question in Political Eco- 
 nomy, What are the sources of Wealth ? 
 
 The prejudices of mankind, with reason, 
 (as we shall have ample opportunity of 
 shewing,) revolt at the opinions maintain- 
 ed, with so much perseverance and inge- 
 nuity, by the followers of Quesnay, which 
 totally set aside labour and capital as sour- 
 ces of wealth ; and which regard that part 
 of the produce of the earth remaining after 
 payment of the total expences of culture, 
 as alone contributing to the wealth of a na- 
 tion ; and we derive from Dr Smith no as- 
 sistance in forming our opinions on this 
 important subject ; for he seems to have 
 had no fixed ideas in relation to it. In- 
 deed, there is no opinion that has been any 
 where maintained on the subject of the 
 sources of national wealth, which does not 
 appear to have been adopted in different 
 parts of the Inquiry into the Wealth of 
 Nations. 
 
 " 1. The annual labour of every nation 
 " is" at one time stated to be " the fund 
 " which originally supplies it witU all the
 
 OF THE SOURCES OF WEALTH. 113 
 
 " necessaries and conveniences of life, 
 " which it annually consumes, and which 
 " consists always either in the immediate 
 " produce of that labour, or in what is pur- 
 " chased with that produce from other na* 
 " tions." * 
 
 2. Lands, mines and fisheries, elsewhere, 
 are regarded as replacing " with a profit, 
 " not only the capitals employed on them, 
 ^' but all the other capitals employed in the 
 " community." f That, however, which 
 replaces all the capitals employed in the 
 community, and is the source from whence 
 they derive their profit, must be the sole 
 source of wealth. Mankind are, therefore, 
 here considered as deriving the whole of 
 their wealth from land. 
 
 3. Again : plain reason is stated to dic- 
 tate, that the real wealth of a country con- 
 sists in the annual produce of its land and 
 
 * Wealth of NaLions, Vol. I. p. I. 4to edit. This opinion 
 is maintained by Mr Hume. See his Discourse of CommercCj 
 p. 12. edit. 1752. 
 
 t Wealth of Nations, Vol. I. p. 338. 4to edit, 
 H
 
 1 14 OF THE SOURCES OF WEALTH. 
 
 labour ; * and this opinion, which coin- 
 cides with that of the Bishop of Cloyne, f 
 and the learned author J of the Essay on 
 Money and Coins, is most generally adher- 
 ed to by Dr Smitli. 
 
 4. In another part of the work, how- 
 ever, we find it asserted, that "land and 
 " capital stock are the two original sources 
 " of all revenue, both private and public : 
 " capital stock pays the wages of produc- 
 " tive labour, whether employed in agri- 
 " culture, manufactures, or commerce." § 
 Land and capital are therefore here deem- 
 ed the sole sources of wealth ; and labour 
 is considered as deriving from them its 
 v/ages, without adding to the opulence of 
 the community. 
 
 5. Lastly, we are taught to consider land, 
 
 * Wealth of Nations, Vol. I. p. 414. 
 
 "I* Querist. Quer. 4. " Whether the four elements, and 
 " man's labour the rein, be not thejtrue source of wealth." 
 
 + " Land and labour together are the sources of all wealth. 
 " Without a competency of land, there would be no subsist- 
 " ence, and but a very poor and uncomfortable one without 
 " labour. So that ivealth or riches consist either in a property 
 " in land, or in the products of land and labour." 
 
 I Wealth of Nations, Vol. II. p. 560. 4lo edit.
 
 OF THE SOURCES OF WEALTH. 115 
 
 labour, and capital, as being, all three, sour- 
 ces of wealth ; for we are told, that " who- 
 <' ever derives his revenue from a fund that 
 " is his own, must draw it either from his 
 " labour, his stock, or his land. The reve- 
 ts nue derived from labour is called wages ; 
 " that from stock profit ; and from land 
 " rent ;" * an opinion which seems to have 
 been hinted at by Sir William Petty, f 
 when he stated it as an impediment to the 
 wealth of England, that taxes were not le- 
 vied upon lands, stock, and labour, but 
 chiefly upon land alone ; though land and 
 labour are generally considered by that 
 ingenious writer as the sole sources of 
 wealth. X 
 
 In treating of Political Economy, the 
 science which professes to display and to 
 teach the means of increasing the wealth 
 of a state, it would seem that the first and 
 
 * Wcallh o,''NHtions, V .1. I. p. 63. 4to edit. 
 
 t Tracts, Edit. 176S, p. 268. 
 
 j " Labour is the father and active principle of wealth, a? 
 *' lands arc the mother." Treatise on Taxes and Contribu- 
 tions, 1667 1 4to edit. p. 47.
 
 llO' OF THE SOURCES OF WEALTH. 
 
 most anxious object of inquiry ought to 
 have been, What wealth is, and from what 
 sources mankind derive it ? for it appears 
 impossible to discuss with precision the 
 means of increasing any thing, without an 
 accurate notion of its nature and of its 
 origin. Yet, if we reject the doctrine of 
 the Economists, it is in vain we look for 
 a decided and precise opinion upon the ori- 
 gin of wealth, in any modern work on public 
 economy ; and it is impossible not to think, 
 that the anxiety of the economists to over- 
 throw that system, which regards commerce 
 as the sole source of opulence, has led them, 
 in rejecting labour and capital as original 
 sources of wealth beyond the bounds that 
 reason authorizes. 
 
 The liberal doctrines to which this theo- 
 ry led, by inculcating the impropriety of 
 all legislative restraints, or interference in 
 commercial transaction, must command ap- 
 probation ; but they are nowise inconsist- 
 ent with the opinion we shall endeavour to 
 establish, that land, labour, and capital are, 
 
 10 ,
 
 OF THE SOURCES OF WEALTH. 117 
 
 all three, original sources of wealth ; that 
 each has its distinct and separate share, 
 (which it is most necessary should be defi- 
 ned and understood,) in the formation of 
 those objects which are desirable to man, 
 and which have been shown to constitute 
 his wealth. 
 
 Though these three original sources of 
 wealth, in the various states of existence in 
 which history displays man, contribute to 
 his wealth in very different proportions, 
 yet, in every state of society in which he is 
 known to exist, each, more or less, affords 
 its share. 
 
 Consumption, most undoubtedly, must 
 always precede reproduction ; but, long be- 
 fore man cultivated the earth as a means of 
 procuring his subsistence, he must have de- 
 rived his wealth from all of these sources. 
 To appropriate the fruit of a tree or an ani- 
 mal for food, he must have, in a certain 
 degree, laboured; and it will be shown, 
 that the first stick or stone he took into his 
 hand to aid and assist bim in procuring
 
 118 OF THE SOURCES OF WEALTH* 
 
 those objects, by performing a portion of 
 his labour, fulfilled the same duty in which 
 every branch of the capital of a mercantile 
 nation is now engaged. 
 
 1. Of Land, including Mines and Fisheries ^ 
 as a Source of National Wealth. 
 
 In the earliest stages of society, men ac- 
 quire that portion of wealth they derive 
 from the surface of the earth, in the same 
 manner as, in every stage of society, they 
 attain that part of their wealth which pro- 
 ceeds from the ocean. Their exertions are 
 not made to increase the quantity, but to 
 appropriate and adapt for use the portions 
 of those things nature has formed, for which 
 their wants and their appetites give them 
 a desire. 
 
 In this state of his existence, therefore, 
 man derives a greater proportion of what 
 forms his wealth from land, than in subse- 
 quent stages of society, when the aid of la-
 
 OF THE SOURCES OF WEALTH. 119 
 
 bour and capital are called in, not only to 
 appropriate and render fit for nse, but to 
 meliorate the quality, and increase the 
 quantity, of those commodities for which 
 his desires create a demand. 
 
 This, however,, is but of short continu- 
 ance ; for nature, whilst she has implanted 
 in him the seeds of an unbounded variety 
 of desires, has every where scattered, with 
 so sparing a hand, the means ofsatislying 
 them, that the assistance of labour and ca- 
 pital is early called in to perform the most 
 important duty allotted to them through 
 any stage of society, that of increasing the 
 quantity of those productions of nature 
 which form the objects of our desire ; and 
 from that momentr the natural produce of 
 the earth gives way to those productions, 
 which the industry of man, by improve- 
 ment in cultivation, procures in augmented 
 quantity and superior quality. 
 
 In treating of the increase of wealthy 
 therefore, we shall again be called upon to 
 consider this subject. At present it is on-
 
 120 OF THE SOURCES OF WEALTH. 
 
 ly necessary to observe, that, with the single 
 exception of the economical system long 
 prevalent in France, every thing useful to 
 man, produced by land, whether spon^ 
 taneously or extracted by art, has been 
 deemed, under all systems of political 
 economy, to add to the wealth of a coun- 
 try. 
 
 It was, indeed, the principal tenet of the 
 economists, that the earth is the sole source 
 of riches, which are multiplied by agricul- 
 ture ; * but, by a strange mode of reason- 
 ing, they exclude that part of the produce 
 of the earth which is reserved for seed, and 
 for furnishing the nourishment of the cul- 
 tivator, from forming any portion of na- 
 tional wealth, t This part of the produce 
 
 * " Que le Souverain et la Nation ne perdent jamais de vue, 
 •" que la terre est I'unique source des richesses, et que c'est 
 ** Tagriculture que les multiplie.''— " Let the Sovereign and 
 ** the Nation constantly keep in view, that the earth is the sole 
 ''source of riches; and that agriculture is what multiplies 
 ** them." Maxime economique d'un royaiime agricole. Physio- 
 ij-atie, p. 107. 
 
 + *' II y en a environ la moitie qui se consomme immedi- 
 ** atemeut et en nature che2 les cultivateurs. On ne peut 
 *' done impuler a cette moitie, qui n*est pas commeicable, ni
 
 OF THE SOURCES OF WEALTH. 1§1 
 
 was by them deemed necessary to secure 
 the production of future wealth, and to use 
 their own language, they regard it not as 
 wealth, but as a machine that must be care- 
 fully preserved, for the continual reproduc- 
 tion of wealth. * 
 
 So thoroughly do this sect of Philoso- 
 phers attach their idea of public wealth to 
 what constitutes the mass of individual 
 
 *' I'augmentation des prix, ni I'augmentation des depenses 
 *' causee par le rcncherissement. Ainsi elle ne doit pas en- 
 " trer dans )e calcul du changement de prix dontil s'agit ici, 
 " puis qu'elle n'cntre pas dans le commerce, et que la con- 
 *' sommation qui en est faite constamment chez les cultiva- 
 " teurs, n'augmente ni ne diminue, dans les changemens du 
 " prix, les frais d'exploitation de la culture." — " About one- 
 " half (of what is produced) is consumed immediately, in the 
 *' nourishment of the cultivators. To that half, then, which 
 ♦' is not the subject of traffic, cannot be imputed the augmen- 
 *' tation either of the value, or of the expenditure, occasioned 
 ** by the rise of price. Accordingly, it ought not to enter 
 " into the calculation of the change of value, which is the 
 " thing at present in question ; since it is not the subject of 
 " commerce, and since the consumption of it, which constant- 
 " ly takes place among the cullivalors, neither augments nor 
 «* diminishes, by alteration of price, the expence of improvc- 
 " ment and cultivation.'* Physiocratie, p. 188. 
 
 • " Les avances de I'agriculture d'un royaume, doivent etre 
 *' envisagees comme un immeuble, qu'il faut conserver pre- 
 " cieusement pour la production de i'impot, du revenue, et de
 
 122 OF THE SOURCES OF WEALTH. 
 
 riches, that it is another of their maxims 
 to consider the cheapness of the produc- 
 tion of the earth as of no advantage to the 
 people. * For they deem the revenue, that 
 is, the wealth of the country, to be great in 
 proportion as the value of the productions 
 of the earth are high. Abundance, and 
 high price, are, according to them, equally 
 necessary to form wealth ; f — two things 
 Quesnay, the father of the system, would 
 have known to be no more capable of co- 
 
 " la subsistance de toutes les classes de citoyens." — " The 
 *' advances made in the cultivation of a kingdom ought to be 
 *' considered as an invariable quantity, which must be care- 
 *' fully preserved for the production of the imposts, of the 
 " revenue, and of the subsistence of every class of citizens.*' 
 Physiocratie, p, 109- 
 
 * " Le bon marche des denrees n'est pas avantageux au 
 '* petit peuple." — " Tiie cheapness of commodities is not ad- 
 *• vantageous to the common people.'* physiocrat ie^ p. l62. 
 
 \ " Telle est lavaleur venale, tel est le revenu. Abondance 
 " et non valeur n'est pas richesse. Disette et cherte est 
 " misere. Abondance et cherte est opulence." — ** The re- 
 *' venue is always great in proportion as the exchangeable 
 *' value of commodities is high. Abundance and cheapness 
 " do not constitute riches. Scarcity and dearth are misery. 
 *' Abundance and dearness are opulence." Physiocratie^ 
 
 p. we.
 
 eF THE SOURCES OF WEALTH. 1^3 
 
 existence than heat and cold, had he un- 
 derstood the nature of value. 
 
 It is, however, this idea which appears 
 to make them exclude that part of the pro- 
 duce of the earth which is applicable to 
 seed and the nourishment of the cultivator, 
 from forming a part of national wealth. 
 They considered it as an invariable quan- 
 tity, which can never be brought into the 
 market ; which could not of course influ- 
 ence price ; which they did not, therefore, 
 deem a portion of wealth or riches, — two 
 things invariably viewed by them as one 
 and the same. 
 
 Even on their own principles, they are 
 obviously so far wrong, as they exclude 
 what is appropriated to the nourishment of 
 the cultivator ; for it is the seed alone that 
 can by possibility be deemed an invariable 
 quantity, as, undoubtedly in practice, scarci- 
 ty, which always increases price, forms an 
 encouragement to the cultivator to sell ; 
 and thus diminishes what is appropriated 
 for his sustenance, in the same manner as 
 it does that of any other labourer.
 
 124 OF THE SOURCES OF WEALTH. 
 
 It must be remarked, too, that it is an 
 undeniable inference from this doctrine, 
 (which excludes the part of the produce 
 applicable to seed and the sustenance of the 
 cultivator from forming a part of national 
 wealth,) that the more you can reduce the 
 maintenance of the husbandman, — as the 
 more will remain to be carried to the mar- 
 ket, and of course to the account of net 
 produce, so the greater must be the na- 
 tional wealth. Thus, the wealth of the 
 nation is made to depend upon depriving 
 the most important class of its inhabi- 
 tants of a part of the objects of their de- 
 sire. 
 
 But it does not seem to require much 
 argument to set aside this opinion. If the 
 distinction betwixt public wealth and pri- 
 vate riches is founded in truth ; if wealth 
 has been rightly defined to consist of all 
 those objects for which men possess a de^ 
 sire, it is impossible to discover why that 
 which is applicable to the satisfaction of 
 the desires of the husbandman, should not
 
 OP THE SOURCES OF WEALTH. 125 
 
 as truly form a portion of our wealth, as 
 that which is subservient to the desires of 
 any other labourer. Neither can we, with 
 any propriety, exclude that part of the an- 
 nual produce reserved for seed, from form- 
 ing a portion of wealth, merely because it 
 is not employed in satisfying our immedi- 
 ate desires, but is devoted to the formation 
 of that which is to administer to them at a 
 more remote period. 
 
 It is on these grounds that the whole of 
 the fruits of the earth, as well as the pro- 
 duce of mines and fisheries, must be 
 considered as component parts of public 
 wealth. 
 
 % Of Labour, as a Source of Wealth, 
 
 That species of labour which has been 
 described as employed in meliorating the 
 quality, and increasing the quantity of the 
 natural produce of the surface of the earth, 
 has universally been considered and ac-
 
 126 OF THE SOURCES OF WEALTH. 
 
 knowledged as a source of wealth. That it 
 is pre-eminently so, cannot be doubted by 
 any one who reflects on the quantity of 
 food and materials for clothing, that art 
 enables man to extract from a very small 
 part of the surface of the earth, and com- 
 pares it with what nature any where af- 
 fords. What a contrast betwixt the situa- 
 tion of the solitary savage who, with diffi- 
 culty, extracts his maintenance from a dis- 
 trict around him, and that of a peasant in^ 
 a cultivated coimtry, who draws from a 
 few fields wherewithal to maintain many 
 of his own species ! The inhabitant of 
 the country of the Iroquois, or of any 
 other American nation, who lives on the 
 produce of the chace, can hardly be sup- 
 posed to collect his food from a range 
 of less than fifty acres ; whilst, in China, 
 the rice field is supposed to yield three 
 crops a-year, each returning one hun- 
 dred fold, producing on fifty acres nou?- 
 rishment sufficient for five hundred pea- 
 sants.
 
 OF THE SOURCES OF WEALTH. 127 
 
 In the vicinity of London, we know that 
 the value of the produce of an acre under 
 garden culture, may be moderately calcu- 
 lated at L. 200. * Thus the produce of 
 fifty acres, hardly sufficient in a state of 
 nature to furnish the precarious sustenance 
 of a poor American, becomes competent to 
 enable an inhabitant of this country to en- 
 joy all the refinements of European luxu- 
 ry- 
 
 • The following estimate was made by a gardener who oc- 
 cupied nine acres, situated aliout two iniles further from mar- 
 ket, as his opinion, of the produce of the soil at the neat-houses 
 before-mentioned, to wit, 
 
 The radishes, - - - L. IQ 
 
 Cauliflowers, frequently L, 70 or more, but say 6o 
 
 Cabbages, - - - SO 
 Celery, the first crop not unfrequently upwards of 
 
 L. 60, but say - - - 50 
 
 Endive, . - « . 30 
 
 Celery, second crop, - - - 40 
 
 L. 220 
 
 This he stated as an estimate rather under the mark. Mid' 
 dleton's Keport on the County of JNIiddlesex, p. 264. See 
 also p. 267,
 
 128 OF THE SOURCES OF WEALTL. 
 
 Notwithstanding the superiority which 
 the labour of the husbandman enjoys over 
 that of all other labourers in the produc- 
 tion of national wealth, it does not ap- 
 pear that every other species of labour 
 can, with justice or propriety, be considered 
 ds totally unproductive. This opinion, how- 
 ever, is expressly maintained by the econo- 
 mists, who hold that even the labour of the 
 artificer and the manufacturer is totally 
 unproductive. These philosophers uniform- 
 ly regard a thing as wealth in propor- 
 tion to its value. * Arguing on this prin- 
 ciple, they assume, (what in none of their 
 writings they prove,) that the value added 
 by the manufacturer to the raw material, 
 during his day's work, is exactly equal to 
 the value of the food, clothing, &c. he has 
 consumed ; and then they infer, (what, if 
 
 • Posons maintenant en principe, que la valeur venale est la base 
 de toule rickesse, que son accroisemeniest accroisement de richessC' 
 — '• Let us lay down as a principle, that value in exchange is 
 '' the basis of wealth, and that its increase constitutes an in- 
 *<■ crease of wealth." Philosophie Ruralct ou Economie Gene- 
 ra^eet Politique deT Agriculture, See also note, 127.
 
 OF THE SOURCES OF WEALTIf. 12<> 
 
 they are right in this assumption, is un- 
 doubted, that during the course of the day 
 he can have added nothing of value to the 
 stock of the nation. 
 
 The ingenious men, who hold these opi- 
 nions, distinguished for a close, subtile, and 
 nervous manner of maintaining them, have 
 not, with all their ingenuity, done so much 
 to support this doctrine, as the author of 
 the Wealth of Nations, by the manner he 
 has attempted to refute it. 
 
 " The capital error of this system," says 
 Dr Smith, " seems to lie in its representing 
 " the class of artificers, manufacturers, and 
 *' merchants, as altogether barren and un- 
 ** productive. The following observations 
 " may serve to show the impropriety of 
 " this representation. 
 
 " 1. This class, it is acknowledged, re- 
 " produces annually the value of its own 
 " annual consumption, and continues, at 
 " least, the existence of the stock or capital 
 ** which maintains and employs it. But 
 " upon this account alone the denomina- 
 " tion of barren or unproductive should 
 
 I
 
 130 OF THE SOURCES OF WEALTH. 
 
 " seem to be very improperly applied to it. 
 " We should not call a marriage barren or 
 " unproductive, though it produced only a 
 " S07t and a daughter, to replace the father 
 " and mother ; and though it did not in- 
 " crease the number of the human species, 
 ^' but only continued it as it was before. 
 " Farmers and country labourers, indeed, 
 " over and above the stock which maintains 
 " and employs them, reproduce annually a 
 " neat produce, a free rent to the landlord. 
 " As a marriage which affords three chil- 
 " dren is certainly more productive than 
 " one which affords only two ; so the la- 
 " bour of farmers and country labourers is 
 " certainly more productive than that of 
 " merchants, artificers, and manufacturers. 
 " The superior produce of the one class, 
 ^ however, does not render the other bar- 
 *' ren or unproductive." * Now this com- 
 parison really appears, instead of a refu- 
 tation, to be a confirmation of the doc- 
 trine of the economists ; and even to 
 
 * Wealth of Nations, Vol. II. p. 272. 4to edit.
 
 OF THE SOURCES OF WEALTH. 131 
 
 carry along with it an avowal of the opi- 
 nion, that manufacturing labour is not 
 productive of an increase of wealth. 
 
 A marriage which only produces two, 
 cannot increase the numbers of the human 
 species ; for these two (as is observed) can 
 only supply the places of the father and 
 mother. The inference, therefore, appears 
 to be, that, as such a marriage can only 
 continue, and nowise contribute to the in- 
 crease of, the human species, so manufac- 
 turing labour, as the economists strictly 
 hold, can only preserve the wealth of the 
 nation undiminished, notwithstanding the 
 consumption of the manufacture; but can 
 nowise contribute to its increase. 
 
 " 2. It seems, upon this account, alto- 
 " gether improper to consider artificers, 
 " manufacturers, and merchants, in the 
 " same light as menial servants. The la- 
 " hour of menial servants does not conti- 
 " nue the existence of the fund which 
 " maintains and employs them. Their 
 " maintenance and employment is altoge- 
 " ther at the expence of their masters, and
 
 132 OF THE SOURCES OF WEALTH. 
 
 *^ the work which they perform is not of a 
 " nature to repay that expence. That work 
 " consists in services which perish general- 
 " ly in the very instant of their perform- 
 " ance, and does not fix or reaUze itself in 
 " any vendible commodity which can re- 
 " place the value of their wages and maiu' 
 " tenance. The labour, on the contrary, of 
 " artificers, manufacturers, and merchants, 
 " naturally does fix and realize itself in 
 " some such vendible commodity. It is 
 " upon this account, that, in the chapter in 
 " which I treat of productive and unpro- 
 " ductive labour, I have classed artificers, 
 " manufacturers, and merchants, among the 
 " productive labourers, and menial ser- 
 " vants among the barren or unproduc- 
 « tive." * 
 
 Here, without stating any further objec- 
 tion to the opinion that is meant to be re- 
 futed, the outline is given of that distinc- 
 tion betwixt productive and unproductive 
 labour, which is maintained by the Author: 
 
 * Wtalth of Nations, \'oI. II. p. 273. 4to edit.
 
 OF THE SOURCES OF WEALTH. 133 
 
 the merits of which must be considered in 
 the proper place. 
 
 " 3. It seems upon every supposition 
 " improper to say, that the labour of artifi- 
 " cers, manufacturers, and merchants, does 
 " not increase the real revenue of the so- 
 " ciety. Though we should suppose, for 
 " example, as it seems to be supposed in 
 " this system, that the value of the daily, 
 " monthly, and yearly consumption of this 
 " class, was exactly equal to that of its 
 *' daily, monthly, and yearly production ; 
 *' yet it would not from thence follow, that 
 " its labour added nothing to the real re- 
 " venue, to the real value of the annual 
 " produce of the land and labour of the so- 
 " ciety. An artificer, for example, who, 
 ** in the first six months after harvest, exe- 
 " cutes L. 10 worth of work, though he 
 ••' should, in the same time, consume L. 10 
 " worth of corn and other necessaries, yet 
 " really adds the value of L. 10 to the an- 
 " nual produce of the land and labour of 
 " the society. While he has been consuming 
 " a half-yearly revenue of L. 10 worth of
 
 134i OF THE SOURCES OF WEALTH. 
 
 '* corn and other necessaries, he has pro- 
 s' duced an equal value of work, capable of 
 " purchasing either to himself, or to some 
 " other person, an equal half-yearly revenue. 
 *^ The value, therefore, of what has been 
 '' consumed and produced during these 
 ** six months, is equal, not to L. 10, but to 
 ** L. 20. It is impossible, indeed, that no 
 " more than L. 10 worth of this value may 
 " ever have existed at any one moment of 
 " time. But if the L. 10 worth of corn, 
 " and other necessaries which were consum- 
 " ed by the artificer, had been consumed 
 " by a soldier or by a menial servant, the 
 " value of that part of the annual produce 
 " which existed at the end of the six 
 " months, would have been L. 10 less than 
 " it actually is, in consequence of the labour 
 " of the artificer. Though the value of what 
 " the artificer produces, therefore, should 
 " not, at any one moment of time, be sup- 
 " posed greater than the value he consumes, 
 " yet at every moment of time, the actual- 
 " ly existing value of goods in the mar- 
 
 " ket is, in consequence of what he pro- 
 
 11
 
 OF THE SOURCES OF WEALTH. 135 
 
 " duces, greater than it otherwise would 
 " be." * 
 
 The wealth of the nation is undoubtedly 
 greater, at every moment of time, than it 
 would be if the manufacturer was supposed 
 to consume without working, or adding 
 any value to the raw material ; but on the 
 hypothesis here stated, that the workman, 
 in the first six months after harvest, should 
 execute L. 10 worth of work, and that in 
 the same time he should consume L. 10 
 worth of corn and other necessaries, as he 
 has subtracted from the national capital a 
 sum equal to that which he has added to 
 it, if wealth is regarded as dependent on 
 exchangeable value, it is difficult to per- 
 ceive how he should be deemed to have in- 
 creased the national stock by such an ex- 
 istence. 
 
 Triumphantly, however, as tiiis leading 
 tenet of the economists seems to have with- 
 stood this attack, it is impossible to sub- 
 scribe to the opinion, that the labour of the 
 
 * Wealth of Nations, ubi supra.
 
 136 OF THE SOURCES OF WEALTH. 
 
 manufacturer and the artist are totally un- 
 productive of wealth. 
 
 There are two modes of viewing this 
 subject. Wealth may be regarded as con- 
 stituted by price or exchangeable value; 
 or it may be viewed in the real light in 
 which it ought to be considered, as con- 
 sisting in the abundance of the objects of 
 man's desire. 
 
 If we regard wealth to be constituted by 
 exchangeable value, and agree in the max- 
 im, that value is the basis of all riches, and 
 that an increase of value is an increase of 
 riches, there seems to be an end of the 
 question; for, in that view of the subject, 
 it is as impossible to contend, that the la- 
 bour of the manufacturer or artist does not 
 add something to the wealth of the nation, 
 as it is impossible to believe that a painter, 
 whose works have sold for thousands of 
 pounds, and the value of which has been 
 known to have increased for a century after 
 his death, added nothing more to the va- 
 lue of the canvas than the value of his sus- 
 
 10
 
 OF THE SOURCES OF WEALTH. 187 
 
 tenance, and an equivalent for the expehce 
 of his education. 
 
 If, on the other hand, wealth is consider- 
 ed as it ought to be, as consisting of the 
 greatest possible abundance of the objects 
 of men's desires, this question requires a 
 little further investigation. 
 
 It may be said, that, according to this 
 opinion, abundance, in proportion to de- 
 mand, constitutes wealth; but that abun- 
 dance, in proportion to demand, must al- 
 ways diminish price. It may even be said, 
 that it has been explained, how, if pushed 
 to an extreme, it must extinguish value ; 
 that as long, however, as exchangeable va- 
 lue exists unextinguished by public opu- 
 lence, the lowest possible price of all the 
 productions of art must be the sustenance 
 of the artist ; for without receiving this, he 
 could not exist : and it may be alleged, 
 that, on this principle, it therefore seems, 
 that the wages which denote the greatest 
 degree of public opulence in works of art, 
 are those which equal in vahie the subsist- 
 enceof the artist.
 
 138 OF THE SOURCES OF WEALTH. 
 
 The value really added by the manufac- 
 turer to the raw material, in the present 
 state of things, is, in this view of the sub- 
 ject, conceived to proceed from the scarci- 
 ty of manufacturing skill. Like the price 
 of monopoly, it is the highest that can be 
 got. The talent of the artist being rare, 
 from the small number of them that arrive 
 at perfection in the arts, is supposed to im- 
 pose a tax upon the public, which would 
 not exist if the nation had a greater num- 
 ber of them ; that is, if it possessed greater 
 opulence in artists : and it is undoubtedly 
 true, that it is possible to imagine talents 
 so multiplied, and the number of artists so 
 abundant, as to reduce the wages of paint- 
 ers and sculptors to be no more than what 
 is equivalent to their sustenance ; and that, 
 in this state, a nation would enjoy the 
 greatest possible degree of opulence in the 
 productions of art, consistent with the ex- 
 istence of exchangeable value. 
 
 But this is, unfortunately, a situation 
 which can exist only in imagination. The 
 monopoly arising from skill, talent, and
 
 OF THE SOURCES OF WEALTH. 139 
 
 genius, is not an evil proceeding from the 
 absurd regulations of man ; it is stamped 
 on the human species by the hand of na- 
 ture, and must exist as long as genius a- 
 dorns the world. 
 
 There is great difference in the value of 
 land. One field possesses much more in- 
 trinsic fertility than another ; and it is true, 
 that if a happy convulsion of nature was at 
 once to render the whole face of the earth 
 equally fertile, we should cease to remark 
 on the fertility of that favourite spot, on 
 the same principle that we should cease to 
 value the labour of the manufacturer and 
 the artist, if he was equalled in skill, taste, 
 and dexterity, by every common labourer. 
 But as long as the world remains constitut- 
 ed as it is, we must continue to admire the 
 fertility of the field, and to consider the la- 
 bour of the manufacturer and the artist as 
 productive. 
 
 It must also be remarked, that, even if 
 the nature of things were so far altered that 
 the works of the manufacturer and artist 
 should become so abundant in proportion
 
 140 OP THE SOURCES OF WEALTH. 
 
 to the demand for them as universally to 
 r€duce tlie wages of manufacturers and art- 
 ists to what in value was merely equiva- 
 lent to their sustenance, (if wealth truly 
 consists in the abundance of the objects of 
 man's desire,) we should be obliged, as long 
 as the love of conveniency and taste is in- 
 cident to mankind, to consider the manu- 
 facturer and artist as productive labour- 
 ers, on the same principle that we have 
 regarded water as an article of public 
 wealth. 
 
 In truth, it is only from the circumstance 
 of confounding wealth and riches, and con- 
 sidering wealth, in the course of their rea- 
 soning, at one time as depending on ex- 
 changeable value, and at another as consti- 
 tuted by the abundance of the objects of 
 man's desire, that this doctrine of the eco- 
 nomists can for a moment be maintained. 
 For supposing that an artist or manufac- 
 turer added only the value of his mainte- 
 nance to the raw material, if wealth is to 
 be understood in its true sense, his labour, 
 even in this case, must be considered as
 
 OF THE SOURCES OF WEALTH. 141 
 
 productive of wealth. The nourishment on 
 which he subsists is wealth, because it is an 
 object of man's desire. In satisfying the 
 desire of the labourer, it has fulfilled the 
 duty it is destined to perform ; whilst, on 
 the other hand, in consequence of the form 
 given to the raw material by his industry, 
 a distinct portion of wealth is brought into 
 existence, ready to satisfy the desire of some 
 other individual ; so that, admitting that at 
 no one period there existed, in consequence 
 of his industry, an additional value, still it 
 is evident that, in consequence of the in- 
 dustry of the manufacturer, there is a por- 
 tion of desire satisfied, and of course a por- 
 tion of wealth created, which would not 
 otherwise have existed. 
 
 These philosophers hold, (and it is a ne- 
 cessary inference from their doctrine,) tlmt 
 it is immaterial to a country whether a web 
 of cloth is exported in exchange for foreign 
 commodities, or whether the same commo- 
 dities are acquired by exporting the wool 
 of which the cloth is made, and the food on 
 which the weaver has existed. Nay, the v
 
 142 OF THE SOURCES OF WEALTH'. 
 
 even conceive, that the exportation of the 
 raw materials is the most advantageous » * 
 There is obviously, however, a material dif- 
 ference ; for, in the former case, the coun- 
 try acquires as much of foreign commodity 
 as in the latter ; and, besides that, one 
 of its inhabitants is maintained : that 
 is, he has enjoyed his share of public 
 wealth, hy obtaining the objects of his de- 
 sire. 
 
 By the author of the Wealth of Nations, 
 the manufacturer and the artist are indeed 
 admitted to be productive labourers ; and, 
 in this respect the distinction he makes be- 
 twixt productive and unproductive labour, 
 is less repugnant to the prevalent opinions 
 of men ; but a little examination will shew 
 that it is not more consonant to reason. 
 
 * " Si I'un conbldeie simplemeiit le commerce d'exportation 
 " dans un royaume agricole, qui peut deveiiird'un grand com- 
 " merce exterieur des denrees du cru, lequel doit etre favorise 
 " preferablement h tout autre." — '* If one considers merely the 
 " commerce of exportation in an agricultural kingdom, that 
 " can acquire a great external commerce, by disposing of its 
 •' raw materials, which ought to be favoured in preference of 
 " every other species of commerce." Philosopliie Riircde, p. 
 371.
 
 OF THE SOURCES OF WEALTH. 143 
 
 He considers as unproductive labourers 
 all thos'e whose " services perish in the very 
 " instant of their performance, and does 
 " not fix or realize itself in any vendible 
 " commodity, which can replace the value 
 '* of their wages and maintenance." * Pro- 
 ductive labour, on the contrary, he describes 
 as " fixing and realizing itself in some par- 
 " ticular subject and vendible commodity. 
 " It is as it were a certain quantity of la- 
 " bour stocked and stored up, to be em- 
 " ployed, if necessary, upon some other oc- 
 " casion. That subject, or, w^hich is the 
 " same thing, the price of that subject, can 
 " afterwards, if necessary, put into motion 
 " a quantity of labour equal to that which 
 " had originally produced it." f 
 
 Unfortunately, however, a little consider- 
 ation makes this distinction appear nowise 
 founded on the nature of labour, but mere- 
 ly dependant upon the use that is made of 
 its produce. This the same labour may 
 
 * Wealth of Nations, Vol. 11. p. 273. 4to edit. 
 + Ibid. Vol. I. p. 401.
 
 144- OF THE SOURCES OF WEALTH. 
 
 appear either productive or unproductive, 
 according to the use subsequently made of 
 the commodity on which it was bestowed. 
 If my cook, for example, makes a tart which 
 I immediately consume, he is considered as 
 an unproductive labourer ; and the act of 
 making the tart as unproductive labour; 
 because that service has perished at the mo- 
 ment of its performayice ; but if the same 
 labour is pe;rformed in a pastry cook's 
 shop, it becomes productive labour, because 
 it is a quantity/ of labour stocked and stored 
 uj), to be employed^ if necessary^ upon some 
 other occasion ; the price of it, if necessary^ 
 can afterwards put into motion a quantity of 
 labour equal to that which had originally pro^ 
 duced it. Again : A piece of cloth burnt 
 immediately after it was formed, would in- 
 evitably bestow, according to this defini'- 
 tion, the character of unproductive on the 
 labour of the cloth-manufacturer. Thus, 
 a tart being placed in a cook's shop, would 
 give to the labour of the cook the charac- 
 ter of productive, and the cloth being put
 
 OF THE SOURCES OF WEALTH. 145 
 
 in the fire, bestows that of unproductive on 
 the labour of the manufacturer. 
 
 This extraordinary distinction, founded 
 on the i^ere durability of the services per- 
 formed, classes as unproductive labourers, 
 some of those who are occupied in render- 
 ing the most important services to society. 
 Thus the Sovereign, and all who are em- 
 ployed in the maintenance of the religion, 
 the justice, or the defence of the state, as 
 well as those whose skill and care are oc- 
 cupied in superintending the health and 
 education of the society, are alike deemed 
 unproductive labourers. * 
 
 If exchangeable value is to be consi- 
 dered as the basis of wealth, it is need- 
 less to use much argument to explain the 
 errors of this doctrine. The practice of 
 mankind, in estimating these services, if we 
 can judge by what is paid for them, bears 
 sufficient testimony of its inaccuracy. 
 
 If, on the other hand, wealth is regard- 
 ed in its true light, as consisting of the 
 
 * Wealth of Nations, Vol. I. p. 401, 4to edit. 
 K
 
 146 OF THE SOURCES OF WEALTH. 
 
 abundance of the objects of man's desire, it 
 is impossible to discern why that should not 
 be considered as wealth which tends to the 
 satisfaction of man's immediate desires, as 
 well as that which is stocked and stored up 
 for the satisfaction of his future desires. It 
 is curious that the theory of the econo- 
 mists should have led them to exclude the 
 grain reserved for seed from forming a 
 portion of wealth, because devoted to the 
 formation of what is to administer to our 
 future desires ; whilst, on the other hand, 
 the author of the Wealth of Nations ex- 
 cludes the labour of the class he describes 
 as unproductive labour, merely because it 
 contributes to the satisfaction of the imme- 
 diate desires of those who employ them. 
 
 In truth, however, be cannot maintain 
 this opinion with any degree of consist- 
 ency, for there is no one who has ridi- 
 culed the idea of considering the durability 
 of commodities as the criterion of their 
 value, with greater acrimony, than the 
 person who makes this distinction be- 
 twixt productive and unproductive labour,
 
 OF THE SOURCES OF WEALTH. liy 
 
 grounded upon the duration of its pro- 
 duce. " We do not (says he) reckon that 
 " trade disadv intageous, which consists in 
 " the exchange of the hardware of Enojland 
 " for the wines of France, and yet hardware 
 " is a very durable commodity, and was it 
 " not for this continual exportation, might, 
 " too, be accumulated for ages together, to 
 " the inci edible augmentation of the pots 
 " and pans of the country." * Again : it is 
 a losing trade, it is said, " which a work- 
 " man carries on with the ale-house ; and 
 ** the trade which a manufacturing nation 
 " would naturally carry on with a wine 
 " country, may be considered as a trade 
 " of the same nature. I answer, that the 
 " trade with the ale-house is not necessa- 
 " rily a losing trade." f 
 
 It appears, therefore, impossible to con- 
 tend, that the labour of the manufacturer 
 and artist, or even the labour of that class 
 whose services perish at the moment, are 
 
 * Wealth of Nations, Vol. 11. p. 15. 4to edit. 
 \ Ibid. p. 80.
 
 148 OF TJIE SOURCES OF WEALf S. 
 
 not, as well as that of the husbandman, to 
 be considered as productive of wealth. The 
 comparative degree of utility of different 
 descriptions of labour in producing wealth, 
 is a subject which will be more properly 
 discussed in treating of the means of in- 
 creasing wealth. 
 
 3. Of Capital^ as a Source of Wealth* 
 
 In treating of land as a source of wealth, 
 it was unnecessary to enter into any discus-^ 
 sion of the means by which it contributes 
 towards the public stock. These it evident- 
 ly derives from the produce of mines and 
 fisheries, and from the materials for food 
 and clothing that abound on the face of the 
 earth. This discussion was equally unne- 
 cessary in treating of labour as a source of 
 wealth. It is clear, that the labour of the 
 husbandman contributes to the formation 
 of wealth, by means of the increased ferti- 
 lity he creates ; and though it has been dis- 
 puted whether the manutacturer and me-
 
 OF THE SOURCES OF WEALTH. 14D 
 
 nial servant produce wealth, by adapting 
 and preparing the raw material for our 
 convenient consumption, yet it is self-evi- 
 dent, that if they increase the wealth of the 
 nation, it is by giving form to the raw ma- 
 terial, and preparing it for use. 
 
 By what means capital or stock contri- 
 butes towards wealth is not so apparent. 
 What is the nature of the profit of stock? 
 and how does it originate ? are questions 
 the answers to which do not immediately 
 suggest themselves. They are, indeed, 
 questions that have seldom been discussed 
 by those who have treated on political eco- 
 nomy ; and, important as they are, they 
 seem nowhere to have received a satisfac- 
 tory solution. 
 
 The author of the Wealth of Nations 
 appears to consider the profit of stock, as 
 paid out of, and therefore derived from, 
 the value added by the workman to the 
 raw material. He states, that — " As soon. 
 " as stock has accumulated in the hands of 
 " particular persons, some of them will na- 
 " turally employ it in setting to work in-
 
 l50 
 
 OF THE SOURCES OF WEALTH. 
 
 " dustrious people, whom they will supply 
 " with materials and subsistence, in order 
 " to make a profit by the sale of their 
 " work, or by what their labour adds to 
 " the value of the materials. In exchang- 
 " ing the complete manufacture, either for 
 *' money, for labour, or for other goods, 
 " over and above what may be sufficient 
 " to pay the price of the materials, and the 
 " wages of the workmen, something must 
 " be given for the profits of the undertaker 
 " of the work who hazards his stock in this 
 " adventure. The value which the work- 
 " men add to the materials, therefore, re- 
 <« solves itself, in this case, into two parts, 
 " of which the one pays their wages, the 
 " other the profits of their employer upon 
 " the whole stock of materials and wages 
 " which he advanced." * And again, " The 
 " labour of a manufacturer adds generally 
 " to the value of the materials which he 
 " works upon, that of his own maintenance 
 " and of his master's profit." f 
 
 • Wealth of Nations, Vol. I. p. 57, 4to edit, 
 f Ibid. p. 400. The following passage also clearly shows 
 that Jjr Smith thought the profit of stock was a value added
 
 f 
 
 OF THE SOURCES OF WEALTH. 151 
 
 Above a century ago, Mr Locke stated 
 pretty nearly the same opinion. " Land," 
 says he, " produces naturally something 
 " new and profitable, and of value to man- 
 " kind ; but money is a barren thing and 
 '^ produces nothing ; but by compact trans- 
 " fers that profit that was the reward of 
 " one man's labour into another man's 
 " pocket." * 
 
 If this, however, was a just and accurate 
 idea of the profit of capital, it would fol- 
 low, that the profit of stock must be a deri- 
 vative, and not an original source of reve- 
 nue ; and capital could not therefore be 
 considered as a source of wealth, its profit 
 being only a transfer from the pocket of 
 
 by the labourer : '* The stock which is lent at interest is always 
 *' considered as a capital by the lender. He expects that in 
 " due time it is to be restored to him, and that in the mean 
 " time the borrower is to pay him a certain annual rent for the 
 '• use of it. The borrower may use it either as a capital, or 
 " as a stock reserved for immediate consumption. If he uses 
 " it as a capital, he employs it in the maintenance of produc- 
 " tive labourers, who reproduce the value with a profit." 
 Wealth of Nations, Vol. I. p. 42ff. 
 
 • Some Considerations of the Consequence of lowering In- 
 terest, and raising the Value of Money. Edition I692, p. 55|,
 
 152 OF THE SOURCES OF WEALTH. 
 
 the labourer into that of the proprietor of 
 stock. 
 
 The ingenious author of the Treatise on 
 the Formation and Distribution of Riches, 
 seems to think, that a proprietor of stock 
 is entitled to a compensation for what his 
 capital would have produced him, had he 
 employed it in the acquisition of land. * 
 But this in practice is known not even to 
 furnish a rule for the quantum of profit. 
 
 This account of the origin of capital, however unsatisfac- 
 tory, is also given by Sir William Petty, as well as many other 
 authors. 
 
 " Question 28. What is interest or use-money ? Answer. 
 " A reward for forbearing the use of your own money for a 
 *' term of time agreed upon, Avhatsoever need yourself may 
 " have of it in the mean while." 
 
 Sir William Petty's Quantiilumcunque, concerning money. 
 
 " Money was at all times, and in all places, admitted to be 
 " an equivalent for houses and lands ; and houses and lands 
 *' were always admitted to possess the quality of producing a 
 " rent. Now, if houses and lands do (of natural right) ac- 
 " tually possess this-quality of producing a rent, and money be 
 ** actually an equivalent for houses and lands, it must neces- 
 " sarily follow that money must (by the same natural right) 
 " possess the quality of producing a rent also." Essay on the 
 Nature and Principles of Public Credit. By S. Gale, printed 
 1784, p. 15. 
 
 * Reflection sur la Formation et Distribution des Richesses. 
 Par M. Turgot, ^60
 
 OF THE SOURCES OF WEALTH. 158 
 
 and certainly gives no idea, how or from 
 whence it originates. 
 
 Capital is so variously employed, that in 
 order to convey a just and distinct idea of 
 the mode in which, under all circumstan- 
 ces, it becomes entitled to a profit, it is ne- 
 cessary to enumerate the different uses to 
 which it may be devoted. 
 
 1. It may be employed by the manufac- 
 turer in building and obtaining machinery. 
 
 2. It may be employed in procuring and 
 conveying to the manufacture the raw ma- 
 terials, in advance of wages, or conveying 
 the manufactured commodity to the mar- 
 ket, and furnishing it to the consumer 5 that 
 is, in the home-trade. 
 
 3. It may be employed either in the im- 
 portation of the commodities of another 
 country, or the exportation of home-manu- 
 factures ; that is, in foreign trade. 
 
 4. It may be employed in agriculture, 
 
 5. There is a part of the capital of every 
 country employed merely for the purpose 
 of circulation ; a greater or a smaller pro- 
 portion of which is necessary for conduct-
 
 154 OF THE SOURCES OF WEALTH. 
 
 ijig the transactions of every member of 
 the community. 
 
 In enumerating the various modes in 
 which capital may be employed, with a 
 view to consider how it becomes entitled 
 to a profit, it is unnecessary to state that of 
 lending it on landed, and that of lending 
 it on personal security. If lent to the pro- 
 prietor of land, the owner of the capital 
 becomes, under certain conditions, a partr 
 ner and joint proprietor in t|je land. If 
 lent to a person who has no land, the pro- 
 prietor of the capital, under similar condi- 
 tions, becomes a sharer either in the pro- 
 fits of professional labour, or of stock, ac- 
 cording as the borrower derives his revenue 
 from his labour or his capital. Thus the 
 profit which capital lent out acquires, is a 
 transfer from one to another of what al- 
 ready exists, and cannot, therefore, proper- 
 ly, be said to be produced. 
 
 It appears, then, that every means of 
 employing capital, so as to produce a pro- 
 fit, is described under some one of these five 
 modes enumerated, by which capital be-
 
 OF THE SOURCES OF WEALTH. 155 
 
 comes entitled to a profit. On examina- 
 tion, we shall find, that even when so em- 
 ployed, part of its profit, in some cases, 
 may be more properly said to be acquired 
 than produced. 
 
 Now, it is apprehended, that in every in- 
 stance where capital is so employed as to 
 produce a profit, it uniformly arises, either 
 — -from its supplanting a portion oj labour, 
 which would otherwise be performed by the 
 hand of man ; or, — from its performing a 
 portion oj labour^ which is beyond the reach 
 of the fcrsonal eocertioii of man to accom-r 
 plish. 
 
 1. Of the Method in xchich that Portion of 
 Capital produces its Profit, which is em- 
 ployed in Building and obtaining Machi- 
 nery, 
 
 There is no part of the capital of a coun- 
 try, that more obviously derives its profit 
 from supplanting a portion of labour that 
 would otherwise be performed by man, or
 
 156 OF THE SOURCES OF WEALTH. 
 
 from performing a portion which is beyond 
 the reach of his personal exertion, than that 
 which is vested in machinery. That man 
 uses capital in the form of machinery to 
 supplant labour, is one of the peculiarities 
 and distinguishing features of his charac- 
 ter. If it was not for this singular faculty, 
 his efforts to provide for his wants, like 
 those of the other animals, would be bound- 
 ed by what his hands, his teeth, and his 
 feet, could enable him to accomplish. 
 
 That we may perceive how the profit of 
 capital thus employed arises from supplant- 
 ing labour, let us consider the effect of ca- 
 pital vested in machinery, iruthat first em- 
 ployment of man, the cultivation of the 
 ground. The moment he places a portion 
 of capital in the acquisition of a spade, one 
 man must obviously, in the course of a day, 
 be able, with his spade, to prepare as much 
 land for receiving seed, as fifty could, by 
 the use of their nails. Thus, this portion 
 of capital supplants the necessity of the la- 
 bour of forty-nine men. In the progress 
 of things, a portion of the national capital
 
 OF THE SOURCES OF WEALTH. 157 
 
 domes to be invested in a plough ; and one 
 man, with his plough, will prepare as much 
 land for the reception of seed as perhaps 
 six could with their spades. Thus, that 
 portion of capital invested in a plough, sup- 
 plants the necessity either of the labour of 
 five diggers, or of two hundred and ninetv- 
 nine men reduced by absolute want of ca- 
 pital to use their nails. 
 
 Again, if we consider the employment 
 of capital in the formation of machinery, 
 in one of the operations the most familiar, 
 " — that of makmg stockings ; the wires em- 
 ployed in knitting, the first means of stock- 
 ing-making, affords a simple instance of a 
 portion of capital employed in executing 
 labour beyond the reach of the power of 
 man to accomplish ; as without such assist- 
 ance, we could hardly suppose him capable 
 of making a pair of stockings. But, in the 
 further progress of this art, a part of the capi- 
 tal of the country becomes vested in a stock- 
 ing-loom ; * and the profit of the capital 
 
 * It is contended in France, that the first stocking-loom 
 was introduced by Jean Hmdrct, in the year 1^56, in his ma-
 
 158 OF THE SOURCES OF WEALTH, 
 
 SO employed, is derived from the stocking- 
 loom's supplanting the labour of a number 
 of knitters. That this is the source of the 
 profit arising from the machine, appears 
 clearly from the circumstance, that the 
 wages x)£ those knitters whose labour it 
 supplants, form, on the one hand, the mea- 
 sure of the utmost possible extent the pro- 
 prietor of the machine can charge ; and, on 
 the other, the ground on which mankind 
 judge of the utility of the invention. 
 
 Supposing, for example, one man with a 
 loom should be capable of making three 
 pair of stockings a-day, and that it should 
 require six knitters to perform the same 
 work with equal elegance, in the same 
 time ; it is obvious, that the proprietor of 
 the loom might demand, for making his 
 three pair of stockings, the wages of five " 
 knitters, and that he would receive them ; 
 
 nufactory at the Chatteau de Madrid, Bois de Bouloigne. The 
 Frame-work Knitters Company, attributing the invention to 
 William Lee ot St John's College, Cambridge, have adopted, 
 as one of the supporters to their arms, a Master of Arts in his 
 wown and cap. See Anderson's History of Commerce, and 
 Encyclopedic, Article Bus. 
 
 n
 
 OF THE SOURCES OF WEALTH. 159 
 
 because the consumer, by dealing with him 
 rather than the knitters, would save in the 
 purchase of the stockings the wages of one 
 knitter. But if, on the contrary, a stock- 
 ing-loom was only capable of making one 
 pair of stockings in three days, as, from the 
 hypothesis that three pair of stockings 
 could be finished by six knitters in one day, 
 it follows, that one knitter would make a 
 pair of stockings in two days ; the proprie- 
 tor of the loom could not dispose of his 
 stockings ; because he would be obliged to 
 charge one day's wages more than was paid 
 to the knitters ; and the machine, though it 
 executed the stockings in the greatest per- 
 fection, would be set aside as useless, mere- 
 ly because incapable of supplanting any 
 portion of labour. 
 
 The small profit which the proprietors of 
 machinery generally acquire, when com- 
 pared with the wages of labour, which the 
 machine supplants, may perhaps create a 
 suspicion of the rectitude of this opinion. 
 Some fire-engines, for instance, draw more 
 water from a coal-pit in one day, than could
 
 IfiO OF THE SOURCES OF WEALTH. 
 
 be conveyed on the shoulders of three hun- 
 dred men, even assisted by the machinery 
 of buckets ; and a fire-engine undoubtedly 
 performs its labour at a much smaller ex- 
 pence than the amount of the wages of 
 those whose labour it thus supplants. This 
 is, in truth, the case with all machinery. 
 All machines must execute the labour that 
 was antecedently performed, at a cheaper 
 rate than it could be done by the hand 
 of man ; otherwise they would inevitably 
 share the fate of the supposed stocking- 
 loom, which could manufacture only one 
 pair of stockings in three days, and be laid 
 aside as useless. 
 
 The actual profit drawn for the use of 
 any machine, when universally adopted, 
 must be regulated on the same principle 
 with the hire of a field, or the payment of 
 an artist, or the price of any other commo- 
 dity; that is, by the proportion betwixt 
 the quantity of machines that can be easily 
 procured, and the demand for them. But 
 that the profit of stock employed in the 
 machinery is paid out of a fund that would
 
 OF THE SOURCES OF WEALTH. l6l 
 
 otherwise be destined to pay the wages of 
 the labour it supplants, is evident ; be- 
 cause, if the proprietors of all the capital 
 so employed, would combine to charge a 
 greater sum for the use of the machines 
 than the wages of the labour supplanted, 
 they would be instantly set aside, and the 
 same portion of the revenue of the nation 
 again employed in the payment of wages, 
 that was so directed before the machines 
 were invented. 
 
 The case of a patent, or exclusive privi- 
 lege of the use of a machine, usually grant- 
 ed, as the law of England now permits, for 
 fourteen years, to reward an ingenious in- 
 vention, will tend further to illustrate this. 
 
 If such a privilege is given for the in- 
 vention of a machine, which performs, by 
 the labour of one man, a quantity of work 
 that used to take the labour of four; as the 
 possession of the exclusive privilege pre- 
 vents any competition in doing the work, 
 but what proceeds from the labour of the 
 four workmen, their wages, as long as the 
 patent continues, must obviously form the 
 
 I.
 
 l62 OF THE SOURCES OF WEALTH. 
 
 measure of the patentee's charge ; that is, 
 to secure employment, he has only to 
 charge a little less than the wages of the 
 labour which the machine supplants. But 
 when the patent expires, other machines 
 of the same nature are brought into com- 
 petition ; and then his charge must be re- 
 gulated on the same principle as every 
 other, according to the abundance of ma- 
 chines, or, (what is the same thing,) ac- 
 cording to the facility of procuring ma- 
 chines in proportion to the demand for 
 them. This alteration, however, in the 
 rule of charging, does not prevent the pro- 
 fit of the machine being received out of a 
 fund of the same nature of that which it 
 was paid from before the expirationo f the 
 patent ; to wit, from a part of the revenue 
 of the country, destined, antecedent to the 
 invention of the machine, to pay the wages 
 of the labour it supplants. * 
 
 * The theory of the Author of the Wealth of Nations made 
 him regard the profit of stock as derived from the labour of 
 the productive manufacturer; yet there are passages in his 
 work that strongly tend to confirm the opinion here maintain- 
 ed, for example : '* Both in the coarse and in the fine wool-
 
 OF THE SOURCES OF WEALTH. l63 
 
 Though, in confirmation of this opinion, 
 it is impossible to cite the theory of any 
 learned author who has treated of political 
 economy, it has, however, in its favour, 
 what is perhaps fully better j it derives 
 
 " len manufacture, the machinery employed was much more 
 ** imperfect in those ancient than it is in the present times. 
 " It has since received three very capital improvements, be- 
 " sides, probably, many smaller ones, of which it may be dif- 
 ** ficult to ascertain either the number or the importance. 
 " The three capital improvements are, first, The exchange of 
 " the rock and spindle for the spinning-wheel, which, with 
 '' the same quantity of labour, will perform more than double 
 " the quantity of work. Secondly, The use of several very 
 '' ingenious machines, which facilitate and abridge, in a still 
 " greater proportion, the winding of the worsted and woollen 
 *' yarn, or the proper management of the warp and woof, be- 
 *' fore they are put into the loom ; an operation which, pre- 
 " vious to the invention of those machines, must have been 
 " extremely tedious and troublesome. Thirdly, The employ- 
 " jnent of the fulling-mill, for thickening the cloth, instead of 
 " treading it in water. Neither wind nor water-mills of any 
 *' kind were known in England so early as the beginning of the 
 " sixteenth century, nor, so far as I know, in any other part 
 " of Europe north of the Alps. They had been mtroduced 
 *' into Italy some time before. 
 
 " The consideration of these circumstances may, perhaps, in 
 " some measure, explain to us why the real price both of the 
 " coarse and of the fine manufacture, was so much higher in 
 " those ancient than it is in the present times. It cose a great' 
 " er quantity of labour to bring the goods to market.'* Wealth 
 of Nations, Vol. I. p. 310. 4to edit. See also p. 306.
 
 I64i OF THE SOURCES OF WEALTH. 
 
 ample testimony of its truth from the con- 
 duct of the unlettered manufacturers them- 
 selves, as is sufficiently evinced by the riots 
 that have taken place on the introduction 
 of various pices of machinery, and particu- 
 larly at the time the ingenious machines for 
 carding and spinning were first set a-going. 
 
 2. Of the Method in which that Portion of 
 Capital produces its Profit, which is em- 
 ployed in procuring and conveying to the 
 Manufacturer the raw Materials, in ad- 
 vance of Wages ; or in conveying the ma- 
 nufactured Commodity to the Market, and 
 furnishing it to the Consumer; — that is, 
 in the Home Trade, 
 
 If it has been made evident, that the 
 share of the capital of a country vested in 
 machinery derives its profit from supplant- 
 ing labour, a little consideration will make 
 it equally clear, that the stock employed 
 in procuring and conveying to the manu- 
 facturer the raw materials in advance of
 
 OF THE SOURCES OP WEALTH. l65 
 
 wages, or in conveying the manufactured 
 commodity to the market, and furnishing 
 it to the consumers, derives the profit it 
 produces from the same source. The term 
 produces, is here purposely used ; because 
 it will appear, on analysing the grounds on 
 which the proprietors of this portion of na- 
 tional capital become possessed of their pro- 
 fit, that they are entitled to acquire a profit, 
 besides that which their stock can be pro- 
 perly said to produce. 
 
 That we may possess a clear view of the 
 manner in which this part of the national 
 capital becomes entitled to its profit, let us 
 suppose that all at once it was abstracted 
 from any society, and that each consumer 
 was obliged to perform himself the services 
 he now derives from the capital which is 
 employed in procuring and conveying to 
 the manufacture the raw materials in ad- 
 vance of wages, or in conveying the manu- 
 factured commodity to the market, and fur- 
 nishincr it to the consumer. 
 
 It is impossible, consistent wdth brevity, 
 accurately to trace all the steps a consumer.
 
 166 OF THE SOURCES OF WEALTH. 
 
 would be obliged to pursue to acquire any 
 commodity, if this part of the capital of a 
 country was abstracted ; and, fortunately, 
 it is only necessary to describe it generally, 
 so as, by giving a view of the nature of the 
 duty he would perform, to exhibit the me- 
 thod in which capital thus employed ac- 
 quires its profit. 
 
 As the national capital at present stands 
 appropriated, if a pair of stockings is want- 
 ed, they may be had by the consumer at 
 the shop of the hosier. But if the part of 
 the national capital which is employed in 
 conducting them into that situation, was ab- 
 stracted from any society, the consumer 
 would be obliged, in the first instance, to 
 quit his usual occupation, and repair to the 
 sheep-farmers, for the purpose of procuring 
 a quantity of wool. Having bought and 
 paid for the wool, he would be then under 
 the necessity of conveying it to the carder 
 and spinner, whose wages he must advance. 
 He would next be obliged to go in quest 
 of the thread, when spun, to convey it to 
 be dyed, and to pay the wages of the dyer.
 
 OF THE SOURCES OF WEALTH. l6j 
 
 Finally, he must undertake the task of con- 
 veying the thread from the dyer to the 
 stocking-maker, of paying him his wages, 
 and of carrying the stockings home. 
 
 On examining the task thus imposed on 
 the consumer, it seems to consist in two 
 different duties. 
 
 1. He is compelled, by abstracting this 
 part of the national capital, to withdraw 
 from his own stock the money with which 
 he pays the wool, that with which he pays 
 the carder and spinner, and that with which 
 he pays the dyer, some time before he ac- 
 quires the use of the stockings, which must 
 create a loss of the profit he might derive 
 by retaining this portion of capital in his 
 own employ. 
 
 2. He is obliged to perform the labour 
 requisite for selecting the wool, the labour 
 of carrying it to be carded and spun, the 
 labour of conveying it to the dyer, and 
 lastly, that of taking it to the stocking- 
 maker, and from thence home. 
 
 Now, these two duties, that would be 
 thus imposed on the consumer, by abstract-
 
 168 OF THE SOURCES OF WEALTH. 
 
 ing the portion of capital employed in pro- 
 curing and conveying to the manufacturer 
 the raw materials in advance of wages, or 
 in conveying the manufactured commodity 
 to the market, and furnishing it to the con- 
 sumer, give a just view of what is the source 
 of the profit of capital so employed. 
 
 1. It seems entitled to a profit, on ac- 
 count of the consumer's being saved the 
 necessity of an advance for payment of the 
 wool, &c. But this profit cannot properly 
 be said to be produced by the capital so em- 
 ployed ; the capital thus engaged in the 
 home trade can only be considered as hav- 
 ing a right to acquire it ; for this profit is 
 evidently produced by the stock which is 
 by this means allowed to remain in the 
 hands of the consumer, and arises from the 
 rent of land, if the consumer so employs his 
 capital, — from agriculture, if he employs it 
 in cultivating the land, — or from supplant- 
 ing some other species of labour, if he em- 
 ploys it as a stock in trade. 
 
 2. It is entitled to a profit, because it ex- 
 empts the consumer from the second class
 
 OF THE SOURCES OF WEALTH. l69 
 
 of duties that have been enumerated. This 
 profit it may be properly said to produce ; 
 and this is obviously produced by supplant- 
 ing that labour which he would otherwise 
 be compelled to perform. 
 
 Like the labour supplanted by stock vest- 
 ed in a machine, the value of these duties 
 combined, forms, on the one hand, the 
 measure of the utmost possible extent the 
 proprietor of this portion of capital can 
 charge ; and, on the other, the ground on 
 which mankind must judge of the utility of 
 its being so employed. 
 
 For example : let us suppose that the 
 consumer has made of profit from the mo- 
 ney which the existence of this capital 
 enables him to retain in his own em- 
 ploy, and which he would otherwise have 
 been obliged to advance for the pur- 
 chase of wool, &c. long before getting 
 his stockings into his possession, the sum 
 of sixpence ; and let us further suppose, 
 that the consumer values the labour it 
 saves him, at five shillings : the utmost pos- 
 sible charge the proprietor of the capital
 
 170 OF THE SOURCES OF WEALTH. 
 
 could make, over and above the payment 
 of the wool, and wages of the spinner, 
 dyer, and weaver, would be something un- 
 der five shillings and sixpence ; for if it ex- 
 ceeded this sum, the consumer would per- 
 form the duties himself, and the capital al- 
 lotted to be so employed would be regard- 
 ed as useless. 
 
 Again : though the charge might a- 
 mount to five shillings and sixpence, as 
 long as the competition in performing the 
 duty remained solely betwixt the consumer 
 of the stockings and one proprietor of 
 stock, yet, as the price of performing the 
 labour supplanted by a machine is at once 
 settled on a different principle, when a 
 number of machines come into competi- 
 tion ; so when a number of different pro- 
 prietors of stock present themselves for 
 performing these duties, the actual charge 
 is at once regulated in the same manner as 
 the charge for the machine, when a num- 
 ber of machines come into competition ; 
 and, indeed, on tlie same principle as the 
 price of all other things, it is determined
 
 OF THE SOURCES OF WEALTH. I7I 
 
 by the quantity of stock contending for the 
 performance of these duties in proportion 
 to the demand for it. 
 
 Finally, it must be remarked, that though 
 the proprietor of capital so employed saves, 
 by the use of it, the labour of the consumer, 
 he by no means substitutes in its place an 
 equal portion of his own ; which proves 
 that it is his capital, and not himself, that 
 performs it. He, by means of his capital, 
 perhaps does the business of three hundred 
 consumers by one journey; and carts, boats, 
 and a variety of other machinery, all tend- 
 ing to supplant labour, are applicable to the 
 large scale in which he deals, from which a 
 consumer could derive no benefit in procur- 
 ing for himself the small quantity adapted 
 to the satisfaction of his individual desires.
 
 172 Of the sources of wealth. 
 
 4. Of the Method in which that Portion of 
 Capital produces its Profit ^ which is em- 
 ployed either in the Importation of the 
 Commodities of another Country^ or the 
 Exportation of Home Manufactures ; — 
 that is, in Foreign Trade, 
 
 On this subject it is fortunately unne- 
 cessary to enter into so long a detail. The 
 same reasoning we have used to shew that 
 capital embarked in every branch of the 
 home trade uniformly derives its profit from 
 supplanting a certain portion of labour, is 
 equally applicable to capital embarked in 
 foreign trade. As the portion of labour sup- 
 planted by this description of capital is much 
 greater, if the competition existed solely 
 betwixt a single proprietor of stock and 
 the consumer, his charge might be much 
 higher. 
 
 Foreign trade is the exchange of the 
 commodities of one distant part of the 
 world for those of another, by which the 
 desires of man are gratified with things
 
 OF THE SOURCES OF WEALTH. I7S 
 
 which the habits of industry in another 
 country enable the inhabitants to produce 
 at a cheaper rate or of a better quah;y, or 
 with things that he could not obtain from 
 the soil around him, or in the climate in 
 which he lives. 
 
 As in every case of trade, whether fo- 
 reign o r domestic, the consumer, if there 
 existed no capital, must himself, in de- 
 tail, pay for, or perform, every expence 
 or portion of labour requisite to bring any 
 commodity into his possession in the shape 
 in which he desires it ; if the raw material 
 grows at a distance from him, and many of 
 the steps in the process of giving it form, 
 are conducted at a distance from one ano- 
 ther, the portion of labour which the use of 
 capital supplants must be greater. But the 
 profit of capital employed in foreign trade, 
 though it arises from supplanting labour, 
 comes to be regulated, not by the value of 
 the labour it supplants, but, as in all other 
 cases, by the competition among the pro- 
 prietors of capital ; and it will be great or 
 small in proportion to the quantity of capi-
 
 ly^i OF THE SOURCES OF WEALTH. 
 
 tal that presents itself for performing the 
 duty, and the demand for it. 
 
 Foreign trade, it must also be remarked, 
 in the shipping it employs, furnishes the 
 great example of capital engaged in per- 
 forming that species of labour which is be- 
 yond the reach of the powers of man to 
 accomplish ; for man, even with the small- 
 est quantity of any commodity, is inca- 
 pable of swimming from islands to the con- 
 tinent ; — from the old to the new world, 
 — and of performing those long voyages 
 which the modern skill in navigation ena- 
 bles the seaman to undertake. 
 
 The duty, however, which capital thus 
 performs, and by which it produces its pro- 
 fit, is so obviously of the same nature, that 
 it requires no explanation to shew that it 
 consists in labour. * 
 
 * The imagination of Voltaire has put into the mouth of 
 the Philosopher, in the dialogue betwixt a Philosopher and ^ 
 Comptroller of Finance, the following sentiment: — " Le com-' 
 *' mercejait le meme effet que le travail des mains."
 
 OF THE SOURCES OF WEALTH. 175 
 
 4. Of the Method in which that Portion of 
 Capital produces its Projit which is em- 
 ployed in Agriculture, 
 
 I^ABOUR is the only means of improving 
 the fertility of the earth. — 
 
 " Cursed is the ground for thy sake. In 
 " sorrow shalt thou eat of it all the days 
 " of thy life. Thorns also and thistles 
 *' shall it bring forth to thee : and thou 
 " shalt eat the herb of the field. In the 
 " sweat of thy face shalt thou eat bread." * 
 
 And true it is, that, by the exertions of 
 the labour of man alone, are food and ma- 
 terials for clothing extracted from the earth 
 in sufficient quantity to supply his wants. 
 
 In shewino; that stock vested in machine- 
 ry draws its profit solely from the circum- 
 stance of supplanting labour, the effect of 
 the spade and the plough, in which the 
 husbandman vests part of his capital, has 
 been already traced. It has been shewn, 
 
 * Genesis, chap. iii.
 
 176 OF THE SOURCES OF WEALTH. 
 
 that capital vested in those implements 
 alone derives its profit from supplanting a 
 portion of the labour that he would other- 
 wise be obliged to perform ; and the same 
 reasoning is applicable to explain how the 
 whole of his capital, vested in horses, carts, 
 or any other machinery, derives its profit 
 from the same circumstance. 
 
 " In a farm where all the necessary build- 
 " ings, fences, drains, communications, &c. 
 " are in the most perfect good order, the 
 " same number of labourers and labouring 
 «' cattle will raise a much greater produce, 
 " than in one of equal extent and equally 
 " good ground, but not furnished with 
 «' equal conveniences." * — Thus — ^* An im~ 
 " proved farm may very justly be regarded 
 ^' in the same light as those useful ma- 
 " chines which facilitate and abridge la- 
 " hour." f Though the Author of the 
 Wealth of Nations did not perceive that 
 capital vested either in agriculture or in 
 machinery derives its profit from supplant- 
 
 * Wealth of Nations, Vol. I. p. 343. 4to edit, 
 f Ibid. Vol. I. p. 335.
 
 OF THE SOURCES OF WEALTH. 177 
 
 ing labour ; yet it is evident from the pas- 
 sage here quoted, that he felt the similarity 
 of their effects ; and if, instead of regarding 
 the effect of a machine as facilitating la- 
 bour, or as increasing the productive powers 
 of labour, * (as he expresses it,) he had per- 
 ceived that capital vested in machinery ac- 
 quires its profit by supplanting labour, he 
 must have attributed the origin of the pro- 
 fit he here describes to the same circum- 
 stance. 
 
 But, indeed, all capital vested in any de- 
 partment of agriculture alike derives its 
 profit from this source. 
 
 If the farmer employs stock or capital in 
 manuring, that is, in mixing of soils, to in- 
 crease fertility, the benefit he derives from 
 it obviously consists in supplanting labour 
 he would otherwise be under the necessity 
 of performing, to procure the same quanti- 
 
 * It is a strange confusion of ideas that has led Dr Smith 
 to describe the operation of capital as increasing the produc- 
 tive powers of labour. The same process of reasoning would 
 lead a man to describe the effect of shortening a circuitous 
 road between any two given places, from ten miles to five 
 miles, as doubling the velocity of the walker. 
 
 M
 
 178 OF THE SOURCES OF WEALTH. 
 
 ty of produce. If by such process he can 
 double the fertihty of his field, the labour 
 employed in the cultivation of one acre 
 supplies the produce that would have been 
 drawn from the labour bestowed on two ; 
 and, by the fertility thus bestowed, sup- 
 plants the necessity of one- half of the la- 
 bour antecedently requisite. 
 
 If he vests his capital either in seed of a 
 particular quality, or in a stock of cattle 
 and sheep of a peculiar fattening kind, he 
 does this, that, with the same labour, he 
 may grow more corn, or produce more 
 beef or mutton. So truly does man's nou- 
 rishment depend on the sweat of his face, 
 that he can derive aid or assistance from 
 nothing in increasing the fertility of the 
 ground, but in proportion as it performs or 
 supplants a part of the labour which he 
 must otherwise of necessity submit to.
 
 OF THE SOURCES OF WEALTH. 179 
 
 5. Of the Method in which that Portion of 
 National Capital produces a Profit which 
 is employed in conducting Circulation. 
 
 In considering how that portion of the 
 national capital employed in conducting 
 circulation produces a profit, it is necessa- 
 ry clearly to distinguish what forms circu- 
 lating capital, from the goods that are cir- 
 culated by means of capital ; and this be- 
 comes the more so, because we are accus- 
 tomed to see these two things, however 
 different, almost uniformly confounded, by 
 those who have treated on the subject. * 
 
 In the manner in which the circulation 
 
 * In the Wealth of Nations, the circulating capital of a 
 country is stated to be composed of four parts. The first is de- 
 scribed as consisting of the money, by means of which all 
 the others are circulated and distributed; the author thus 
 plainly confessing, that the other three articles of which he 
 imagined circulating capital to be composed, are not employ- 
 ed in circulating, but are actually goods to be circulated. 
 They are, in fact, portions of what is reserved for consumption. 
 Wealth of Nations, p. 326.
 
 ] 80 OF THE SOURCES OF WEALTH. 
 
 of most European countries is at present 
 conducted, the circulating capital may be 
 properly regarded as composed either of 
 the coin, or of the substitutes for coin, 
 which banking, and the modern facilities of 
 conveying credit, have created. To these, 
 therefore, we confine our views ; conceiv- 
 ing them to form what may be, with strict 
 propriety, denominated the circulating ca- 
 pital of a country ; and a little examina- 
 tion will suffice to show, that gold and sil- 
 ver, as coin, are alone estimated by man 
 for their utility in supplanting labour, as 
 well as that the advantage which the pub- 
 lic derives from the improved method of 
 circulation, by means of banks, is founded 
 on the same principle. 
 
 Money is of use to mankind in two dif- 
 ferent capacities ; as an instrument of ex- 
 change ; and as a practical standard, by 
 which the value of all commodities is mea- 
 sured and expressed. To convey a clear 
 idea how the portion of the national capi- 
 tal employed in executing these two duties
 
 OF THE SOURCES OF ^VEALTH. 181 
 
 is profitable merely from the circumstance 
 of its supplanting labour, perhaps no better 
 method can be followed, than that which 
 was pursued in examining the foundation 
 of the profit of capital employed in the 
 home trade. 
 
 Let us then consider what would be the 
 effect of withdrawing from any society that 
 part of its capital which is employed in 
 conducting the circulation of goods, and 
 in forming a practical standard, by which 
 the value of commodities is measured and 
 expressed. 
 
 The moment this portion of the national 
 capital is abstracted from any society, the 
 exchange of those things which nature or 
 art enables one man to produce with great- 
 er ease or of better quality, for those things 
 which similar circumstances enable another 
 to produce with greater advantage, must 
 be conducted by barter. 
 
 A farmer, for example, who had in his 
 barn a quantity of wheat, much greater than 
 the consumption of his family, and who de-
 
 182 OF THE SOURCES OF WEALTH. 
 
 stined the overplus to supply the otlier ar- 
 ticles necessary for their clothing and nou- 
 rishment, if he wanted a pair of shoes, 
 would be obliged to proceed with a quan- 
 tity of his wheat to a shoemaker, to endea- 
 vour to negotiate an exchange ; but as it 
 might probably happen, that the first shoe- 
 maker he accosted, had already, in return 
 for shoes, obtained all the wheat he meant 
 to consume, he would be compelled to re- 
 main without shoes, till he could find a 
 shoemaker who wanted wheat. 
 
 If, unfortunately, the whole profession 
 were already supplied with wheat ; to ob- 
 tain a pair of shoes, he would be under the 
 necessity of endeavouring to discover what 
 was the article the shoemaker wished to 
 procure ; and if, on inquiry, it appeared 
 that beer was the commodity with which 
 the shoemaker wished to be supplied, the 
 farmer must then attempt to procure from 
 the brewer a quantity of beer in exchange 
 for his wheat, as a preliminary to his future 
 negotiation with the shoemaker.
 
 OF THE SOURCES OF WEALTH. 18S 
 
 But the brewer might also be supplied 
 with wheat ; which would oblige the farm- 
 er, in the first instance, to exchange his 
 wheat for some commodity the brewer 
 wanted, that with it he might purchase tlue 
 beer, with which he afterwards meant to 
 acquire his shoes. 
 
 Tedious as this process may appear, it is 
 one of the simplest cases that could be 
 stated, for the purpose of pointing out and 
 explaining the laborious path which every 
 man would be obliged to tread, in endea- 
 vouring to supply his wants by parting 
 with his superfluities in a country depriv- 
 ed of all circulating capital ; for it is plain, 
 that the course would often be infinitely 
 more tedious and intricate, before the 
 goods of one man could be repeatedly bar- 
 tered, till they at length became exchanged 
 for that particular commodity which ano- 
 ther wanted. 
 
 Neither is this the sole source of the la- 
 bour that would be imposed on man, by 
 withdrawing the capital employed in the
 
 184 OF THE SOURCES OF WEALTH. 
 
 conduct of circulation. As there would 
 then exist no general standard by which 
 the value of commodities was usually esti- 
 mated, an inquiry must of necessity take 
 place, in settling the terms of every parti- 
 cular exchange, to ascertain the relative 
 value of the goods to be bartered. 
 
 For example : if the brewer to whom the 
 farmer applied, wished to have some wheat, 
 and it so happened, that neither the farmer 
 had antecedently exchanged wheat for beer, 
 nor the brewer beer for wheat, they would 
 be at a loss to fix the quantity of wheat that 
 should be given for a gallon of beer. If, 
 indeed, each had luckily already procured 
 a leg of the same sheep in exchange for 
 the commodity they respectively possessed, 
 they might then discover the relative va- 
 lue of the wheat and the beer, because two 
 things, equal to one and the same thing, 
 are equal to one another ; but as it would 
 probably happen, that the farmer and brew- 
 er had never exchanged wheat and beer 
 for the same coijimodity, they could not
 
 OF THE SOURCES OF WEALTH; 185 
 
 have recourse to this easy mode of decid- 
 ing the portion of wheat that ought to be 
 parted with for the acquisition of a given 
 quantity of beer. The course, therefore, 
 the farmer would have to pursue, even af- 
 ter he had undergone the labour necessary 
 to discover a brewer who wanted wheat, 
 might be infinitely laborious, before he 
 could trace out, through the medium of va- 
 rious exchanges, some one interchange, 
 that afforded a point of comparison be- 
 twixt the value of the wheat and the beer. 
 
 If this, however, could not be discovered, 
 he would be obliged, as the only means of 
 ascertaining the terms of the exchange, to 
 institute an inquiry into the proportion be- 
 twixt the demand for, and the quantity of, 
 the beer, and also into the demand for, and 
 quantity of, the wheat ; these being the cir- 
 cumstances on which the relative value of 
 all commodities depends. 
 
 The beer being procured, it is plain, he 
 might be under the necessity of repeating 
 the same operation in negotiating the ex- 
 change for the shots.
 
 186 OF THE SOURCES OF WEALTH. 
 
 Thus, it is obvious, that the portion of 
 the capital of a country employed in con- 
 ducting circulation, is not only profitably 
 employed, by saving the labour of man, in 
 its character of an instrument for conduct- 
 ing exchanges, but also in its capacity of a 
 standard, for measuring the value of com- 
 modities. 
 
 It is not, perhaps, at first sight, so appa- 
 rent, that circulating capital is profitable to 
 mankind from the circumstance of sup- 
 planting labour, as it is that the profit of a 
 machine is derived from that source ; but 
 there is in reality no part of the capital of 
 a nation that supplants a greater portion of 
 labour, certainly none the benefit of which 
 in supplanting labour is more universally 
 enjoyed. 
 
 The labour of the manufacturer fixes 
 and realizes itself in some vendible com- 
 modity. Its existence as productive labour 
 is therefore more easily discernible than the 
 labour of the menial servant, whose ser- 
 vices generally perish at the instant of per-
 
 OF THE SOURCES OF WEALTH. 187 
 
 formance. The labour of a manufacturino: 
 machine, in like manner, fixes itself in 
 some vendible commodity, which makes 
 the origin of its profit more apparent than 
 that of circulating capital, whose services, 
 like that of the menial servant, perish at 
 the instant of their performance ; but 
 which, like his, too, remain at all times 
 prepared to supplant the necessity of ano- 
 ther portion of labour, which the master 
 must otherwise perform. * 
 
 Though coin, employed as circulating 
 capital, has been thus eagerly sought after, 
 not for the sake of the gold and silver it 
 
 * Neither the labour performed by the menial servant, nor 
 that of which the necessity is supplanted by circulating capi- 
 tal, do naturally stock, or store themselves up in such a man- 
 ner as to be transferred from one to another for a defined va- 
 lue. The profit of the one and the other alike arises from 
 saving the labour of the owner or master. The similarity is 
 indeed such, that it is natural to suppose the same circum- 
 stances which led the one to be deemed unproductive, would 
 naturally create the same impression with relation to the 
 other. Accordingly, the Author of the Wealth of Nations, 
 who conceives the labour of the menial servant to be unpro- 
 ductive, informs us, that *' the gold and silver money which 
 ** circulates in any country, and by means of which the pro-
 
 188 OF THE SOURCES OF WEALTH* 
 
 coutains, but merely on account of the la* 
 bour it supplants ; like other means of sup- 
 planting labour, it requires, though an in- 
 ferior, yet a certain portion of labour to 
 procure it. To carry it about, when pro- 
 cured, is also, from its bulk and weight, 
 laborious. To save these remaining por- 
 tions of labour, in conducting the circula- 
 tion of a country, various modifications of 
 banks have been successively introduced, 
 highly beneficial to the community in which 
 they have been established, from their sup- 
 planting the labour, formerly performed 
 by the Sovereign, of procuring coin, and 
 that performed by the subjects, of making 
 payments in it ; * and also from their exe- 
 cuting, with a machine of little value, the 
 
 *' duce of its land and labour is annually circulated, and tlis- 
 " tributed to the proper consumers, is, in the same manner 
 ** as the ready money of the dealer, ail dead stock. It is a 
 " very valuable part of the capital of the country, which pro- 
 " duces nothing to the country." Wealth of Nations, Vol. I. 
 p. 388, 4to edit. 
 
 • There are various passages in Mr Thornton's book on
 
 OF THE SOURCES OF WEALTH. 189 
 
 labour antecedently performed by a very 
 expensive Instrument. 
 
 From this last circumstance it is, that 
 most countries undoubtedly derive what 
 has been esteemed the greatest benefit they 
 enjoy from the modern improved method 
 of conducting the circulation of commodi- 
 ties. Yet it seems to be the desire of man 
 to supplant labour that we are indebted for 
 
 Paper Credit, which may be cited in confirmation of the pro- 
 Position, that supplanting of labour is the great object in the 
 introduction of all substitutes for coin.— For example : 
 
 " To speak first of Bills of Exchange. — It is obvious, that 
 '* however pi)rtable gold may be in comparison of any other 
 " article which might be made a measure of value, to carry it 
 '* in quantities to a great distance must prove incommodious. 
 *' Let it be supposed that there are in London ten manutac- 
 " turers, who sell their article to ten shopkeepers in York, by 
 '* whom it is retailed ; and that there are in York ten manu- 
 ** facturers of another commodity, who sell it to ten shop- 
 *' keepers in London. There would be no occasion for the 
 " ten shopkeepers in London to send yearly to York guineas 
 '< for the payment of the York manufactures, and for the ten 
 '< York shopkeepers to send yearly as many guineas to Lon- 
 *< don." He then proceeds to show the u^e of bills of ex- 
 change in supplanting labour. See p. 24. 
 
 Again, p. 54. " But further, if bills and bank-notes were 
 " extinguished, other substitutes than gold would u:iquestion- 
 '* ably be found. Recourse would be had to devices of va-
 
 190 OF THK SOURCES OF WEALTH. 
 
 the invention ; for banks, we are told, were 
 first introduced into Swedeland, * where 
 the money being all of copper, it was high- 
 ly inconvenient, by reason of its weight 
 and bulk, to carry it about in such quanti- 
 ties as was necessary to conduct exchan- 
 ges. 
 
 In truth, though a country may derive 
 much benefit from having a cheaper medi- 
 um of exchange, insomuch, that if there is 
 a scarcity of capital, it will by this means 
 have more or other uses ; yet this consi- 
 
 *' rious kinds, by Avhich men would save themselves the trouble 
 ^' of countings weighings and transporting guineas^ in all the 
 *' larger operations of commerce." See also the description he 
 gives, p. 55. of the inelhod in which London bankers make 
 payments to one another, calculated for no other purpose but 
 to supplant the necessity of a portion of labour which their 
 clerks would otherwise be obliged to perform. 
 
 * *' The use of banks has been the best method yet prac- 
 " tised for the increase of money. Banks have been used in 
 " Italy ; but, as I am informed, the invention of them was 
 " owing to Swedeland. Their money was copper, which 
 " was inconvenient by reason of its weight and bulk. To re- 
 " medy this inconveniency, a bank was set up, where the 
 " money might be pledged, and credit given to the value, which 
 " passed in -payments." Law on Money and Trade. Glas- 
 gow edit. p. 67, 
 
 11
 
 OP THE SOURCES OF WEALTH. 19l 
 
 deration never could form the motive of 
 any individual, for preferring one medium 
 of exchange to another. To the seller of 
 a commodity, the value of the medium of 
 exchange is perfectly indifferent, provided 
 he is sure it is in equal estimation with 
 those from whom he subsequently means 
 to purchase. A man can alone have an in- 
 terest in the value of what he produces, and 
 what he consumes : but coin or its substi- 
 tutes are never consumed ; they only pass 
 from one to another, for the purpose of 
 saving labour in the conduct of exchange ; 
 and the only immediate interest that he 
 who accepts a given quantity of any medium 
 of exchange can have, is, that it should save 
 as much labour as possible. It is on this 
 principle that silver is preferred to an equal 
 value of copper ; that gold, in making large 
 payments, is preferred to both ; and that 
 bills of exchange supplant, with advantage, 
 the use of the metals in extended commer- 
 cial concerns. * 
 
 * ** Bills of exchange are a most useful invention for con. 
 *' \'Pying money witb ease and safety from one part of the
 
 192 OF THE SOURCES OF WEALTH. 
 
 Had the ingenious Abbe Morellet writ- 
 ten for the purpose of* illustrating what is 
 here stated, he could not have given a more 
 desirable definition of paper-currency than 
 the following : " We understand by paper- 
 " money, every acknowledgment of debt 
 " or obligation ; in a word, every stipula- 
 " tion, by writing, betwixt a debtor and 
 " creditor, which obliges the former to 
 " pay, and authorises the latter to exact a 
 " value ; and which being capable of con- 
 " veyance, becomes a means of transfer- 
 " ring the property of these values from 
 " one to another, without transporting the 
 " things valuable in substance. 
 
 " It is plain, that this definition applies 
 " to all notes, bills, and every species of 
 ^^ bank-credit ; to securities granted by go- 
 
 " kingdom to another. In that light they may he said to re- 
 " semble a waggon carrying goods along a turnpike road, or 
 *' a boat on a canal. So that the imposing too high a stamp 
 " duty on bills of exchange produces just the same effect on 
 *' commerce, as the increase of tolls on a road, or of lockage 
 " dues." Memoir of the Bankers in Scotland, respecting the 
 proposed additional stamp duties on bills of exchange and 
 promissi»ry notesj circulating as bank notes. 1801. 
 4
 
 OF THE SOURCES OF WEALTH» 19S 
 
 *"'* v^ernments for money borrowed, a8 well 
 " as to all securities for money advanced in 
 " speculations of commerce or finance : fi- 
 " nally, to credit given by one individual to 
 " another, in the form of bills of exchange, 
 " promissory -notes, orders, &c. &c." * 
 
 But it is not alone when employed in the 
 useful and beneficial purposes of commerce, 
 manufactures, agriculture, and the conduct 
 of exchanges, that capital, serves man, by 
 supplanting or performing labour. After 
 the explanation given, without involving 
 the reader in any additional detail, his own 
 imagination will at once suggest how these 
 immense capitals, squandered in the mo- 
 dern conduct of mischievous, but perhaps 
 unavoidable warfare, are alone profitable 
 to the community, upon the same prin- 
 ciple. 
 
 From this short examination, it appears 
 that capital, whether fixed or circulating, 
 whether embarked in the home or in fo- 
 reign trade, far from being employed in 
 
 * Prospectus d'un Nouveaux Dictionnaire de Commerce, p. 
 84-, For the original see Appendix, No, III. 
 
 N
 
 104) OF THE SOURCES OF WEALTH. 
 
 putting labour into motion, or in adding^ 
 to the productive powers of labour, * is, on 
 the contrary^ alone useful or profitable ta 
 mankind, from the circumstance of its ei- 
 ther supplanting the necessity of a portion of 
 labour, that would otherwise be perfojrmed by 
 the hand of man, or of its executing a portion 
 of labour, beyond the reach of the powers of 
 man to accomplish ; and this is not a mere 
 criticism on words, but a distinction in it- 
 self most important. 
 
 The idea that capital puts labour into mo- 
 tion, that it adds to the productive powers 
 of labour gives rise to the opinion that la- 
 bour (which, it will afterwards be shown, is 
 the great means of increasing wealth) is 
 every where proportioned to the quantity 
 of existing capital ; f that the general in- 
 dustry of a country is always proportioned 
 to the capital that employs it ; % ^^^ there- 
 fore authorizes the inference, that the in- 
 
 • Wealth of Nations, Vol, I. p. 437, 441, 445. 4to edit., 
 and in many other passages. 
 
 f Wealth of Nations, Vol. I. p. 3. 4to edit. See also p, 
 329. 
 
 X Ibid. Vol. II. p. 37.
 
 OF THE SOURCES OP WEALTH. 195 
 
 crease of capital is the sovereign and un- 
 bounded means of augmenting wealth. 
 Whereas the opinion, that capital can alone 
 be employed with utility and advantage in 
 supplanting or performing labour, natu- 
 rally suggests the inference, that a coun- 
 try cannot be benefited by the posses- 
 sion of a greater portion of capital than 
 can be employed in performing and sup- 
 planting labour, in the production and for- 
 mation of those things for which there ex- 
 ists a demand. 
 
 Neither is this the only important er- 
 ror into which the author of the Wealth 
 of Nations has been led, by consider- 
 ing capital as adding to the productive 
 powers of labour. The impossibility of 
 regarding capital employed in the con- 
 duct of circulation ; for example, gui- 
 neas, as adding to the productive powers of 
 the labour of those who take them in ex- 
 change, has led him to represent all circu- 
 lating capital as totally unproductive of pro- 
 fit, and as, in reality, an article of expence
 
 196 OF THE SOURCES OF WEALTH. 
 
 to the community. Though, from what 
 has been said, it must appear certain that 
 there is no mode in which capital can be 
 employed, from which the community, in 
 consequence of the great portion of labour 
 it supplants, derives a greater profit. 
 
 Having thus analyzed and explained the 
 nature and origin of the profit on stock, 
 having attempted to make manifest, that 
 as land produces profit by means of its 
 produce, and that as labour produces pro- 
 fit by increasing the quantity, and melio- 
 rating the quality of the productions of 
 nature, and by giving it form adapted for 
 consumption, so capital is productive of 
 profit, either by supplanting a portion of la- 
 bour which would otherwise be performed 
 by the hand of man, or by performing a 
 portion of labour which is beyond the 
 reach of his powers to accomplish ; in 
 pursuance of the plan adopted, we should 
 be naturally led to investigate how iar the 
 profit of stock, the nature of which has 
 been explained, is to be ranked, along witk
 
 OF THE SOURCES OF WEALTH. 197 
 
 the produce of land, and the exertions of 
 labour, as a source of wealth. 
 
 But the investigation in which we have 
 been engaged seems to preclude the neces- 
 sity of entering into any detail on this sub- 
 ject ; for if we have been successful in show- 
 ing that labour, in all its varieties, is more 
 or less productive of wealth, it follows, that 
 capital^ the profit of which arises from per- 
 forming, with great advantage to mankind, 
 labour, which has already been proved to 
 contribute towards wealth, must also be re- 
 garded as a source of wealth.
 
 CHAP. IV. 
 
 OF PARSIMONY, AS A MEANS OF INCREASING 
 WEALTH. 
 
 The sources of national wealth having been 
 examined and ascertained, it would seem 
 that we might proceed, without further in- 
 vestigation, to consider the different effects 
 of the produce of land ; of the exertions 
 of labour and of capital, supplanting and 
 performing labour, in increasing wealth ; 
 these being the sole sources of wealth, and 
 therefore the only means of increasing it. 
 For, as animals are only multiplied by the 
 means by which they are produced ; as ve- 
 getable substances also can only be increas- 
 ed by the means by which they are pro- 
 duced, as a greater quantity of metals, and 
 other productions from the bowels of the
 
 OF PARSIMONY, AS A MEANS, kc. 19^ 
 
 earth, are to be acquired by no other means, 
 but an increase of that labour which pro- 
 cures them ; and as an increased quantity 
 of raw materials can only acquire the form 
 that adapts them for consumption, by a 
 more frequent repetition, or skilful exer- 
 tion, of the labour that gives them form ; 
 so wealth, it might be reasonably inferred, 
 could alone be increased by the means by 
 which it is produced. 
 
 But popular prejudice, which has ever 
 regarded the sum-total of individual riches 
 to be synonymous with public wealth, and 
 which has conceived every means of in- 
 creasing the riches of individuals, to be a 
 means of increasing public wealth, has 
 pointed out parsimony, or accumulation by 
 a man's depriving himself of the objects of 
 desire to which his income entitles him, 
 (the usual means of increasing private for- 
 tune,) as the most active means of augments 
 ing public wealth. 
 
 When we reflect that this abstinence 
 from expenditure, and consequent accu- 
 mulation, neither tends to increase the pro-
 
 fOO OF PAK SIMONY, AS A MEANS 
 
 duce of land, to augment the exertions of 
 labour, nor to perform a portion of labour 
 that must otherwise be executed by the 
 hand of man ; it seems that we might be 
 entitled at once to pronounce, that accumu- 
 lation may be a method of transferring 
 wealth from one member of a community 
 to another ; but that it cannot be a method 
 of increasing public wealth, because wealth 
 can alone be increased by the same means 
 by which it is produced. 
 
 But when the public prejudice is con- 
 firmed by men most admired for talents ; 
 when we are told by the most esteemed 
 authority, that capital can only be aug- 
 mented in proportion to what can be saved 
 out of the revenue ; * that every prodigal is 
 a public enemy, and every frugal man a 
 public benefactor ; f that parsimony and 
 not industry increases capital, (meaning 
 wealth ; J) and that, as frugality increases, 
 and prodigality diminishes, the public ca- 
 
 * Wealth of NatiosT!, Vol II. p. 37. 4to edit. 
 
 •t Ibid. Wi. I. p. 414. 4to edit. 
 
 I Ibid, Vol, 1, p. 421. See also p. 446.
 
 OF INCREASING -VVEALTH. 201 
 
 pital, SO the conduct of those whose ex- 
 pence just equals their revenue, neither in- 
 creases nor diminishes it ; * it becomes ne- 
 cessary to enter into a more minute exami- 
 nation of this opinion : and the more so, 
 as it has given birth to an erroneous system 
 of legislation, which, if persisted in, must 
 infallibly ruin the country that adopts or 
 perseveres in it. 
 
 The means by which stock or capital 
 acquires profithave been already investigat- 
 ed. It has been shown that it is uniformly 
 profitable to man, by supplanting the ne- 
 cessity of a portion of labour, he must other- 
 wise perform, or by performing a portion 
 of labour beyond the reach of his power ; 
 and it does not require much consideration 
 to discover what it is that executes this 
 labour ; — it is obviously a part of the pro- 
 duce of the earth, or a part of the earth it- 
 self, to which either nature or art has 
 
 * This (pinion concerning the salutary eft'ects of parsimony 
 is held by inany other writers on political economy ; morr 
 particularly by Turgot, in his treatise on the formation and 
 ilistribution ot riches. See from paragraph 49 to 83.
 
 SOS OF PARSIMONY, AS A MEANS 
 
 given a form that renders it fit to supplant 
 labour. 
 
 If capital, however, in all its variety, ig 
 neither more nor less than a part of the 
 produce of the earth, or a part of the earth 
 itself, to which either nature or art has 
 given a form that adapts it for supplanting 
 or performing a portion of labour ; let us 
 consider, whether a country can increase 
 its wealth, by appropriating to this duty a 
 portion of its labour, that ought naturally 
 to be employed in the reproduction of con- 
 sumable commodities, that is, in the forma- 
 tion of revenue. 
 
 For the sake of perspicuity, we shall 
 begin by examining the effects of accu- 
 mulation, in the most simple state of man's 
 existence, where capital has not yet assum- 
 ed all that variety of form, which man, in 
 the progress of society gives it, for the pur- 
 pose of performing labour ; though the 
 same observations will afterwards appear 
 applicable to societies, such as modern 
 Europe presents to our view ; where capi- 
 tal floats in all the variety of channels to
 
 OF INCREASING WEALTH. 203 
 
 which extended commerce destines it, and 
 where even the natm'al channels, in which 
 all property would fluctuate, are deranged 
 by overgrown financial arrangements. 
 
 When man exists in that state in which 
 he is chiefly occupied in agriculture, or the 
 cultivation of the land, and the wants of 
 his family are supplied, independent of all 
 commercial exchanges, by its own industry, 
 his property can alone consist in the land 
 he possesses, in the grain he annually pro- 
 duces, and the breeding stock, whose pro- 
 duce is reared for consumption ; and lastly, 
 in the animals and utensils he employs to 
 enable him to produce and consume his 
 wealth with less labour, — that isj in a more 
 satisfactory and comfortable manner to 
 himself In such a state, his property, there- 
 fore, divides itself into three different 
 branches. 
 
 1. The land he cultivates. 
 
 2. The stock he reserves for immediate 
 and remote consumption, under which is 
 comprehended the produce of his farm, 
 whether vegetable or animal.
 
 204 OF PARSIMONY, AS A MEANS 
 
 3. His capital, consisting of the animals 
 or machines he employs to supplant labour 
 in the cultivation of his farm, or in the con- 
 venient consumption of its produce. 
 
 That this last part of his wealth is very 
 beneficial is undoubted ; it supplants a por- 
 tion of labour, which must otherwise be 
 executed with his hands, and may even 
 execute a portion of labour beyond the 
 reach of his personal exertions to accom- 
 plish. If, therefore, he is not possessed of 
 a sufficiency of those animals, instruments, 
 and machines, which form his capital, it will 
 be in the highest degree advantageous that 
 he should augment the exertions of his in- 
 dustry for the purpose of procuring them. 
 But desirable as the augmentation of this 
 description of his property may appear, in- 
 crease of industry is the only means by 
 which, in this, or any other stateof his 
 existence, he can at once augment his ca- 
 pital and his wealth. 
 
 If, indeed, in this insulated state a man 
 could be supposed to be actuated by a dis- 
 position to parsimony, he might be in duced
 
 OF INCREASING WEALTH. 20^ 
 
 to increase his capital, by allotting a por- 
 tion of the labour he usually bestowed on 
 rearing the quantity of live stock and grain 
 his family were accustomed to consume, to 
 the formation of those things which are 
 useful in supplanting labour. By such a 
 change in the direction of his industry, his 
 capital would be undoubtedly augmented, 
 but it is evident his wealth would not be 
 proportionally increased ; for he would ne- 
 cessarily possess a smaller share of that 
 wealth his labour produced, for the enjoy- 
 ment and consumption of his family, before 
 his disposition to parsimony abstracted a 
 portion of it from this salutary occupation, 
 for the purpose of directing its efforts to 
 the formation of capital. 
 
 An arrangement of his labour, which 
 devoted to the production of barley a 
 quantity of labour antecedently bestowed 
 on the cultivation of oats, could never be 
 regarded as increasing his store of barley, 
 and his wealth in similar proportions ; it 
 could alone augment his supply of barley 
 at the expence of diminishing Jiis stock of
 
 200 OF PARSIMONY, AS A MEANS 
 
 oats. Additional exertions of industry, 
 directed towards the production of barley, 
 which occasioned no diminution of labour 
 bestowed on the formation of the other 
 objects of his desire, are evidently the sole 
 means of at once proportionally increasing 
 his barley and his wealth. In like manner, 
 additional exertions of industry, that occa- 
 sion no diminution of the labour usually 
 employed in the production of consumable 
 commodities, must be regarded as the sole 
 means by which a man, so situated, can at 
 once increase his capital and his wealth, in 
 the same proportion. 
 
 Further, to explain with accuracy the ef- 
 fects of parsimony, it is necessary to ob- 
 serve, that, when we compare a proposal 
 for increasing the wealth of an individual, 
 by abstracting a portion of the labour he 
 employs in producing one consumable com- 
 modity, and devoting it to the production 
 of another ; with a proposal for abstracting 
 a portion of the labour he employs in pro- 
 ducing consumable commodities, and de- 
 voting it to the formation of capital, —
 
 OF INCREASING WEALTH. ZQtf 
 
 there appears evidently a most important 
 distinction. 
 
 If a portion of labour is withdrawn from 
 the production of one consumable commo- 
 dity, and applied to the formation of ano- 
 ther, it cannot be regarded as materially 
 affecting his opulence : it can only be con- 
 sidered as altering the nature of the ar- 
 ticles his family consumes and enjoys. 
 The continuance of this arrangement would 
 give stability to the production of these 
 new articles of consumption, but no perse- 
 verance in it could increase or diminish 
 his wealth to a greater extent than might 
 be occasioned by the difference in value 
 betwixt the new and the old production. 
 
 In the same manner, if his supply of in- 
 struments and machines for performing 
 and supplanting labour, (that is, his capi- 
 tal,) is not sufficient, though he might in- 
 crease his wealth, by abstracting a por- 
 tion of his industry from the formation 
 of consumable commodities, and applying 
 it to augment his capital, to the extent of 
 the difference, in point of utility, betwixt
 
 S08 OF PARSIMONY, AS A MEANS 
 
 the consumable commodities he would lose, 
 and the capital he would acquire ; yet this 
 is a practice he could not long continue, 
 without producing a positive diminution of 
 opulence. 
 
 Capital is not a commodity that is con- 
 sumed : it accumulates ; and the moment 
 he acquires, from the application of an addi- 
 tional portion of his industry to increase 
 it, all the known means of supplanting la- 
 bour, by persevering in withdrawing a por- 
 tion of his labour from the production of 
 consumable commodities, and applying it 
 to the increase of capital, he must inevit- 
 ably diminish his wealth, to the extent of 
 the quantity of consumable commodities, 
 the production of which is thus impeded. 
 
 For, as he cannot desire a greater quan- 
 tity of capital than can be used in sup- 
 planting or performing labour, an addi- 
 tional quantity capnot appear to him an 
 object of desire ; and, therefore, cannot be 
 considered as wealth. 
 
 Thus, it appears, that parsimony, or the 
 abstracting of a portion of labour from the
 
 OF INCREASING WEALTH. 209 
 
 production of consumable commodities, for 
 the purpose of applying it to the formation 
 of things useful to perform labour, may, 
 if pushed beyond the bounds of discretion, 
 be the means of materially diminishing the 
 wealth of an individual, who, secluded from 
 society, trusts to his own industry to ob- 
 tain what his family consumes and en- 
 joys ; and that, on the other hand, it can, 
 in no instance, be regarded as a means of 
 increasing, in like proportions, his wealth 
 and his capital. 
 
 If such, however, are the consequences 
 of parsimony on the wealth of man, when 
 considered as a solitary individual, it does 
 not appear how it at once can become an 
 unlimited means of increasing wealth, 
 merely from the circumstance of his en- 
 joying the degree of social communication, 
 that implies the existence of exchanges. 
 
 It is true, the effects of parsimony on the 
 wealth of a society, even in its simplest 
 form, are not at once so perceptible ; — 
 they appear in a shape calculated to de- 
 ceive : — the fortune acquired by the miser 
 
 o
 
 210 OF PARSIMONY, AS A MEANS 
 
 attracts immediate attention ; whilst thfe 
 loss his conduct creates is diffused over the 
 property of all those members of the soci* 
 ety who are employed in producing the 
 articles he would otherwise consume, in 
 shares so minute as almost to escape ob- 
 servation^ 
 
 A society, however, like an individual, 
 can alone, at once, increase its wealth and 
 its capital, in similar proportions, by addi-* 
 tional exertions of industry ; for parsimo- 
 ny does not augment opulence ; it only 
 changes the direction in which the labour 
 of a community is exerted; and unless we 
 adopt an opinion, which, in economical 
 reasoning, seems long to have been un- 
 consciously cherished, — that capital ex- 
 clusively forms wealth, — we cannot conceal 
 from ourselves, that, if a society, by parsi- 
 mony, increases its opulence in capital, it 
 inevitably must diminish its wealth in ar- 
 ticles produced for consumption. 
 
 Even in the simplest state of social in* 
 tercourse, by the division of professions, 
 and the infinite number of exchanges that
 
 OF INCREASING WEALTH. Sll 
 
 take place in consequence of the varied 
 distributions of property, it becomes a mat- 
 ter of intricacy to trace the effects of par- 
 simony : they are nevertheless discernible, 
 and may be exhibited to view in a manner 
 that will make it apparent, that parsimony 
 must have the same effect on the opulence 
 of a community, as it has on that of an in- 
 dividual secluded from society. 
 
 To produce a profit, it has been already 
 shown, that all capital must of necessity be 
 employed in supplanting or performing 
 labour ; when, therefore, any member of 
 the society, by parsimony, accumulates ca- 
 pital, it must create an immediate demand 
 for the labour of the blacksmith, of the 
 carpenter, and of other mechanics, who are 
 employed in giving to raw materials the 
 form that adapts them for executing la- 
 bour ; the proportion betwixt the demand 
 for, and the quantity of, this sort of labour, 
 must of course be altered in such a man- 
 ner, as, by increasing its value, to encou- 
 rage the augmentation of it. 
 
 But, as the increase of value and conse-
 
 212 OF PARSIMONY, AS A MEANS 
 
 quent encouragement given to that species 
 of labour, is occasioned by a diminution of 
 expenditure in things that would be im- 
 mediately consumed, it must reduce their 
 value by the portion of demand it abstracts 
 from them, (as has been already shown,*) 
 in a greater degree than it increases the 
 value of that labour, or of those commodi- 
 ties to the acquisition of which it is per- 
 verted ; that is, it must produce a greater 
 diminution of encouragement to the pro- 
 viding of food, clothing, and those other 
 articles which would have been consumed, 
 had it not been for this avidity of accumu- 
 lating capital, than it gives augmentation 
 of encouragement to the forming of those 
 things which tend to supplant labour. But 
 farther, to show the effects of indulging in 
 parsimony, — that baneful passion, which has 
 been falsely denominated a virtue, — it is ne- 
 cessary here to explain the singular effect 
 which the demand it creates must, in so- 
 ciety, produce on individual riches, and,^ 
 
 * See p. 50.
 
 OF INCREASING WEALTH. 213 
 
 consequently, on the encouragement to the 
 augmentation of wealtli. 
 
 It has already been made evident, that 
 a sudden de.nandfor any consumable com- 
 modity, by increasing its value, encourages 
 an augmented production, and tends, there- 
 fore, to increase wealth, though its effect 
 is always counteracted by the more import- 
 ant diminution o Hheyalue of other com- 
 modities, (from which the sudden rise of 
 the value of any one commodity abstracts 
 a portion of demand,) because the check 
 given to production, by the abstraction of 
 demand, has a more powerful effectin di- 
 minishing wealth, than the encouragement 
 arising from an extension of demand has in 
 augmenting it. This was. illustrated by 
 showing the effect which doubling the de- 
 mand for sugar would have, where the 
 means of satisfying that increased demand 
 were to be found, by abstracting a part of 
 the expenditure of the society in butchers- 
 meat, wine, and mustard. * 
 
 * See p. 82.
 
 S14 OF PARSIMONY, AS A MEANS 
 
 In considering that subject, it appeared, 
 that, though the diminution of individual 
 riches, in the articles of wine, mustard, and 
 butchers -meat, would be great, this would, 
 in some degree, though inadequately, be 
 compensated by an increase in the value 
 of sugar, and the consequent augmenta- 
 tion of the riches of individuals in that ar- 
 ticle. 
 
 But if this abstraction of demand from 
 the articles of butchers-meat, wine, and 
 mustard, had been occasioned by the desire 
 of an individual to indulge in parsimony, 
 then, as the quantity of those articles which 
 compose the capital of the community 
 would be increased, without any alteration 
 in the extent of the demand for them, 
 their value must be diminished, as well as 
 that of the butchers-meat, wine, and mus- 
 tard, from whence the demand is abstract- 
 ed. Thus a diminution of value must 
 be produced, not only in the articles for 
 which parsimony occasions an abstraction 
 of demand, but even in the articles for 
 which it creates a demand ; and public
 
 OF INCREASING WEALTH. 215 
 
 wealth must severely feel the effects of the 
 discouragement bv this means given to the 
 production of both. 
 
 Though it appears, therefore, that the 
 wealth of a society never can be increased 
 by a system of continued parsimony, this 
 abstinence from expenditure in consum- 
 able commodities, and consequent accumu- 
 lation, may evidently be highly injurious 
 to its progress ; for a community may suf- 
 fer, Ist^ By the creation of a quantity of 
 capital more than is requisite ; ^dli/, A 
 community must at all times suffer by the 
 abstraction of a portion of encouragement 
 to future reproduction. 
 
 1. Bi/ the creation of a quantity of capi- 
 ial more than is requisite ; for the moment 
 a thing, however much esteemed, is produ- 
 ced in such a quantity, that the whole can- 
 not be employed, — -a part ceases to be an 
 object of desire ; and as things, when no 
 longer scarce, can form no part of indi- 
 vidual riches, so, when no longer objects 
 of desire, they form neither a portion of 
 individual riches nor of wealth. The finest 
 
 y
 
 S16 OF PARSIMONY, AS A MEANS 
 
 palaces in the world stand empty at Delhi, 
 unoccupied and undesired ; and the spa- 
 cious warehouses at Antwerp serve only 
 as monuments of her departed commerce. 
 2. By the abstraction of a portion of ew- 
 couragement to future reproduction^ a dimi- 
 nution must be occasioned in the wealth 
 to be produced ; for, as long as the nature 
 of men remains unchanged, the knowledge 
 of what has been consumed, and of the de- 
 gree of avidity displayed in the market for 
 the different articles of consumption, must 
 imperiously regulate the nature of what is 
 subsequently produced. This, indeed, may 
 be assumed as a proposition universally ad- 
 mitted ; in as much as even those who 
 hold deprivation of expenditure, and conse- 
 quent accumulation, to be a mode of in- 
 creasing wealth, anxiously contend that 
 the whole quantity of industry annually 
 employed to bring any commodity to mar- 
 ket, suits itself to the effectual demand. * 
 An admission which not only renders it 
 
 * Wealth of Nations, Vol. I. p. 70. 4to edit.
 
 OF INCREASING WEALTH. 217 
 
 impracticable to consider parsimony as a 
 means of increasing wealth, but which pre- 
 cludes the possibility of denying that it 
 must produce a rapid diminution of it. 
 
 For, if the abstraction from expenditure 
 of a sum equal to what is added to the ca- 
 pital of the community, causes a diminu- 
 tion of production to that extent ; parsi- 
 mony must be considered as a means of 
 creating capital, at the expence of sacri- 
 ficing a revenue as great as the capital 
 created ; and it does not appear, that a 
 more ruinous operation in all its bearings 
 can be devised, than that of disposing of 
 an annual income, (for example, of a mil- 
 lion,) for the purpose of acquiring a capi- 
 tal to the same amount. 
 
 If, indeed, the mercantile system of po- 
 litical economy has justly been deemed 
 objectionable, and is now universally ex- 
 ploded, because it exclusively regarded 
 money as wealth, the system that holds 
 parsimony to be the great means of in- 
 creasing wealth, seems equally objection- 
 able, because it exclusively considers capi-
 
 S18 OF PARSIMONY, AS A MEANS 
 
 tal as wealth. The former system could 
 alone be maintained by its followers teach- 
 ing mankind, in estimating the benefit de- 
 rived from trade, to overlook, as a matter 
 of indifference, the goods sacrificed to ob- 
 tain money ; whilst the latter can alone be 
 maintained by its adherents habituating 
 mankind to «how a similar indifference for 
 revenue, by disregarding that diminution 
 in the production of consumable commo- 
 dities, which parsimony must inevitably 
 create. 
 
 If, however, deprivation of expenditure, 
 and consequent accumulation, far from be- 
 ing the means of increasing the wealth of 
 a. solitary individual, inevitably leads to its 
 diminution ; — if it appears that social in- 
 tercourse, though it increases the difficulty 
 of tracing the consequences of parsimony, 
 produces no variation in its effects ; it seems 
 impossible to discover what alteration the 
 circumstances of a society can undergo, in 
 the progress of wealth, which will so far 
 change the nature of things as to transform
 
 OF INCREASING WEALTH. 219 
 
 parsimony into a means of increasing opu- 
 lence. 
 
 It has been observed, that the property 
 man possesses, when existing in the situa- 
 tion to which alhision has been made, na- 
 turally classes itself under three different 
 heads. 
 
 Isff The land he cultivates. 
 
 2dli/f The stock he reserves for immedi- 
 ate and remote consumption ; under which 
 is comprehended the produce of his farm, 
 whether vegetable or animal. 
 
 3dli/, His capital, consisting of the ani- 
 mals and machines he employs to supplant 
 labour in the cultivation of his farm, or in 
 the convenient consumption of its produce. 
 
 In the progress of wealth, the first ar- 
 ticle of the society's property, the land 
 the farmer cultivates becomes, from im- 
 provement, more productive ; the improv- 
 ed system of cultivation requires more ca- 
 pital : and the demand thus created, like 
 the demand for consumable commodities, 
 encourages additional exertions of industry, 
 which is the sole method of at once in-
 
 220 OF PARSIMOXy, AS A MEANS 
 
 creasing capital and wealth. Indeed, the 
 most beneficial results often flow from the 
 exertions of that labour which is rendered 
 unnecessary by capital employed in exe- 
 cuting newly invented means of supplanting 
 labour. — " When I erected my thrashing- 
 " machine, I found myself soon repaid from 
 " the labour performed in cultivating the 
 " farm by those men I was accustomed to 
 " employ in thrashing ; and the expence 
 " of making it go by wind instead of horses, 
 *' was more than repaid by the additional 
 " work my horses performed, the same 
 " season the improvement was adopted." 
 
 These are sentiments familiar to every 
 man conversant in agricultural pursuits j 
 and they are descriptive of the means by 
 which the capital of an individual and the 
 wealth of a society are at once increased, 
 whilst parsimony, which depresses the de- 
 mand for the produce of land, must dis- 
 courage Its cultivation, and, of course, di- 
 minish the demand for capital so employ- 
 ed. 
 
 The increased produce of land, occasion-
 
 OF INCREASING WEALTH. 221 
 
 ed by the wise application of labour and 
 capital, of course, increases, in a great de- 
 gree, the vegetable and animal substances 
 reserved for immediate or remote con- 
 sumption, which forms the second branch 
 of the property of a society ; and it is this 
 branch of the property of mankind that 
 alone appears capable of unlimited in- 
 crease; the more man augments it, the more 
 must the human species abound in opu- 
 lence or in numbers. The affluent mem- 
 ber of an opulent society consumes more 
 by reducing his nourishment into aform suit- 
 able to his palate, by selecting, to compose 
 his clothing, the parts of the productions of 
 naturemost kindly tohis feeling, and pleasing 
 to his eye ; and by disposing of a part of what 
 is produced in exchange for commodities 
 of a distant country, which affluence en- 
 ables him, and habit teaches him to en- 
 joy. If, even by all these various methods, 
 the increased produce is not consumed, ex- 
 perience shows that abundance of the ne- 
 cessaries of life has a direct tendency to 
 augment population, and, by this means.
 
 ^^*2 OF PARSIMONV, AS A MEANS 
 
 to restore the proportion betwixt the de- 
 mand for, and the quantity of, the increas- 
 ed commodities ; thus maintaining their 
 value, notwithstanding their abundance, 
 and perpetuating the encouragement to re- 
 production. * 
 
 The third class or description of the pro- 
 perty of a society, its capital, consisting of 
 all the various means of supplanting la- 
 bour, and of performing labour, which 
 could not be accomplished by the personal 
 
 • To some confused idea of the important truth that this 
 branch of the property of mankind may be increased to an un- 
 limited extent, creating, as it augments, a demand for a fur- 
 ther increase of capital, which is here considered as a distinct 
 description of wealth, maybe attributed the following remark- 
 able passage in the work of an intelligent author, who wrote 
 on trade, in the end of the 17th century: " This showeth a 
 *' mistake of Mr Munn, in his Discourse of Trade, who com- 
 ** mends parsimony, frugality, and sumptuary laws, as the 
 " means to make a nation rich, and uses an argument from a 
 "simile, supposing a man to have L. 1 000 per annum, and 
 *' L. 2000 in a chest, and spends yearly L. 1500 per annum, 
 " he will, in four years time, waste his L. 2000. This is true 
 *' of a person, but not of a nation, because his estate is finite, 
 *' but the stock of a nation is infinite, and can never be consura- 
 " ed ; for what is infinite can neither receive addition by par- 
 ** simony, nor suffer diminution by prodigality."— A Discourse 
 of Trade, by H. Bifield, M. D. printed 1^90.
 
 OF INCREASING WEALTH. 2^3 
 
 exertions of man, may also, in the pro- 
 gress of wealth and knowledge, be wonder- 
 fully increased, as the shipping, the navi- 
 gable canals, the roads, the machines for 
 transporting and for fabricating, and the 
 warehouses for preserving commodities, as 
 well as the capital employed in circulating 
 them, sufficiently denote. * 
 
 * Nothing can more forcibly exhibit the great augmentation 
 that has taken place during the last century in the capital, 
 which, in this cf-jntry, is employed in conducting circulation, ' 
 in consequence of its increased opulence, than the following 
 advertisement inserted in the Post Boy of the 20th of March 
 17O8, and repeated in the same paper, March 23, 25, and 
 27: 
 
 " London, March 20 — Whereas there have been several false 
 " and malicious reports industriously spread abroad, reflecting 
 " on Sir Richard lioare, goldsmith, for occasioning and promote 
 *' ing a run for money on the Bank of England ; and in parti- 
 " cular, several of the Directors of the said Bank, reporting, 
 *' that the said Sii Richard sent to the Bank for ten of their notes 
 *' of 1^.10 each, with a design to send several persons with the 
 *' said notes to receive the money therein, so as to effect his ill de- 
 " signs, and to bring disreputation on the Bank, and occasion 9, 
 *' disturbance in the city of London. This is to satisfy all per- 
 " sons, that the Right Honourable the Lord Ashburnham, father 
 *' of the Honourable Major Ashburnham, major of the first troop 
 «*of her Majesty's Life Guards, who was ordered to march for 
 *' Scotland, sending to the said Sir Richard Hoare for a large 
 ** quantity of gold, and for ten Bank notes of L. 10 each, for 
 " the said major to take with him to bear his expences j the
 
 224 OF PARSIMONY, AS A MEANS 
 
 But public wealth can alone be increas* 
 ed by an augmentation of this or any other 
 description of property, when ft proceeds 
 from additional exertions of industry ; and 
 capital must at all times have its limits, be- 
 yond which, even by these means, it can- 
 not be increased with advantage. In every 
 state of society, a certain quantity of capi- 
 tal, proportioned to the existing state of 
 the knowledge of mankind, may be use- 
 fully and profitably employed in supplant- 
 ing and performing labour in the course of 
 rearing, giving form to, and circulating the 
 
 " gold was sent to his Lordship accordingly, and Sir Richard's 
 '* servant went to the Bank for ten notes of L. 10 each, which 
 " the cashier of the Bank refused to give. But if Sir Richard. 
 " had intended to promote a run for money on the Bank, he 
 " could have done it in a more effectual manner, having by 
 " him, all the time that the great demand for money was on 
 " the Bank, several thousand pounds in notes payable by the 
 *' Bank; and also, there was brought to Sir Richard, by seve- 
 " ral gentlemen, in the time ot the run on the Bank, notes pay- 
 *' able by the said Bank, amounting to a great many thou- 
 " sands of pounds, which he was desired to take, and receive 
 *• the money presently from the Bank ; which he refused to do 
 «* till the great demand on the Bank for money was over. 
 
 " N. B. That the reports against Sir Richard have been 
 " more malicious than herein is mentioned, which he forbears 
 " to insert for brevity's sake."
 
 OF INCREASING WEALTH. 225 
 
 raw materials produced. Man's invention, 
 in the means of supplanting labour, may 
 give scope, in the progress of society, for 
 the employment of an increased quantity ; 
 but there must be, at all times, a point de- 
 termined by the existing state of knowledge 
 in the art of supplanting and performing 
 labour with capital, beyond which capital 
 cannot profitably be increased, and beyond 
 which it will not naturally increase ; be- 
 cause the quantity, when it exceeds that 
 point, must increase in proportion to the de- 
 mand for it, and its value, like that of all 
 other commodities, must of consequence 
 diminish in such a manner, as effectually to 
 check its augmentation. It is wonderful 
 how the author of the Wealth of Nations, 
 who successfully ridicules tlie indefinite ac- 
 cumulation of circulating capital, by com- 
 paring it to the amassing of an unlimited 
 number of pots and pans, * did not perceive 
 that the same ridicule is applicable to the 
 unlimited increase of every branch of that 
 
 * Wealth of Nations, Vol. II. p. 15. 4to edit. 
 P
 
 226 OF PARSIMONY, AS A MEANS 
 
 deicription of the property of a country 
 which constitutes its capital. 
 
 Fortunately, however, for mankind, the 
 mechanism of society is so arranged, that 
 the mischief done by the parsimony and dis- 
 position to accumulation of one indivi- 
 dual is almost uniformly counteracted by 
 the prodigality of some other ; so that, in 
 practice, nothing is found more nearly 
 commensurate than the expenditure and 
 revenue of every society. This inquiry, 
 therefore, if mankind were left to regulate 
 their conduct bv their inclinations, would 
 be rather a matter of curiosity than utili- 
 ty ; for, if the effects of parsimony are 
 uniformly counteracted by prodigality, the 
 public wealth can be neither increased nor 
 diminished by it. 
 
 As an object of curiosity, it would, at all 
 events, be interesting to investigate, whe- 
 ther parsimony was entitled to all the prais- 
 es lavished upon it by the learned and the 
 ingenious. But theimpressiontheseopinions 
 have, in our own times, made on the con- 
 duct of legislation, has given to this inves-
 
 OF INCREASING WEALTH. 227 
 
 tigation a degree of importance whicli 
 makes it highly interesting. 
 
 Statesmen and legislators, (who, like 
 others, have considered every means of in- 
 creasing the fortunes of individuals as a 
 means of increasing public wealth,) taught 
 to admire the effect of parsimony and ac- 
 cumulation in the conduct of private for- 
 tunes, have been naturally led to regard it 
 as a salutary means of increasing the public 
 fortune, or relieving from embarrassment 
 the public treasury. * 
 
 On this principle, the republic of Hol- 
 land, so early as the year 1655, was indu- 
 ced to set aside an annual revenue, to be 
 
 • *' On the same principle that guided the determination 
 " of the Parliament of 1 786, another act was passed in 1792, 
 *' which provided, that on all future loans, (in addition to the 
 " taxes to be imposed for paying tlie interest of the same,) a 
 " surplus of one pound per cent, per annum, on the capital 
 *" created, should be raised for the redemption of that capital. 
 *' This VMS an idea conceived in that tpirit of injlexible inte- 
 " gnV^ and economi/^ ofxKihich nations rarely afford an exam- 
 " pie ; though^ like the same virtue in private life, it is culcu- 
 " lated to promote^ in the highest degree, their credit and their 
 *^ prosperity J"* Brief Examination into the Increase of the 
 Revenue, Commerce, &c. of Great Britain, by George Rose, 
 p. 19.
 
 228 OF PARSIMONY, AS A MEAN8 
 
 permanently accumulated, for the public 
 benefit. This example was, in the year 
 1685, followed by Pope Innocent XL ; 
 and an arrangement of a similar nature 
 took place in the management of the Trea- 
 sury of England in the year 1717, which 
 was afterv*rards extended in the year 1727, 
 when an annual sum of no less than 
 L. 1 ,200,000 was devoted to accumulation 
 at compound interest. 
 
 All these different sums, however, set 
 aside for accumulation, (or sinking funds 
 as they are called ;) — that of the province 
 of Holland in the year 1 655, — that of Pope 
 Innocent XI. in the year 1685, — as well 
 as that established in England in the 
 year 1717 and 1727, — arose from savings in 
 consequence of reductions of interest ; for 
 mankind had not yet become so enamoured 
 of the idea of accumulation, as to em- 
 bolden any legislature to impose burdens 
 on the public for the avowed purpose. 
 
 How and why this first attempt to force 
 accumulation by law in England died away, 
 will be afterwards considered. In point of
 
 OF INCREASING WEALTH. 229 
 
 fact, we are told, by one of the ablest and 
 most respectable advocates in flivour of this 
 fiyslem of increasing the wealth of a nation 
 by accumulation, that, soon after the year 
 1730, this fund set aside for accumulation, 
 which, if it ^' could have escaped the hand of 
 " violence, would have made Great Britain 
 " the envy and terror of the world, was pre- 
 ** maturely destroyed by the hand of its own 
 *' parent ;'* * and after that period, though 
 there existed the name of a sinking fund, 
 and though sums were from time to time 
 employed to purchase up portions of the 
 pubhc debt, the plan of a regular forced ac- 
 cumulation, by the authority of Govern- 
 ment, with a view to public benefit, was, 
 for many years, relinquished in practice, f 
 This system was, however, again revived 
 in the year 1786, when, in the House of 
 
 Commons, it was stated,— and certainly at 
 ^he time truly stated, — to be the common 
 
 consent of all, that L, 1,000,000 should 
 
 • See an Appeal to the Public on the subject of the Na- 
 tional Debt, by Dr Price, p. 37. 
 
 t Sums paid off by the Sinking Fund established in
 
 230 
 
 OF PARSIMONY, AS A MEANS 
 
 be set aside to accumulate for national be- 
 nefit. 
 
 A law was accordingly soon afterwards 
 made, by which L. 1,000,000 was devoted 
 to be accumulated quarterly, till such time 
 as, together with the annuities which were 
 to fall into the public, it amounted to 
 
 1717 and 1727, and afterwards augmented, by the reduc- 
 tion of interest, betwixt the year 1750 and the year 1757« 
 
 Year. 
 
 Year. 
 
 1723, 
 
 L. 1,204,786 
 
 3 
 
 4| 
 
 1738, L 
 
 . 1 ,U00,000 
 
 
 
 
 
 1724, 
 
 333,447 
 
 18 
 
 4 
 
 1751, 
 
 368,771 
 
 2 
 
 4 
 
 1727, 
 
 6.^0,453 
 
 2 
 
 H 
 
 1752, 
 
 821,270 
 
 13 
 
 9 
 
 1728, 
 
 1 ,000,000 
 
 
 
 
 
 1765, 
 
 870,888 
 
 5 
 
 5| 
 
 17 -'9, 
 
 1,27.5,027 
 
 17 
 
 101 
 
 1766, 
 
 870,888 
 
 5 
 
 H 
 
 1730, 
 
 1 ,000,000 
 
 
 
 
 
 1767, 
 
 2,^>1 6,776 
 
 10 
 
 11 
 
 1731, 
 
 1,0.;0,419 
 
 16 
 
 4 
 
 1768, 
 
 1,750,000 
 
 
 
 
 
 1732, 
 
 1 ,000,000 
 
 
 
 
 
 1769, 
 
 875,000 
 
 
 
 
 
 1733, 
 
 913,1 15 
 
 15 
 
 H 
 
 1770, 
 
 1,500,000 
 
 
 
 
 
 1734, 
 
 86,884 
 
 4 
 
 H 
 
 1772, 
 
 1,500,000 
 
 
 
 
 
 1736, 
 
 1,000,000 
 
 
 
 
 
 1774, 
 
 1,000,000 
 
 
 
 
 
 1737, 
 
 1,000,000 
 
 
 
 
 
 1775, 
 
 1,000,000 
 
 
 
 
 
 Andount of the National Debt at diflferent Periods up to the 
 Year 1775. 
 
 Year. 
 
 
 Year. 
 
 
 1688, 
 
 L. 664.263 
 
 1748, 
 
 L. 78,293,312 
 
 1702, 
 
 16,394,702 
 
 1735, 
 
 74,571,840 
 
 1715, 
 
 54,143,363 
 
 1762, 
 
 146,682,844. 
 
 1727, 
 
 52,092 235 
 
 1775, 
 
 135,943,051 
 
 1739, 
 
 46,934,623 
 

 
 OF INCREASING WEALTH. t3\ 
 
 L. 4,000,000 7;cr annum. * And in the 
 year 1792, after al)lj stating the prosperity 
 which tlie duration of peace and tranquil- 
 lity had secured for this country, the same 
 minister, who proposed the accumulating 
 fund in 1786, introduced a proposal for in- 
 creasing the sum devoted to accumulation 
 in the following terms : — 
 
 *^ Having stated the increase of revenue, 
 '^ and shown that it has been accompanied 
 <' by a proportionate increase of the nation- 
 ^' al wealth, commerce, and manufactures, 
 " I feel that it is natural to ask, What have 
 " been the peculiar circumstances to which 
 ^* these effects are to be ascribed ? 
 
 " The first, and most obvious answer, 
 " which every man's mind will suggest to 
 " this question, is, that it arises from the na- 
 " tural industry and energy of the country ; 
 *« but what is it which has enabled that in« 
 " dustry and energy to act with such pecu- 
 ^' liar vigour, and so far beyond the ex- 
 " ample of former periods ? The improve- 
 
 * Cap. xxxi, an. 26. Geo. III.
 
 232 OF PARSIMONY, AS A MEANS 
 
 tf* ment which has been made in the mode 
 " of carrying on ahuost every branch of 
 " manufacture, and the degree to which la- 
 " hour has been abridged, by the invention 
 " and application of machinery, have un- 
 " doubtedly had a considerable share in 
 " producing such important effects. We 
 " have besides seen, during these periods, 
 *• more than at any former time, the effect 
 *' of one circumstance which has princi- 
 pally tended to raise this country to its 
 " mercantile pre-eminence ; — I mean that 
 " peculiar degree of credit, which, by a 
 " twofold operation, at once gives addi- 
 " tional facility and extent to the transac- 
 " tions of our merchants at home, and en- 
 " ables them to obtain a proportional supe- 
 " riority in markets abroad. This advan- 
 " tage has been most conspicuous during 
 " the latter part of the period to which I 
 *' have referred, and it is constantly in- 
 " creasing, in proportion to the prosperity 
 " which it contributes to create. 
 
 " In addition to all this, the exploring 
 " and enterprising spirit of our merchants
 
 OF INCREASING WEALTH. 233 
 
 " has been seen in the extension of our 
 " navigation and our fisheries, and the ac- 
 ** quisitions of new markets in different 
 '' parts of the world j and, undoubtedly, 
 " those efforts have been not a little assist- 
 " ed by the additional intercourse with 
 " France, in consequence of the Commer- 
 " cial Treaty ; an intercourse which, though 
 " probably checked and abated by the dis- 
 " tractions now prevailing in that kingdom, 
 " has furnished a great additional incite- 
 " ment to industry and exertion. 
 
 " But there is still another cause, even 
 ** more satisfactory than these, because it 
 " is of a still more extensive and perma- 
 " nent nature ; that constant accumulation 
 " of capital ; — that continual tendency to 
 " increase, the operation of which is uni- 
 " versally seen in a greater or less propor- 
 " tion, wherever it is not obstructed by 
 " some public calamity, or by some mis- 
 " taken and mischievous policy ; but which 
 " must be conspicuous and rapid,indee d,in 
 " any country which has once arrived at an 
 ** advanced state of commercial prosperity.
 
 S34 OF PARSIMONY, AS A MEANS 
 
 " Simple and obvious as this principle is, 
 " and felt and observed as it must have 
 *• been in a greater or less degree, even 
 '^ from the earliest periods, I doubt vvhe- 
 " ther it has ever been fully developed and 
 " sufficiently explained, but in the writings 
 " of an author of our own times, now un- 
 <^ fortunately no more, (I mean the author 
 " of the celebrated Treatise on the Wealth 
 " of Nations,) whose extensive knowledge 
 " of detail, and depth of philosophical re- 
 " search, will, I believe, furnish the best 
 *^ solution to every question connected with 
 " the history of commerce, or with the 
 " systeni of political economy. This accu- 
 " mulation of capital arises from the conti- 
 " nual appHcation of a part, at least, of the 
 " profit obtained in each year, to increase 
 " the total amount of capital to be employ- 
 " ed in a similar manner, and with con- 
 «* tinued profit, in the year following. The 
 " great mass of the property of the nation 
 *' is thus constancy increasiag at com- 
 " pound interest ; the progress of which, 
 *f in any considerable period, is what,
 
 OF INCREASING WEALTH. 235 
 
 *< at first view, would appear incredible. 
 " Great as have been the effects of this 
 " cause already, they must be greater in 
 " future ; for its powers are augmented 
 *' in proportion as they are exerted. It 
 " acts with a velocity continually acce- 
 " lerated, with a force continually increas- 
 « ed. 
 
 " Mobilitate viget, viresque acquirit eundo." * 
 
 This was the prelude to a legislative ar- 
 rangement, which devoted the annual mil- 
 lion to be accumulated till it produced 
 L. 3,000,000 per annum over and above 
 the yearly million, and the produce of the 
 annuities which would fall into the public ; 
 and also to a provision, compelling one per 
 cent, to be set aside annually for accumula- 
 tion on the capital of all debt which should 
 in future be contracted. 
 
 L. 400,000 additional was likewise given 
 
 * See Mr Pitt's Speech, printed by authority, for G. G. 
 and J. Robinsons, 1792, p. 3^.
 
 236 OF PARSIMONY, AS A MEANS 
 
 to the accumulating fund this year, which 
 laid the foundation of another annual grant 
 of L. 200,000. 
 
 But the effects of this admiration of the 
 benefits derived from a system of accumu- 
 lation did not terminate here. The same 
 minister, in the year 1 799, imposed an in- 
 come tax, which he calculated would pro- 
 duce L. 10,000,000 annually ;* and an act 
 was passed, appropriating the produce of 
 this tax on the return of peace to accumu- 
 lation till it should amount to a sum suffi- 
 cient to redeem the debt subsequently to 
 be contracted during the war. 
 
 The accumulating fund created in the 
 year 1786, together with the addition de- 
 rived from the arrangement made in the 
 year 1792, by this time amounted annually 
 to a sum such as enabled the public to fore- 
 see, that, before the probable return of 
 
 * See Appendix, No. IV. being the Computation of Income 
 by Mr Pitt, as stated by Lord Auckland, in his Speech, print- 
 ed by authority, 1799' And also by Mr Rose, Appendix, 
 No. 7. of his Brief Examination.
 
 OF INCREASING WEALTH. 237 
 
 peace, it would produce L. 5,000,000 an- 
 nually. 
 
 Under the law of this country, therefore, 
 as it was then constituted, had this income 
 tax produced L. 10,000,000, L. 15,000,000 
 of the revenue of the country would, on 
 the retiu'n of peace, have been devoted to 
 accumulation. 
 
 This statement will not, in substance, be 
 contradicted either by Mr Pitt * or his ad- 
 mirers, f He took credit to himself for 
 
 * See Resolution on the Slate of Finance, 19th and 20th, 
 proposed by Mr Pitt, and agreed to by the House of Com- 
 mons, 1801. 
 
 ■f *' But the farther resulting advantages are infinitely 
 *' more important. It is not amongst the least of those ad- 
 " vantages, that, by the present plan, the salutary effects of the 
 *' sinking fund are greatly accelerated. The sums of different 
 ^' descriptions to be reserved and applied by the cpmmission- 
 •' ers for the redemption of the national debt, will, in the first 
 *' year of peace, be not less than fifteen millions., or nearly 
 ** £. 50,000 a dai/y for three hundred days in the year. The 
 *' operation of such a sum brought daily into the market to 
 ** purchase stock, which is to be extinguished, and not to re- 
 *• turn to, cannot fail to have an effect in favour of our pub- 
 *' lie credit, as much beyond all calculation as it will be be- 
 '* yond all experience." See the Substance of Lord Auck- 
 Jand's Speech, printed by authority, p. 22.
 
 238 OF PARSIMONY, AS A MEANS 
 
 the device : and they uniformly asserted, 
 that the merits of the plan, which they stat- 
 ed to be of more importance to Great 
 Britain than the possession of all the mines 
 of America, would hand down his name 
 with glory to posterity. * — This, too, was 
 
 * See Chalmers's Estimate of the Comparative Strength of 
 Great Britain, page 183. To which, however, it is impossi- 
 ble to refer without remarliing, that it appears extraordinary 
 the author should conclude, with the following .paragraph, 
 the same chapter in which he states the Sinking Fund, as 
 constituted by Mr Pitt, to be a measure of more importance 
 to Great Britain than the acquisition of the American 
 mines: — 
 
 " The alterations which have been made in the collections 
 " of some departments of the public income, and the improve- 
 '* ment which has happily been effected in all, have biought, 
 " and continue to bring, vast sums into the exchequer. The 
 ** public expenditure continually distributes this vast revenue 
 " among the creditors, or servants of the state, who return it 
 " to the original contributors, either for the necessaries or 
 ", luxuries of life. The exchequer, which thus constantly re- 
 " ceives and disperses this immense income, has been aptly 
 " compared to the human heart, that unceasingly carries on 
 " the vital circulation ; so inviiroratin : while it flows ; so fatal 
 " when it stops. Thus it is that modern taxes, which are never 
 " hoarded but alwaj/s expended^ may even promote the em- 
 " ployments and industry, the prosperity and populousness, of 
 " an industrious people."
 
 OF INCREASING WEALTH. 239 
 
 the object of those daring projectors of 
 the Tower of Babel, who are recorded 
 in sacred history to have said, *' Go to, 
 *' let us build us a tower whose top may 
 " reach unto heaven, and let us make us a 
 " name." And striking as the similarity 
 may be in the object, there will be found a 
 still more glaring resemblance in the de- 
 sign. 
 
 Had an opportunity existed, in profound 
 peace, of applying this sum of L. 15,000,000 
 but for two years, to the uses to which by 
 law it was appropriated, the ruin it must 
 have produced would have practically ex- 
 hibited and explained the folly of the at- 
 tempt. But as we have had no oppor- 
 tunity of learning from experience the 
 consequences of the measure, it will re- 
 quire a little investigation to display them. 
 
 Before, however, proceeding to this in- 
 quiry, lest the reader should be disposed 
 to think, with the generality of mankind, 
 that what is true in figures, and the result 
 of accurate calculation, must be true in
 
 54?l) of parsimony, as a means 
 
 practice, and possible in execution ; he is 
 desired to reflect, that one penny put out, 
 at our Saviour's birth, at 5 per cent, com- 
 pound interest, would, before this time, 
 have increased to a greater sum than could 
 be contained in five hundred millions of 
 earths, all of solid gold ; and that this is a 
 calculation as accurate, and as true, as any 
 with which Parliament has been furnished 
 in the progress of this delusion. * 
 
 If L. 15,000,000 a~year were levied bv 
 
 * *f Ojie penny put out at our Saviour's birth, to 5 per 
 " cent, compound interest, would, in the present year, 1781, 
 " have increased to a greater sum than would be contained in 
 *' two hundred millions of earths, all solid gold. But if put 
 " out to simple interest, it would, in the same time, have 
 "amounted to no more than 7s. 6'd. AH Governments that 
 •' alienate funds destined for reimbursements, choose to im- 
 «' prove money in the last rather than in the first of these 
 *' ways.'* Observations on Reversionary Payments, &c. by 
 Richard Price, D. D. p. 228. 
 
 That the reader may see a lively picture of the absurd 
 length to which the speculations of incrjjasing the wealth of 
 mankind, by accumulation of capital, have been carried, we 
 have iu Appendix, No. V. printed the testament of Mr For- 
 tune Ricard, teacher of arithmetic at D , read and pub- 
 lished at the Court of Bailiwick of that iown, the 19 th Au- 
 gust 1794, translated by Dr Price.
 
 OP INCREASING WEALTH. g^l 
 
 the Government from the revenue of its 
 subjects, to defray the charge of warfare or 
 any other extraordinary expenditure ; as 
 this money would be expended in articles 
 of consumption, as fast as assumed, the 
 expence of the Government would effec- 
 tually counteract the effects of the parsi- 
 mony it renders necessary, and creates in 
 the subject. The only mischief, therefore, 
 that could ensue, would arise from the ex- 
 tensive demand it must suddenly occasion 
 for one class of commodities, and from the 
 consequent abstraction of so large a por- 
 tion of the revenue of the subjects from the 
 acquisition of those articles in which it is 
 usually expended ; — a mischief in itself 
 nowise trifling, as recent experience has 
 taught the merchants of this country. * 
 
 Very different, however, must have been 
 the effect of raising fifteen millions for the 
 purpose of accumulation, or of forcibly 
 converting fifteen millions of reyenue into 
 capital. In this, as in the former case, 
 there would have ensued all the mischief 
 
 * See p. 85. 
 
 a
 
 242 OF PARSIMONY, AS A MEANS 
 
 occasioned by abstracting a portion of de- 
 mand represented by fifteen millions a- 
 year, from the commodities which the sub- 
 jects were accustomed to acquire with this 
 part of their revenue ; but, in this case, 
 there would unfortunately have existed no 
 extraordinary expenditure, to counteract 
 the full effects of this forced parsimony ; 
 for it would have been difficult to persuade 
 the proprietors of stock, from whom such 
 extensive purchases would have been made 
 by the Commissioners of the Sinking Fund, 
 all at once to spend, as revenue, that which 
 habit had taught them to regard as capital ; 
 or, in other words, all at once to ruin them- 
 selves, in order to counteract the bad ef- 
 fects of this miserly policy in Govern- 
 ment. 
 
 Unless, however, the stockholder could 
 have been persuaded thus to squander his 
 capital, fifteen millions a-year less must 
 have been expended in the different ar- 
 ticles of consumption the country produ- 
 ced or manufactured ; that is, a portion 
 of demand would at once have been with-
 
 OF INCREASING WEALTH. €48 
 
 drawn from consumable commodities of 
 British growth or manufacture, or, what is 
 the same thing, from consumable commo- 
 dities purchased by things of British growth 
 and manufacture, nearly equal to the whole 
 demand created by the foreign trade of 
 the country in the year 1786, when the 
 million was first set aside to accumulate, as 
 the exports from England amounted in that 
 year to the sum of L. 15,385,987. 
 
 But if is true, (which all writers on poli- 
 tical economy, however much they may 
 differ on other subjects, concur in assert- 
 ing, *) that the whole quantity of industry 
 
 * " Que la totalite des sommes du revenu rentre dans la 
 '* circulation annuellf, et la parcoure dans toute son etendue ; 
 *' qu'il ne se forme ponit de lortunes pecuniares, ou du moins 
 " qu'il y ait compensation entre ct-Ues qui se forment et celles 
 <* qui reviennent dans la circulation ; car autrement ces fortunes 
 ** pecuniaircsarreteroient la distribution d'une partie du revenu 
 *' annuel de la nation, et retiendroient le pecule du Royaume 
 " au prejudice de la rentree des avances de la culture, de la 
 " retribution du salaire des artisans, et de la consommation 
 ** que doivent faire les differentes classes d'hommes qui exer- 
 <* cent des professions lucratives: Cette interception du pe- 
 ** cule diniinueroit la reproduction des revenus,'* — " It is ne- 
 ** cessary that the surc-total of the revenue should enter in- 
 " to the annual circulation, and pervade it in its utmost ex- 
 " tent ; that no pecuniary fortunes be formed, or, at least, tha*^
 
 244' OF PARSIMONY, AS A MEANS 
 
 employed to bring any commodity to thef 
 market, naturally suits itself to the effectual 
 demand, and constantly aims at bringing 
 the precise quantity thither that is suffi- 
 cient to supply the demand ; it follows, 
 that this diminution of demand must occa- 
 sion a similar diminution of the productions 
 of the country. 
 
 " there be a compensation between those that are formed 
 " and those which, from extravagance, return into the circula- 
 '*tion; for, otherwise, the amassing of pecuniary fortunes 
 '* would impede the (distribution of a part of the annual reve- 
 *' nue of the nation, and hold back part of the circulation of 
 " the nation, to the prejudice of the advances necessary for 
 '* the conduct of agriculture, of the recompence of the salary 
 " of the artisans, and of the consumption incident to the dif- 
 '* ferent classes of men who exercise lucrative professions : 
 *' and this reduction would inevitably diminish the revenue 
 *' reproduced." Maximes Genirales du Gouvernement EcO' 
 nomique, par Quesnay^ 
 
 " Le revenu est done le canevas de la d^pense proprement 
 *' dite. II importe que le revenu soit depense, car toute 
 " epargne sur le revenu est diminution de depense, et par une 
 " suite directe de production et de revenu." — *' The revenue, 
 *' then, properly speaking, is the groundwork of the expence ; 
 " it is necessary that the revenue should be expended ; for 
 ** every saving in the revenue occasions a diminution of ex- 
 ** penditure, and, by direct consequence, of production and 
 *« of future revenue.'' Philosophic Rurale^ ou Economic 
 Generale et P ditique de }' Agriculture ^ p. 48. See also Wealtk 
 of Nations, Vol. I. p. 70, and Vol. 11- p. 9, 4to edit.
 
 OF INCREASING WEALTH. 24ii 
 
 Though the opinions of great and eminent 
 men are here referred to for establishing the 
 position, that a diminution of demand must 
 occasion a diminution of produce, that is, 
 of vvealtli J it is not on authority alone that 
 this inference rests. The reasons why it 
 must happen have been stated, and the pro- 
 gress that a diminution of demand would 
 probably make, in curtailing the produc- 
 tion of commodities, was traced out in the 
 case of a supposed diminution of demand 
 for butchers-meat, wine, and mustard ; * 
 and the same reason is applicable to every 
 article of the produce of any country for 
 which there exists a failure of demand. 
 
 But if this effect necessarily attends a 
 diminution of demand, which not only 
 reason, but the authority of all eminent 
 men, concurs in saying must ensue ; an ab- 
 straction of demand, to the extent of fif- 
 teen millions, must have occasioned a simi- 
 lar deficiency of annual production. It fol- 
 lows, therefore, that three hundred mil- 
 lions (calculating the value of the fifteen 
 
 * Seep. 82.
 
 246 OF PARSIMONY, AS A MEANS 
 
 millions of produce which must have been 
 annihilated at twenty years purchase) of 
 real wealth would have been extinguished, 
 before this accumulating fund, with all its 
 boasted activity, could, in all probability, 
 have converted one hundred millions of the 
 revenue into capital. 
 
 In truth, the effects of this diminution of 
 demand, to the extent of fifteen millions, 
 would have been much more formidable 
 than what is here represented ; because it 
 has already been established, that the dimi- 
 nution in value of every commodity, occa- 
 sioned by a failure of demand, must be al- 
 ways much greater than the value of the 
 demand abstracted. * 
 
 Dismal as the consequences of this ex- 
 periment must have been in diminishing 
 the reproduction and revenue, there ap- 
 pear, on the other hand, no good effects 
 likely to have resulted from it in relation 
 to the capital of the country, to counteract 
 it€ €vil effects on the revenue. 
 
 * See p. 88.
 
 OF INCREASING WEALTH. 24*7 
 
 The stockholders, who would have been 
 tempted to sell by the offer of the Commis- 
 sioners of this Sinking Fund, would, it is 
 evident, have had in their possession fifteen 
 millions of capital, upon the employment 
 of which, in such a manner as to return a 
 profit, their income, that is, their subsist- 
 ence, must have depended. To acquire a 
 profit, we know that capital must be em- 
 ployed to supplant or perform a portion 
 of labour, in producing or adapting commo- 
 dities for consumption, and it is hardly 
 possible to suppose, that there could have 
 existed any new channels of so employing 
 capital, at a moment when there was for^ 
 cibly created a diminution of demand for 
 commodities, to the extent of fifteen mil- 
 lions. 
 
 So far from its being reasonable to sup* 
 pose there could have existed, under such 
 circumstances, any opportunity of employ- 
 ing an additional quantity of capital, it is 
 certain, that so great a diminution of de- 
 mand must have thrown out of employ 
 some of that capital which was useful in
 
 248 OF PARSIMONY, AS A MEANS 
 
 supplanting labour, in the progress of bring* 
 ing to market those commodities, for which 
 there could no longer have subsisted a de- 
 mand. 
 
 The only means, therefore, those stock- 
 holders could have had of forcing the capi- 
 tal in their hands into employment, must 
 have been by offering to supplant labour, 
 at a cheaper rate than that at which it was 
 antecedently performed. A competition 
 would thus have arisen ; the profit of capi- 
 tal must have been diminished ; the inte- 
 rest paid for stock or money must have fal- 
 len, and of course the value of fixed annui- 
 ties, or Government securities, must have 
 risen ; and this must have continued pro- 
 gressively, till capital became so abundant, 
 and its profits so diminished, that the pro- 
 prietors would have been induced to re- 
 move it to other countries, where higher 
 profits might be made ; and France would 
 inevitably have been amply supplied with 
 capital, the want of which is the great draw- 
 back on her industry. 
 
 Neither is it theory alone which points
 
 OF INCREASING WEALTH. ^49 
 
 out these evils, as the necessary result of 
 such a measure ; for, as far as practice gives 
 us an opportunity of judging, the accuracy 
 of the inference is uniformly confirmed by 
 experience. When Pope Innocent XI. 
 reduced the interest of his debt from 
 4 to 3 per cent,, and employed the sum 
 saved to accumulate, but a short time elap- 
 sed till the new 3 per cent, fund sold at one 
 hundred and twelve. In like manner, when 
 the interest of the national debt of Eng- 
 land was reduced, in 1717? from 6 to 5 i}er 
 cent,, and the saving devoted to accumula- 
 tion ; the consequence was, that in 1727, 
 from the rise of public securities, there was 
 an opportunity of again reducing the inte- 
 rest from 4 to 3 per cent., and of applying 
 an additional sum to accumulate. This, of 
 course, produced another rise, and to such 
 a degree, that, in the year 1733, we learn 
 from authority, that " the sinking fund was 
 " now grown to a great maturity, and pro- 
 " duced annually about L. 1,200,000 ; and 
 " was become almost a terror to all the in- 
 " dividual proprietors of the public debt.
 
 250 OF PARSIMONY, AS A MEANS 
 
 " The high state of credit, the low rate of 
 " interest of money, and the advanced price 
 *' of all public stocks and funds above par, 
 *' made the great monied companies, and 
 " all their proprietors, apprehend nothing 
 " more than being obliged to receive their 
 " principal too fast ; and it became almost 
 " the universal consent of 7Jiankind, that a 
 ** million a-year was as much as the creditors 
 " of the public could bear to receive in dis- 
 " charge of part of their principal." * 
 ^ Nothing can more forcibly illustrate the 
 truth of the opinions which have been stat- 
 ed, than what Sir Robert Walpole here 
 affirms. If he had been aware of the na- 
 ture and the foundation of the profit of 
 stock; if he had perceived the effects of 
 forced parsimony, not only in depreciating 
 those commodities from which it abstracts 
 a portion of demand, but even in depreci- 
 ating that for which it creates a demand j 
 if he had written on purpose to support and 
 
 * Considerations concerning the Public Funds, the Public 
 Revenues, and the Annual Supplies, by Sir Robert Walpole. 
 p. 56'.
 
 OF INCREASING WEALTH. 251 
 
 illustrate the theory here built upon, he 
 could not have done it with more effect 
 than by stating, " that a million a-year be- 
 " came as much as the creditors of the 
 " public could bear to receive." 
 
 It is remarkable, too, that this is almost 
 the only fact in the whole pamphlet, to the 
 truth of which his adversary, in his reply, 
 seems to subscribe. * And, indeed, Mr 
 Hume, nearly twenty years afterwards, 
 plainly shows, that he was aware of that 
 circumstance, by stating, that, " in times 
 " of peace and security, when alone it is 
 " possible to pay debt, the monied interest 
 " are averse to receive partial payments, 
 
 * " You tell us, that the public creditors were so far from 
 " making any provision for themsehes, either in their separate 
 " or their corporate capacity, that the sinking fund should be 
 *• applied to the discharge of their principal, that, whenever 
 '* it hath been applied to this purpose, the only contest be- 
 '* tween them hath been, who should not be paid. 
 
 *' In another place you tell us, That the South Sea Com- 
 '• pany were so far from looking upon their being first paid 
 "off, as a privilege or beneficial preference, that they ex- 
 " pressly provided against it : This, again, is very true, nor 
 " have we denied it," The Case of the Sinking Fund, bein" 
 a full Reply to a late Pamphlet, entitled, Some Considerations, 
 &c. p. 27.
 
 252 OF PARSIMONY, AS A MEANS 
 
 " which they know not how to dispose of 
 " to advantage." * 
 
 In the Estimate of the Comparative 
 Strength of Great Britain, f Mv Chalmers 
 also states, on the authority of Sir John 
 Barnard, that the effects of the sinking 
 fund were such in the year 1738, that 
 " the great contest among the public cre- 
 " ditors, at that fortunate epoch, was not 
 " so much who should be paid his capital, 
 " as who should be suffered to remain the 
 " creditors of the state j" — ^yet, during the 
 pr'eceding ten 3/ ears, the sinking fund had 
 effected a diminution of little more than 
 four millions of debt. J 
 
 Further, the doctrine here maintained 
 derives strong and ample confirmation from 
 the progressive effect which the following 
 
 • See a note to the first edition of Mr Hume's Discourse on 
 Public Credit, wiiich is suppressed in the later editions. 
 -J" Chalmers's Estimate, p. 1 14. 
 
 + Principal of the National Debt, 172S, L. 51,028,431 
 
 Ditto 1738, 46,661,767 
 
 Intermediate Diminution, L. 4,366,664 
 
 Estimate, p. 1 15#
 
 ©F INCREASING WEALTH. 
 
 25S 
 
 statement shows the sinking fund to have 
 had on the price of public securities during 
 the last peace. 
 
 STATEMENT, showing the Prices at which 3 per cent. 
 Stock was bought by the Sinking Fund, in every Quarter, 
 tVom the beginning of the Year 1787 to the end of the 
 Year 1792. 
 
 
 1787. 
 
 1788. 
 
 
 1789. 
 
 ir. 
 
 Pr. 
 
 Qr. Pr. 
 
 Qr. 
 
 Pr. 
 
 2. 
 
 ending Jan. 31. 74| 
 
 6. - 76 
 
 10. 
 
 - 73^ 
 
 3. 
 
 Apr. 30. 76 
 
 7. - 75^ 
 
 11. 
 
 - 74 
 
 4. 
 
 July 31. 74} 
 
 8. - 74i 
 
 12. 
 
 - 761 
 
 5. 
 
 Oct. 31. 71| 
 
 9. - 7H 
 
 13. 
 
 ' 80| 
 
 
 1790. 
 
 1791. 
 
 
 1792. 
 
 Qr. 
 
 Pr, 
 
 Qr. Pr. 
 
 Qr. 
 
 Pr. 
 
 14. 
 
 ending Jan. 31. 78 
 
 18. - 79i 
 
 22. 
 
 - 88i 
 
 15. 
 
 Apr. 30 7Si 
 
 19. - 79i 
 
 23. 
 
 - 96k 
 
 16. 
 
 July 31 73^ 
 
 20. - 8 If 
 
 24. 
 
 - 90i 
 
 17. 
 
 Oct 31. 7H 
 
 21. - 88| 
 
 25. 
 
 - 90i 
 
 The gradual rise this statement exhibits, 
 though occasionally interrupted by some 
 accidental occurrences, that have, for the 
 moment, retarded or accelerated its pro- 
 gress, clearly marks the operation of a re- 
 gular, steady, and uniformly progressive in- 
 fluence, such as the accumulating fund 
 must inevitably have produced. Yet dur- 
 ing these six years, one would have ima- 
 gined, that so many opportunies must have
 
 254 
 
 OF PARSIMONY, AS A MEANS 
 
 occurred of employing capital in new chan- 
 nels, that the accumulating fund being 
 absorbed in new adventures, could not 
 have diminished the value, that is, the in- 
 terest of capital ; for the number of inclo- 
 sure bills, of road and canal bills, never 
 was so great in so short a time, * whilst 
 the increase of our exports, f of the ton- 
 
 * Table, showing the Number of Acts of Parliament for 
 Roads, Bridges, &c. which passed in each of the following 
 Years : 
 
 Roads and brid- 
 
 1785 
 
 17 SO 
 
 1787 
 
 1788 
 
 i789 
 
 1790 17 9\ 
 
 179^^ 
 
 Iota.. 
 
 
 
 
 
 
 
 
 
 
 ges, 
 
 31 
 
 40 
 
 30 
 
 37 
 
 36 
 
 30 
 
 44 
 
 54 
 
 302 
 
 Canals, harbours. 
 
 
 
 
 
 
 
 
 
 
 &c. 
 
 7 
 
 4 
 
 3 
 
 5 
 
 6 
 
 9 
 
 13 
 
 17 
 
 64 
 
 Inclosures, drain- 
 
 
 
 
 
 
 
 
 
 
 ing, &c. 
 
 22 
 
 25 
 
 1.9 
 
 36 
 
 36 
 
 27 
 
 3.9 
 
 41 
 
 245 
 
 Paving, and otht'i 
 
 
 
 
 
 
 
 
 
 
 parochial im- 
 
 
 
 
 
 
 
 
 
 
 provements, 
 The total, 
 
 20 
 
 14 
 
 14 
 
 14 
 
 18 
 
 20 
 
 20 
 
 19 
 
 139 
 
 80 ! 83 ! 66 
 
 92 
 
 96 
 
 86 
 
 116 
 
 131 
 
 750 
 
 f Amount of the Exports from Great Britain in the fallow- 
 
 ing years : 
 
 Year. L. 
 
 1786, - 16,300,725 
 
 1787, - 18,296,166 
 
 1788, - 18,124,088 
 
 Year. L. 
 1789, 20,013.297 
 790,-20,120,120 
 
 Year. L. 
 1791,-22,731,994 
 1792, - 24,905,400
 
 OF INCREASING WEALTH. 255 
 
 wage of our shipping, * as well as the ex- 
 tension of machinery in every branch of 
 manufacture, was equally remarkable ; and 
 it is certain, that the increase of produce 
 and manufactures must have required an 
 additional capital to circulate them. 
 
 Experience, however, shows us, that this 
 was not the case. Stocks rose from 74 to 
 96 ; that is, the interest or value of capital 
 sunk from four pounds one shilling and 
 one penny, to three pounds two shillings 
 and sixpence per annum ; yet there was 
 then only L. 1,000,000 a-year set aside 
 for accumulation, and the whole sum ac- 
 cumulated during the five years amount- 
 ed to L. 5,424,592 ; * that is, to little more 
 than a third of that which the temerity of 
 
 * Account of the Tonnage of British Shipping cleared out- 
 wards in the following years : 
 
 Year. Tons. Year. Tons. Year. Tons. 
 
 1786,- 982,132 1789,- 1,343,800 1791,. 1.333,106 
 
 1787,- 1,104,7111790,- 1,260,828 1792,- 1,396,003 
 
 1788, - 1,243,206 
 
 + Report of the Select Committee, relating to the Public 
 
 Income and Expenditure, 1791 ; Appendix, X. No. 1. With 
 
 this sum, purchases were made of 3 per cent., and to the 
 
 amount of L. 6,772,350.
 
 ^56 OF PARSIMONY, AS A MEANS 
 
 Mr Pitt projected, on the first year of the 
 return of peace, to abstract from expen-- 
 diture in the acquisition of commodities 
 the produce and growth of the country, 
 and to convert into capital. 
 
 In the receipt of the income-tax, Mr 
 Pitt, however, was disappointed ; it never 
 much exceeded five millions and a half * 
 But if he had remained Minister, and we 
 had enjoyed peace, a sum to this amount 
 would, till the year 1811, have been appli- 
 cable to accumulation, over and above the 
 sum of L. 5,585,572, f applicable to that 
 purpose at the time peace was restored; 
 that is, a sum of upwards of L. 11,000,000 
 would have been annually withdrawn 
 from expenditure on commodities, the 
 produce and manufacture of the coun- 
 try, and applied by law to accumula- 
 tion ; — B. system which never could have 
 
 * The receipt of the income-tax for one year ending 5th 
 April 1801, amounted to L. 5,711,150. — See Resolutions 
 voted by the House of CommoDs. 
 
 ■j- See No. 13. Accounts presented to the House of Com- 
 mous, respecting the public funded debt, ' nd the reductiou 
 thereof, 1802.
 
 OP INCREASING WEALTH. ^7 
 
 been carried into execution, without ef- 
 fecting the ruin of the country, both by the 
 diminution it must have occasioned of its 
 produce and manufactures, and by the 
 means it must have afforded of aggrandiz- 
 ing our rivals on the continent, by furnish- 
 ing them with capital. 
 
 The income tax has now been repealed, 
 and the sinking fund is new-modelled by 
 the 42d Geo. III. cap. 71. By this law, the 
 Sinking Fund established in 1786, and 
 that of the year 1 792, the old and new 
 Sinking Funds, as they are called, are con- 
 solidated ; the provisions concerning the 
 old sinking fund, as to the application of 
 the interest after it amounted to three mil- 
 lions, are done away ; the annuities, as they 
 expired, are directed to be no longer car- 
 ried to the account of the commissioners ; 
 the one per cent, was dispensed with, on 
 the loans of 1798, 1799, 1800, and 1802, 
 amounting in all to the sum of L. 86,796,375, 
 whilst provision was made for the practice 
 being continued on all future loans ; the 
 L. 200,000 annually granted is made a per-
 
 ^58 OF PARSIMONY, AS A MEANS 
 
 manent grant; and the produce of both 
 the new and the old fund is made appli- 
 cable to accumulate at compound interest, 
 till the debt, amounting, at the time of pass- 
 ing the act, to L. 48,987,656, * is extin- 
 guished. 
 
 Even now, then, on the return of peace, 
 as the law stands, there will be an accu- 
 mulating fund of more than six millions 
 per annum, f Six millions must, therefore, 
 be withdrawn from the acquisition of com- 
 modities, the growth and manufacture of 
 the country, and forcibly converted into ca- 
 pital ; a situation which will require much 
 attention from those who have the manage- 
 ment of the country at the time. It is an 
 experiment hitherto untried. The accu- 
 mulating fund has risen to this magnitude 
 during warfare ; and the effects of accu- 
 mulation, during war, are more than coun- 
 
 » See No. 1 3. Accounts presented to the House of Com- 
 mons, respecting the public funded debt, &c. 1802. 
 
 + The sum to be expended in the present quarter, by the 
 Commissioners of the Sinking Fund, is L. I,668,l6l, 12s. Id.
 
 OF INCREASING WEALTH. S59 
 
 teracted by the extraordinary expenditure 
 it occasions. The accumulating fund now 
 provided by law, is nearly six times greater 
 than any of which we have had experience 
 during peace. Indeed, it amounts, in one 
 year, to a sum almost equal to all that was 
 accumulated betwixt the year 1717 and 
 and the year 1732 j* which reduced the 
 value of capital from 6 to S per cent. ; for, 
 in this last year, 3 per cents, were at 
 one hundred and one. It is larger, too, 
 than the sum total of what was accumu- 
 lated during the last peace, f and the Sper 
 cents, were then gradually raised from sixty 
 to nearly one hundred ; that is, the value 
 of capital was reduced from 5 to 3 per 
 cent. 
 
 Under all these circumstances, those who 
 
 * The sum-total applied for this purpose, during that pe- 
 riod, amounted to L. 6,464,132. See Sinclair's History of 
 Public Revenue, Part II. p. 122. 
 
 + The sum issued to the Commissioners of the Smking Fund 
 betwixt the 1st of August 1786, and the 1st of August 1791) 
 amounted to L. 5,424,592. Report of the Committee of the 
 House of Commons on the Public Expenditure, 1791? App. X. 
 No. I.
 
 260 OF PARSIMONY, AS A MEANS 
 
 have the management of the Public Trea- 
 sury on the return of peace, must be care- 
 ful, on the one hand, lest, from the abstrac- 
 tion of demand to the amount of six mil- 
 lions, the price of commodities be reduced 
 to such a degree as to discourage repro- 
 duction ; they must be cautious not to mis- 
 take, for the effects of abundance, that 
 which in reality may be only the effect of 
 failure of demand. On the other hand, 
 they must be scrupulously attentive to the 
 effects of this forced increase of capital ; 
 for, if 3 per cents, should by this means be 
 quickly raised to par, or, in other words, 
 if the value of capital should be reduced 
 from upwards of 5 per cent, to 3, and the 
 same causes continue to operate its farther 
 reduction, in the present situation of Europe 
 it will inevitably furnish other nations with 
 what will render them most formidable. 
 
 That both these consequences must en- 
 sue is undoubted, and that, too, with a de- 
 gree of unexpected rapidity. Of the ab- 
 straction of demand to the amount of six 
 millions a-year, from goods the growth and
 
 OF INCREASING WEALTH. 26l 
 
 produce of the country, we have no expe- 
 rience ; neither have we experience of the 
 effects of forcibly adding six milhons annu- 
 ally to the capital of the nation ; but since 
 there existed an accumulatinf]^ fund in this 
 country, six millions have never been ac- 
 cumulated by the public even in a course 
 of years, without creating such abundance 
 of capital in proportion to the demand for 
 it, as to reduce its value to 3 per cent, per 
 annum. 
 
 That the present situation of the country 
 is different from what it was at any former 
 period, is most certain. That it may, there- 
 fore, be able to sustain a larger accumula- 
 tion than formerly, is possible ; but accu- 
 mulation of capital must, at all times, have 
 its bounds, beyond which, if it is enforced, 
 the consequences which have been stated 
 must inevitably be produced. 
 
 We already know, that the value of ca- 
 pital may be reduced from 6 to 3 per cent 
 by forced accumulation ; and it is impos- 
 sible to say how low it may be brought by 
 the continued progress of accumulation,
 
 26^ OF PARSIMONY, AS A MEANS 
 
 which increases the quantity of capital ; 
 whilst, far from increasing, (by the effect 
 it has of abstracting revenue from expendi- 
 ture in consumable commodities, and con- 
 sequently of abridging consumption,) it in- 
 evitably diminishes the demand for it. 
 
 If, indeed, the whole of the capital 
 which must by this means be created, 
 could possibly be kept within the country, 
 it is demonstrable that, before any consi- 
 derable progress could be made in this sys- 
 tem of accumulation, the value of capital 
 must be reduced to a trifle. 
 
 Nothing but a confusion of ideas con- 
 cerning the nature of the profit of capital 
 could give birth to the fancy, or induce any 
 one to cherish the opinion, that capital 
 might be increased to an unlimited degree; 
 for the moment the profit of capital is re- 
 garded as arising from its supplanting or 
 performing labour, it is at once evident, 
 that, as the means of consuming must, at 
 all times, limit the quantity of labour that 
 can be employed in preparing things for 
 consumption, so it must limit the amount
 
 OF INCREASING WEALTH. 26S 
 
 of capital that can be used in co-operating 
 with the hands of man, for the purpose of 
 performing labour ; and that, in proportion 
 as forced parsimony abstracts from the 
 funds that would be allotted to acquire con- 
 sumable commodities, the demand for la- 
 bour, whether performed by the hand of 
 man, or by capital, must be diminished. 
 
 To what degree capital might be augment- 
 ed, if produced universally over the world by 
 the increased industry of man, directed to 
 the production and formation of those 
 things every way useful to supplant and 
 perform labour, (the sole method in which 
 the capital of a country and its wealth can 
 at once be increased^ with benefit to man- 
 kind, is a question we are not here called 
 upon to agitate. 
 
 What is affirmed, and what we have at- 
 tempted to establish by argument, is, \st. 
 That the old maxim, " a penny saved is a 
 " penny gained," is not applicable to pub- 
 lic wealth ; 2d, That a nation, in the cir- 
 cumstances and situation of the British em- 
 pire, cannot, with impunity, either forcibly
 
 ^64 OF PARSIMONY, AS A MEANS 
 
 abstract a sum so large as has been pro- 
 posed, from expenditure in consumable 
 goods of its produce and manufacture, or 
 forcibly accumulate capital with such rapi- 
 dity. 
 
 For no nation, without injury to the pro- 
 gress of its wealth, can thus rapidly in- 
 crease its capital, at the expence of ab- 
 stracting annually so large a sum from ex- 
 penditure in consumable commodities ; and, 
 in the present situation of Europe, if this 
 country could, by parsimony, render capi- 
 tal so abundant, as it is impossible to pre- 
 vent the removal of it, it would be rela- 
 tively injurious to our interest ; for the si- 
 tuation of other nations, and those, too, 
 whose interests, at present, we would least 
 wish to promote, is such, that they would 
 derive more benefit from it than would re- 
 sult to the British Empire. 
 
 In truth, though Parliament has formally 
 announced, by an act of the legislature,* 
 the extinction of the national debt in for- 
 
 * See Appendix, No. VI, containing extracts of cap. 71, 
 42cl Geo. III.
 
 OF INCREASING WEALTH. ^265 
 
 ty-five years ; or, in other words, the de- 
 sign of abstracting from expenditure in 
 consumable commodities, and forcibly con- 
 verting into capital, within that period, a 
 sum amounting nearly to five hundred mil- 
 lions ; that is, to more than six times what 
 has been esteemed the amount of the 
 whole capital now employed in the conduct 
 of our foreign trade ; * — that act, sooner or 
 later, must be reconsidered ; for the im- 
 possibility of accumulating a penny till it 
 amounts to the value of five hundred mil- 
 lions of earths of solid gold, is not more 
 apparent, than the impossibility, without 
 the ruin of the country, of abstracting from 
 expenditure, in its goods and manufactures, 
 a revenue so large as L. 5,585,572, and 
 that, too, annually increasing at compound 
 interest for forty-five years, f 
 
 * See Mr Pitt's Computation, Appendix, No. tV, 
 •}" See Appendix, No. VII. where a statement is given of 
 the sum that, under this system, if pursued, must every half 
 year be abstracted from expenditure in goods the produce and 
 manufacture of the country, and forcibly converted into capi- 
 tal during the forty-five years, which, before the expiration 
 of that term, will be found to amount to upwards of 
 L. '20,000,000 /ser annum.
 
 ^66 OF PARSIMONY, AS A MEANS 
 
 Nothing, indeed, can be more absurd, 
 than the golden dreams with which Parlia- 
 ment and the nation have been amused 
 through the medium of the calculations 
 that have been formed on this subject. * 
 Perhaps it may with reason be thought, 
 that nothing could be more unfortunate 
 than the faith that seems to be reposed in 
 them. 
 
 For though the sinking fund, the off- 
 spring of this delusion, never can, without 
 ruining the country, be accumulated to an 
 amount equal to the debt of the nation, 
 yet its existence has greatly facilitated the 
 contracting of debt ; that is, it has enabled 
 those who had the management of the 
 government more completely to derange 
 the natural and most advantageous distri- 
 bution of the property of the country ; 
 — that distribution, which, giving to the 
 possessor the greatest real interest in the 
 
 * See Appendix, No. VIII. containing a statement pre- 
 sented to the House of Commons, 7lh April 1802, of the 
 amount of stock which will be purchased in forty-five and 
 forty.six years, at the several rates of interest, 3, 3|, 3f , 3^ 
 and 4 per cent, by a sinking fund of L. 5,585,57'2 per annum.
 
 OP INCREASING WEALTH. 267 
 
 property he has to manage, affords the 
 greatest encouragement to those exertions 
 of industry in the conduct of it, which 
 ahke benefit the proprietor and the pubHc. 
 The extreme importance of the subject 
 alone appears a sufficient apology for hav- 
 ing gone so much at length into the consi- 
 deration of the legislative provisions for 
 paying off the national debt. But, indeed, 
 it was necessary, in giving an idea of the 
 origin and progress of wealth, to show that 
 it can alone be increased by the means by 
 which it is produced; and this could not be 
 effected without investigating the conse- 
 quences of parsimony, (which has been hi- 
 therto considered as the most active means 
 of increasing wealth,) and without fully 
 explaining why parsimony, whether private 
 or public, whether the effect of the deprav- 
 ed taste of individuals, or of an erroneous 
 system of legislation, far from being the 
 means of increasing, must, if pushed be- 
 yond a certain extent, prove fatal to the 
 progress of public wealth. * 
 
 * Since the publication of the first edition, the arrangement
 
 268 OF PARSIMONY, AS A MEANS, &C. 
 
 Having now endeavoured to do away 
 the impression which prejudice has created 
 on this subject, we are at hberty to proceed 
 to the consideration of how far, and in 
 what manner and proportions, the produce 
 of land and of labour, whether performed 
 by the hand of man or by capital, contri- 
 butes to the increase of national wealth ; 
 for as these constitute the sole sources of 
 public wealth, so they must form the sole 
 means of increasing it. 
 
 of the sinking fund has been, on two different occasions, inter- 
 fered with, but the same principle has, throughout, been perse- 
 vered in ; and, as the subject is here introduced, not for the 
 purpose of giving a history of that establishment, but to illus- 
 trate the mistake that writers on political economy have 
 fallen into, in considering parsimony to be a source of public 
 wealth, it is therefore unnecessary to enter into minute de- 
 tails of the plans that have been adopted ; mare particularly 
 as the effects of this accumulating fujid have hitherto been uni- 
 formly counteracted, even since the peace, by the money go. 
 vernment has been under the necessity of borrowing, to defray 
 the national expenditure, as will distinctly appear from the ac- 
 count contained in the Appendix, No. IX, which shows the 
 amount of debt contracted, and the amount of debt redeemed, 
 in each year, from the 1st of February 1786, when the sink- 
 ing fund was established, to the 1st of January 1818; and 
 also, the total amount of unredeemed debt in each of these 
 years.
 
 CHAP. V. 
 
 OF THE MEANS OF AUGMENTING WEALTH, 
 AND THE CAUSES THAT REGULATE ITS IN- 
 CREASE. 
 
 Though land, labour, and capital, have been 
 considered as forming the sources of the 
 wealth of mankind, and though we have 
 endeavoured to establish the opinion, that 
 wealth can alone be increased by the means 
 by which it is produced, it does not from 
 thence follow, tliat land, labour, and capi- 
 tal, should each of them afford means of in- 
 creasing wealth ; far less that they should, 
 in different stages of society, contribute to- 
 wards its increase, in any thing like similar 
 proportioHvS. 
 
 It has already been observed, that, in the 
 early state of hi sexistence, man must have 
 derived a greater proportion of his wealth
 
 270 OF THE MEANS 
 
 from land than at any subsequent stage of 
 society. To the produce of the earth, 
 which nature presented to his view, he 
 must, at first, have had recourse for the sa- 
 tisfaction of all his appetites and desires. 
 
 His bodilv labour, in this state of socie- 
 ty, must, in its object, have been similar to 
 that of the other animals, calculated to 
 appropriate and prepare for consumption 
 those things which nature afforded ; and, 
 under such circumstances, the share of his 
 labour must have been small, indeed, which 
 could either be supplanted or performed by 
 capital. The club with which he destroys 
 his prey ; the wooden knife with which he 
 prepares it for consumption; the hook with 
 which he draws towards him, and appro- 
 priates the fruit of trees ; the hatchet of 
 stone with which he obtains and fashions 
 those his rude instruments, form nearly the 
 whole capital that the history of savage na- 
 tions displays to our view. 
 
 Thus circumstanced, like the rest of the 
 animal creation, on nature he depends alone 
 for the means of contiiming his existence.
 
 OF AUGMENTING WEALTH, &C. 271 
 
 The fertility of some seasons bestows an 
 ample, the sterility of others affords only a 
 scanty supply ; and man seems little to sur- 
 pass other animals, either in dexterity in se- 
 curing the objects his appetites suggest as 
 desirable, or in ingenuity in preserving and 
 adapting them for consumption. 
 
 Even in this state, however, as an animal 
 cannot be captured and appropriated, or a 
 quantity of fruit collected and conveyed 
 home without labour, his wealth cannot be 
 considered as exclusively proceeding from 
 land, though this is obviously the great and 
 principal source from whence he acquires 
 it. 
 
 But the moment man appears in the state 
 of a shepherd, or an husbandman, we per- 
 ceive his labour, whether performed by his 
 hands or capital, taking a new direction, 
 and acting in a sphere peculiar to the hu- 
 man species. 
 
 It is no longer employed, like that of the 
 other animals, in securing or fashioning the 
 scanty supply which nature affords ; but 
 points itself to the more important object.
 
 ^7^ OF THE MEANS 
 
 of increasing the quantity, and meliorating 
 the quality, of those productions of nature 
 that are most desirable to him. 
 
 The spontaneous produce of the earth, at 
 first the chief source of his wealth, nowise 
 contributes to the increase of it ; for it is 
 to his personal labour, and that performed 
 by the capital he creates, to which he owes 
 the augmented production of those things, 
 the first supply of which he derived from 
 nature. 
 
 The increase of the wealth of mankind 
 may, therefore, be properly considered as 
 arising from labour, whether personal or 
 performed by capital, directed towards the 
 increase of the quantity, and melioration of 
 the quality, of the productions of nature ; 
 and from that description of labour, whe- 
 ther performed by his hands or by capital, 
 from which, in a certain degree, he, in com- 
 mon with other animals, derived the objects 
 of his desire from his earliest existence ; to 
 wit, from labour, directed towards appro- 
 priating and adapting to consumption what 
 forms his wealth.
 
 OF AUGMENTING WEALTH, &C. 273 
 
 It must be observed, too, that this last 
 source of the increase of the wealth of man- 
 kind is, in the progress of society, in some 
 degree narrowed, as the productions of the 
 ocean are almost the sole objects of desire, 
 that, in an advanced stage of society, re- 
 main utiappropriated. 
 
 In civilized society, therefore, with the 
 exception of what he derives from the 
 ocean, the wealth of man can alone be in- 
 creased : — 
 
 1. By labour, whether personal or per- 
 formed by capital, employed in increasing 
 the quantity, and meliorating the quality, 
 of the objects of his desire ; that is, by 
 agriculture. 
 
 2. By labour, w^hether personal or per- 
 formed by capital, employed in giving form 
 to, and adapting commodities for, consump- 
 tion ; that is, by manufacturing industry. 
 
 Though we have already vindicated ma- 
 nufacturing industry from the attempts of 
 some philosophers, to prove that it is total- 
 ly unproductive of wealth, it in truth, how- 
 ever, acts a very subordinate part in the 
 
 s
 
 T{4i OF THE MEANS 
 
 formation of the increased wealth of every 
 society, unshackled by legal restrictions or 
 forced distributions of property. 
 
 It is evident, that the wealth arisincj from 
 giving form to, and adapting commodities 
 for, consumption j must depend upon the 
 production of a sufficient quantity of raw 
 materials to be fashioned, as well as upon 
 the existence of a sufficiency of food and 
 necessaries, for the sustenance of those who 
 are so employed. 
 
 In civilized society, the multiplied rela- 
 tions which the varied distributions of pro- 
 perty create, tend to render the subject 
 more obscure. Perhaps, therefore, there is 
 no means of forming a more accurate idea 
 of the relative importance of agricultural 
 and manufacturing industry, in increasing 
 the wealth of a community, throughout 
 the whole progress of society, than by con- 
 sidering the relative importance of land and 
 labour, in the formation of wealth, antece- 
 dent to the period in which man directed 
 his labour to the object of increasing the 
 quantity, or meliorating the quality, of com-
 
 OF AUGMENTING WEALTH, &C. 275 
 
 modities : for agricultural industry main- 
 tains, in all periods of society, the same pre- 
 eminent relation to manufacturing industry, 
 in the formation of wealth, that land then 
 bore to labour ; as man, in that state, de- 
 rived from the spontaneous productions of 
 the earth, accurately and distinctly, the 
 same description of wealth with which, at 
 subsequent periods of society, agricultural 
 industry exclusively furnishes him ; w^hilst, 
 in like manner, manufacturing industry 
 contributes to his wealth in every stage of 
 society, comparatively in the same degree 
 that labour, whether performed by his 
 hands or by capital, did in that early and 
 rude period of his existence. 
 
 In different civilized societies, the distri- 
 bution of manufacturing industry, employ- 
 ed in preparing the produce of the earth 
 for consumption, is various. Great quan- 
 tities of it, in some communities, are ex- 
 pended for the satisfaction of the desires of 
 a few, whilst the rest of the society uncon- 
 sciously suffer, not only from the loss of 
 the share of manufacturing industry, in
 
 ^76 OF THE MEANS 
 
 adapting for consumption what forms the 
 objects of their desire; but from a diversion 
 to the formation of those things that are 
 calculated to flatter the whims of the luxu- 
 rious, of a great portion of that labour and 
 capital which would naturally, and more 
 advantageously for the community at large, 
 be employed in procuring, by means of 
 agricultural industry, an ample supply of 
 the necessaries of life. 
 
 Though, from this circumstance, manu- 
 facturing industry, in some societies, ac- 
 quires an appearance of importance, yet the 
 relation which, from the nature of things, 
 agricultural and manufacturing industry 
 must inevitably bear to one another, never 
 can be altered. 
 
 In considering the increase of the wealth 
 of mankind, it is the causes that regulate 
 the distribution of industry, and the conse- 
 quences that arise from the manner in 
 which it is distributed, that form by far 
 the most interesting objects of speculation : 
 and it is these which will here form the 
 chief subject of consideration.
 
 OF AUGMENTING WEALTH, &C. 277 
 
 Before, however, proceeding to this in- 
 vestigation, the relative importance of la- 
 bour and capital in increasing wealth, whe- 
 ther employed in manufacturing or agri- 
 cultural industry, presents a question which 
 forces itself into consideration by the man- 
 ner in which it has been treated by almost 
 all writers on political economy. 
 
 The dexterity that man acquires in per- 
 forming labour, by confining himself to 
 one particular branch, has been dwelt upon 
 from the times of Xenophon to the present 
 day. * 
 
 * ** Nor are these, which have been mentioned, the only 
 " reasons why the dishes sent from the king's table are 
 " grateful to those who receive them ; they are, in themselves, 
 " far more delicious to the taste than others. And, indeed, 
 " it is not surprising that this should be the case; for as 
 " other arts are practised to much greater advantage in 
 " large cities, so the king's viands are dressed in the most 
 " exquisite manner. For, in small towns, the same per- 
 " sons are employed to make a bedstead, a door, a plough, 
 " a table : — (frequently, too, the very same man is a house- 
 '* builder, and thinks himself well off if he thus finds a 
 *' sufficient number of employers to enable him to earn a 
 " livelihood. It it impossible, however, that a man prac- 
 " tising a great variety of trades can be expert in them 
 *' all :)-P-but, in great cities, where there are many who
 
 278 OF THE MEANS 
 
 This idea has, indeed, been carried so 
 far, that the legislation of some countries 
 seems to have been conducted on the per- 
 
 " have a demand for each article, an individual gets a suf- 
 " fjcient living by exercising a single profession; — and not 
 " even the whole of that ; but one makes shoes for men, and 
 *' another for women only. Sometimes even one man 
 *' maintains himself by sewing shoes, and another by cutting 
 ** them out: one by cutting and shaping garments, and ano- 
 *' ther, without interfering with any other part of the business, 
 *' by joining the pieces together. A man, therefore, who con-p 
 ** fines himself to one simple department of workmanship, 
 *' must, of necessity, execute it in the best manner. The case 
 ^' is precisely the same with respect to the preparing of food • 
 *' for he who has but one and the same person for his bed- 
 *' maker, his butler, his baker, his cook, and his caterer, must 
 *' lay his account with being but indiflfercntly served ; but 
 ** where the sole occupation of one person is to manage the 
 '* boiling, and of another the roasting of the meat; where one 
 *' is engaged only in boiling, and another in frying fish; 
 *' where one makes bread, not of all sorts, but restricts himself 
 ••* to the furnishing of one species of an approved good quali- 
 " ty ; it seems to me, that, while the work is thus arranged, it 
 ^' must, in its several parts, be performed in the most perfect 
 ** manner." Cyrop. Book viii. 
 
 This passage in Xenophon was pointed out to me by my 
 learned friend Professor Dalzel, to whom I owe likewise the 
 above translation. See the original, Appendix, No. X. 
 
 " The advantages accruing to mankind, from their betaking 
 " themselves severally to different occupations, are very great 
 " and obvious ; for, thereby, each becoming expert and skilful 
 " in his own particular art, they are enabled to furnish one
 
 OF AUGMENTING WEALTH, &C. 279 
 
 suasion, not only that labour was best per- 
 formed when the attention is confined to 
 one particular branch ; but, on the belief 
 that men acquire additional dexterity, in 
 executing that species of labour wliich they 
 have seen perfi>rmed from their earliest in- 
 fancy. On this principle, professions have 
 been made hereditarv, as was the case in 
 Egypt in some parts of India, and in Peru. 
 But the inconveniencies of this system are 
 apparent, and the idea has been generally 
 reprobated. 
 
 The opinion that the division of labour 
 was beneficial, seems formerly to have been 
 sanctioned by the legislature of this coun- 
 try, as it was enacted by a statute, 27th of 
 Edward III., " That artificers, or handi- 
 " craftsmen, should use but one mystery ;'' 
 and, of late years, the advantages attending 
 the division of labour have been esteemed 
 of such primary importance, by the author 
 
 '* another with the products of their respective labours, per- 
 «* formed in a much better manner, and with much less toil| 
 ** than any one of them could do of himself." — Harris's Essay 
 ®n Money and Coins, Part I. p. l6.
 
 280 . OF THE MEANS 
 
 of the Wealth of Nations, as to hiduce him 
 to declare, that " it is the great multiplica- 
 " tion of the productions of all the difFer- 
 " ent arts, in consequence of the division 
 " of labour, which occasions, in a well-go- 
 *' verned society, that universal opulence 
 " which extends itself to the lowest ranks 
 " of the people." * 
 
 The extreme advantage of the division 
 of labour, in m creasing wealth, is an idea 
 which appears to be derived from contem- 
 plating the number of distinct operations 
 that contribute towards the formation of 
 some of our most trifling manufactures, 
 such as the trade of pinmaking, the pro- 
 fession which is, indeed, generally resorted 
 to, to illustrate the importance of the divi- 
 sion of labour. 
 
 Even in the conduct of this manufacture, 
 however, the benefit obtained by any de- 
 gree of habitual dexterity, that can be cre- 
 ated by the division of labour, or by the 
 saving of time which would otherwise be 
 
 * Wealth of Nations, Vol. I. p. 13. 4to edit.
 
 OF AUGMENTING WEALTH, &C. 281 
 
 lost in passing from one species of work to 
 another, nowise contributes towards expe- 
 dition in forming the article, in comparison 
 of the circumstance of supplanting and pei- 
 forming labour by capital. Without the 
 machinery, which the faculty that man 
 possesses of supplanting labour by capital 
 introduces, no great progress could have 
 been made in the rapidity with which pins 
 are formed ; and one man, with the use of 
 this machinery, though he goes through 
 and performs all the operations himself, 
 must obviously manufacture more pins in 
 an hour, than would be performed in a 
 month, or even in a year, by any number 
 of men amongst whom the labour could be 
 divided, if unaided by the circumstance of 
 part of their labour being supplanted and 
 performed by capital. 
 
 It is, in truth, the great and distinguish- 
 ing advantage which man possesses of sup- 
 planting and performing labour by capital, 
 in conjunction with the power of directing 
 his labour to the increase of the quantity, 
 and melioration of the quality, of the pro-
 
 282 OF THE MEANS 
 
 ductions of nature ; (both faculties peculiar 
 to the human species,) which form the 
 means of procuring the wealth and com- 
 forts enjoyed by civilized society. 
 
 In the annals of the transactions and ne- 
 gociations that have taken place between 
 different nations on the subject of commer- 
 cial arrangements, the danger of admitting 
 9, country to a commercial competition, 
 because the division of labour was there 
 carried farther than in any other, is a thing 
 unheard of; whilst the constant and uniform 
 ground of objection, urged by men whose 
 prejudices lead them to think that a com- 
 mercial intercourse may be conducted be- 
 twixt two nations, in a manner advantage- 
 ous to one, and injurious to the other, is 
 the superiority that the one country has 
 over the other, derived from dexterity in 
 supplanting and performing labour by ca- 
 pital. * 
 
 * See' Appendix, No. XL containing extracts from twip 
 dififerent memorials published in France at the time of th^ 
 Commercial Treaty with this country. 
 
 7
 
 OP AUGMENTING WEALTH, &C. Q83 
 
 If, indeed, further confirmation was 
 wanting to establish that this is the essen- 
 tial circumstance which gives birth to all 
 improvement in the execution of labour, 
 it is amply to be found in every statement 
 that ever came from any man practically 
 concerned in any branch of manufacture ; 
 as it is uniformly to the introduction of 
 some sort of machinery, to the effects of the 
 application of chemistry to manufactures, or 
 to the increase or command of capital en- 
 abling the manufacturers to reduce the 
 price, to which the extension of sales is at- 
 tributed ; * and if the explanation that has 
 been given of the nature of the profit of 
 stock is just and satisfactory, it follows, 
 that ascribing the success of a manufactory 
 to the command of capital, is, in other 
 words, attributing it to the circumstance of 
 labour being supplanted by capital, as ca- 
 pital can alone be advantageously and pro- 
 fitably employed in performing this office. 
 
 * See, on this subject, Appendix, No. XII. where various 
 examples in support of this opinion are extracted from differ- 
 ent commercial publications.
 
 284 OF THE MEANS 
 
 It is regarding the division of labour as 
 the great source of human improvement, 
 that has led the author of the Wealth of 
 Nations to state, that " the impossibility of 
 " making so complete and entire a separa- 
 " tion of all the different branches of la- 
 " hour employed in agriculture, is perhaps 
 " the reason why the improvement of the 
 " productive powers of labour in this art 
 *' does not always keep pace with their im- 
 " provement in manufactures ;" * whereas, 
 in reality, nothing exhibits in so striking a 
 point of view the improvement of the hu- 
 man race in the dexterous execution of la- 
 bour, as the expedition and success with 
 which, b}^ two or three individuals, a large 
 field is prepared for the reception of seed, 
 compared with the time that it would cost 
 ten times the number of men to do the 
 same work, if unaided by the operation of 
 capital in supplanting labour; and with 
 the imperfect manner in which it would, 
 after all, be executed, if the work w^as to 
 be performed by the hand of man alone. 
 
 * Wealth of Nations, Vol. II. p. 8. 4to edit.
 
 OF AUGMENTING WEALTH, &C. 285 
 
 Nothing has a more powerful effect in 
 misleading even the best and most accurate 
 understandings, than an anxious desire to 
 maintain a favourite opinion, or to support 
 a favourite theory ; and there is perhaps no 
 stronger illustration of this unfortunate 
 tendency, than wliat is to be derived from 
 the strained manner in which it has been 
 attempted to estabUsh the opinion, that the 
 division of labour is the cause of that uni- 
 versal opulence which fortunately prevails 
 in many civilized societies. 
 
 To impress this belief, the introduction 
 of machinery has been stated as originally 
 owing to the division of labour, of which 
 it is considered as a mere consequence. 
 
 But,in truth, the history of man shows 
 us, that the simplest and most efficacious 
 machines for supplanting labour — (instru- 
 ments with which habit has so familiarized 
 us, that we hardly dignify them with the 
 name of machinery) — are introduced, at an 
 early period of society, when the division 
 of labour is comparatively unpractised and 
 unknown, for the purpose of supplanting
 
 ^86 OF THE MEANS 
 
 the personal labour of man in the conduct 
 of agricultural industry ; — an art which, 
 though its pre-eminence in the production 
 of wealth is acknowledged, (even by those 
 who wish to establish, tliat the division of 
 labour is the great source of the increased 
 opulence of mankind,) is in no period of 
 society distinguished by reaping benefit 
 from the division of labour. * 
 
 * '' The superiority which the industry of the towns has 
 " everywhere in Europe over that of the country, is not alto- 
 *' gether owing to corporations and corporation laws. It is 
 " supported by many other regulations. The high duties upon 
 " foreign manufactures, and upon all goods imported by alien 
 '* merchants, all tend to the same purpose. Corporation laws 
 " enable the inhabitants of towns to raise their pi ices, without 
 *' fearing to be undersold by the free competition ot their own 
 " countrymen. Those other regulations secure them equally 
 "against that of foreigners. The enhancement of price occa- 
 " sioned by both, is everywhere finally paid by the landlords, 
 " farmers, and labourers of the country." Wealth of Nations, 
 Vol. I. p. 159. 4toedit. 
 
 " Land, mines, and fisheries, require all both a fixed and a 
 " circulating capital to cultivate them ; and their produce re- 
 " places with a profit nut only those capitals, but all the others 
 « in the society." Ibid. p. 338. 
 
 *' This impossibility of making so complete and entire a se- 
 " paration of all the different branches of labour employed in 
 " agriculture, is, perhaps, the reason why the improvement of 
 *» the productive powers; of labour in this art does not always
 
 OF AUGMENTING WEALTH, &C. 287 
 
 Neither does it appear, that there is any 
 ground for attributing to this circumstance 
 the modern improvements of machinery, 
 in the conduct of manufacturing industry. 
 The division of labour tends to confine the 
 attention ; and, of course, the knowledge 
 of the workman, to the performing of one 
 simple operation : whereas, the perfection 
 of manufacturing machinery is to com- 
 bine and embrace the execution of the 
 greatest possible variety of operation in the 
 formation of a commodity, by the use of 
 
 *' keep puce with their improvement in manufactures.'' Ibid, 
 p. 8. 
 
 " It is the great multiplication of the productions of all the 
 " difterent arts, in consequence of the division of labour, 
 '• which occasions, in a well-governed society, that universal 
 " opulence which extends itself to the lowest ranks of the peo- 
 " pie." Ibid. p. 13. 
 
 Though, from the two first of these passages, it appears that 
 land is considered by the author of the Wealth of Nations as 
 the great, and almost sole, source of wealth ; and though, in 
 the third passage, agriculture is stated to reap comparatively 
 but little benefit from the division of labour; yet, in the last 
 the division of labour is deemed to be the cause of that univer- 
 sal opulence, which, as a well-governed society, extends itself 
 to the lowest ranks of the people. 
 
 Hotio can these opinions be reconciled ?
 
 288 OF THE MEANS 
 
 one machine. * It appears, therefore, that 
 the habits of thinking, which the division 
 of labour tends to generate in the manufac- 
 turer, (if they have any effect on the in- 
 vention and improvement of machinery,) 
 must be detrimental ; as they are destruc- 
 tive of that train of thought which leads to 
 the perfection of machinery. 
 
 Indeed, the division of labour has been 
 recently regarded as hostile to the perfec- 
 tion of manufacturing industry by some 
 writers, vvdio, without any display of the- 
 ory, exhibit great practical intelligence 
 concernino; the conduct of our manufac- 
 tures. In some of our most successful and 
 important branches of manufactory, those 
 
 * Of this any one may be satisfied, who chooses to look at 
 the cotton mills now in use, or at the machines formed on the 
 model of that at Derby, for the erecting of which, in 1734, 
 Parliament rewarded Sir Thomas Lombe. — " This machine is 
 " said to have contained 26,586 wheels, and 97i74() move- 
 " ments, that work 63,726 yards of silk at every turn of the 
 " wheel; that is to say, 318,504>,9G0 yards in twenty-tour 
 " hours, at three turns of the wheel per minute." Advantages 
 and Disadvantages of Great Britain with regard to Commerce, 
 p. 122. Load. 1754-. 
 
 11
 
 OF AUGMENTING WEALTH, &C. SS9 
 
 companies are stated to be the most pros- 
 perous, who concentrate, under one con- 
 cern, the whole process the raw material 
 undergoes, till it is fit for use. To this 
 concentration the cotton trade is said to 
 be indebted for its present flourishing 
 state ; and the same system is now preva- 
 lent in the manufacture of woollen cloth. 
 The routine of business, when conducted 
 in this manner, is reduced into so regular a 
 form, and so little time is lost in going from 
 one operation to another, that the manufac- 
 turer, two months after receiving the raw 
 material from the merchant, can with ease 
 return the piece goods ready for exporta- 
 tion, which could not be effected, if all the 
 various operations were subdivided, and 
 the conduct of each formed the object of a 
 separate concern. * 
 
 * A few years ago, (and in some parts it is still so,) the card- 
 ers and rowers of cotton wool were a distinct body from the 
 Spinners of the yarn; but now the majority of our spinners find 
 it much more to their interest to embrace and carry on this 
 branch of the business within therasflves ; and the most prosper- 
 ous companies in the trade are those who concentrate, under one 
 concern, the whole process of the manufactory from the ra'y 
 
 T
 
 290 OF THE MEANS 
 
 The eagerness and anxiety of the author 
 of the Wealth of Nations to enforce this 
 
 material, until the article is fit for use. The routine of business 
 is reduc( d to so regular a form, so little time is lost in going 
 from one operation to another, and articles of such superior 
 texture are produced at so easy a rate, that I may saiely say» 
 to this concentration alone is the cotton trade indebted for its 
 present flourishing situation ; and were the whole manufactur- 
 ers throuohuut the kmgdoro thus to be combined, it would 
 turn easily upon one hinge without giatmir or jarring. 
 
 It IS a known fact, that, in this mode, the manufacturer has 
 frequently received the raw materials from the merchant, and 
 in the course of two months returned the piece goods ready 
 for exportation. But, if these different operations are subdi- 
 vided, could we supply the foreign merchants with -the best 
 piece ^o')ds at the lowest prices? — Circumstances which in- 
 crease the demand, and are undoubtedly objects of the greatest 
 national advantage. No persons, therefore, but those who 
 confine themselves solely to the exportation of twist, can ob- 
 ject to this plan ; and their objections are only grounded upon 
 their individual interests, not those of the country. 
 
 The dyers also, by adopting this course, have risen to what 
 they U'lW are. They were formerly employed, by the country 
 people and shop-keepers, to stamp and dye remnants of cloth; 
 and thus acquired the name of stampers or printers. 
 
 These fancy articles came into vogue, and the demand 
 for them increasing, the printer augmented his number of 
 hands. 
 
 In the course of time, in the country, the printer's esta- 
 blishment being increased, he did not choose to risk a pre- 
 carious employ, but began to purchase the cloth itself, and 
 proceed to print on his own account. This being one step to 
 improvement, he next found it would be still more to his ad-
 
 OP AUGMENTING WEALTH, &C. gQl 
 
 his favourite opinion, has made him assert, 
 that " a great part of the machines em- 
 vantage to become his own weaver ; this measure also suc- 
 ceeds ; and in the course of a short time, he betakes himself 
 to spinning, and we find him ultimately his own spinner, wea- 
 ver, bleacher, dyer, and printer, and enabled to produce an 
 elegant fabric at an easy rate.-1-Observations founded on Facts, 
 upon the propriety or impropriety of exporting Cotton Twist, 
 by G. Walker, p. 26, printed 1803. 
 
 To the same eflFect is the following quotation from the Sta- 
 tistical Account of the Parish of Galashiels : 
 
 " Of those who purchase wool, and superintend the whole 
 *' process of making it into cloth, there are 13 masters who 
 " employ, at present, 50 journeymen and apprentices in assort- 
 " ing, scouring, and scribbling the wool, before it is given out to 
 " spin, and in scouring, milling, dyeing, cropping, pressing, and 
 ** finishing off the cloth. The unwearied attention which they 
 " bestow on all the various departments of their complicated 
 " employment, and the proficiency which they have attained, 
 *' have obtained for them, many years successively, almost all 
 " the premiums advertised by the trustees for cloth of 5s. 4s. 
 •' 3s. and 2s. value per yard. It is, however, on the whole, rec- 
 *' koned a disadvantage, that so many different objects must 
 ** occupy their attention. In England, there are wool-sorters 
 " who buy and prepare the wool for spinning ; spinsters who 
 " buy it, and sell the yarn to weavers, who again sell the webs 
 •' after they are wrought and scoured. In some places, they 
 ** are purchased by dyers, and after being milled and dyed, 
 ** are sold again to those whose province it is to fit and po- 
 •' lish them for the market. From the materials thus becom- 
 ** ing the actual property of those through whose hands they 
 " pass, in the different stages of the work, it may be pre-
 
 292 OF THE MEANS 
 
 " ployed in those manufactures in which 
 " labour is most subdivided, were original- 
 
 ^' sumed, that the several parts of it will be more expedi- 
 " tiously and better done, to insure its selling quickly and 
 ** to good advantage. As spinsters will learn to examine the 
 " wool, weavers the yarn, and dyers the web, before making 
 *< a purchase, all of them are thereby stimulated to take the 
 '♦ greater care, and to avoid all faults and blemishes, which 
 " would hurt the sale, or lessen the profits of their labour. 
 <* Besides, it seems probable, that the fewer employments any 
 •* man follows, the greater will be his proficiency in them. 
 *' They who constantly and exclusively are kept scribbling 
 *' wool, will make more, and to better purpose, than others 
 *' who are accustomed equally to perform every branch of 
 *' the manufacturing line. In like manner, the finest dye will 
 " always be given by him whose sole business it is to mix 
 *' and prepare the colours and fix them on the cloth ; and the 
 " smoothest polish will come from the hands which are only 
 *' put forth to the shears, the teazle, and the press. In opposi- 
 *' tion, hovi'ever, to this reasoning, specious and conclusive as 
 " it may appear, fe-ome intelligent manufacturers have pre- 
 *' ferred their own method of conducting the whole process 
 ** from first to last; asserting, that, from universal experience, 
 *' the yarns and webs which they purchase are greatly in- 
 ** ferior to those made under their own eye; and assigning as 
 '* the reason of this inferiority, that having the absolute di- 
 ** rection both of spinning and weaving, and a perfect know- 
 *' ledge of the respective abilities of such as they employ in 
 *' these departments, they must easily perceive, and can keep 
 *' out of their webs, all faulty yarn ; they must be acquainted 
 ** with all defects in weaving ; and if they are of a nature not 
 <* to be corrected or concealed by the subsequent operations 
 " which the cloth undergoes, they can make both spins tei-s
 
 OF AUGMENTING WEALTH, kc, 293 
 
 «^ ly the inventions of common workmen, 
 " who being each of them employed in 
 " some very simple operation, naturally 
 " turned their thoughts towards finding 
 " out easier and readier methods of per- 
 " forming it." * 
 
 The inaccuracy of the fact cannot escape 
 any one conversant with the history of 
 machinery ; but if it was true, it would un- 
 fortunately have, in some degree, the effect 
 of overturning the very opinion it is meant 
 to support ; as it would prove, that the di- 
 vision of labour had not the same happy ef- 
 fect in the improvement of machinery, that 
 it is said to have in the manufacture of 
 other things ; common workmen, or men 
 who execute a variety of other work, hav- 
 
 <' and weavers accountable for the several mistakes which 
 *' cannot thus be amended. And the excellence of all cloth 
 *^ depending, in a great measure, on the equality of the yarn, 
 " both as to fineness and twisting, they have the advantage 
 " of knowing and employing the hands which come nearest 
 *' to each other in these respects, and the weavers who excel 
 *' in working fine or coarse yarn " — Statistical Account, Yqh 
 II. p. 311. 
 
 ^ Wealth of Nations, Vol. I p. 12, 4to edition.
 
 294 OF THE MEANS 
 
 ing been more fortunate in inventing and 
 improving machines than machine-makers, 
 or men whose labour is solely confined to 
 that particular employment. 
 
 The truth is, the division of labour con- 
 tributes (as is well illustrated in the pas- 
 sage of Xenophon formerly referred to) * 
 much more to the nice execution of some 
 branches of refined manufacturing indus- 
 try, than, as is generally conceived, to any 
 branch of manufacturing industry being 
 executed with great increase of rapidity. 
 In this last respect, too, it may have some 
 influence, in consequence of its tendency 
 to improve the dexterity of the workmen ; 
 but this circumstance co-operates, in so 
 small a degree, with the power of perform- 
 ing labour by capital, in producing this ef- 
 fect, as nowise materially to invalidate the 
 general conclusion, — That it is to the cha- 
 racteristic faculty which man possesses, 
 from the earliest period of his existence, of 
 applying mechanical principles to the con- 
 
 * Seep. 277
 
 OF AUGMENTING WEALTH, &;C. 295 
 
 struction of tools and machines, calculated 
 to perform and supplant labour, and to his 
 powers of using capital for the same pur- 
 pose in all his commercial relations, as well 
 as in every transaction which requires the 
 exertion of labour, that he owes the ease and 
 woiiderftd rapidity with which labour is ex- 
 ecuted ; and, consequently, that extended 
 opulence which expands itself throughout 
 civilized society. 
 
 " It is evident, upon a moment's reflec- 
 " tion," (says an anonymous writer, who 
 seems to possess a thorough knowledge of 
 all our manufactures,) " that almost every 
 " convenience and external comfort we en- 
 " joy, depends upon the singular skill of 
 " man, in the invention and use of ma- 
 " chines. By this skill our fields are cul- 
 " tivated, our habitations are raised, our 
 «* garments are manufactured, our ships are 
 " built, and knowledge is acquired and dif- 
 " fused, in company with the general ad- 
 " vantages of commerce, from pole to pole. 
 " Read the history of mankind ; consider 
 "the gradual steps of civilization, from
 
 296 OF THE MEANS 
 
 " barbarism to refinement, and you will 
 " not fail to discover, that the progress of 
 " society, from its lowest and worst, to its 
 " highest and most perfect state, has been 
 " uniformly accompanied, and chiefly pro- 
 " moted, by the happy exertions of man, 
 " in the character of a mechanic or engi- 
 *^ neer. Let all machines be destroyed, 
 *^ and we are reduced in a moment to the 
 " condition of savages ; and in that state 
 " man may, indeed, exist a long time, 
 " without the aid of curious and complex 
 *^ machines ; though, without them, they 
 '^ can never rise above it." * 
 
 When Mr Hume, in the middle of last 
 century, supposed that the progress of hii- 
 man industry, in any country, was bound- 
 ed and confined by the check it must re- 
 ceive from the augmentation of wages, and 
 " that manufactures gradually shift their 
 ^' places, leaving those countries and pro- 
 " vinces which they have already enriched, 
 
 * Letters on the utility of employing Machines to shprtea 
 Labour, printed 1780.
 
 OF AUGMENTING WEALTH, &C. 297 
 
 " and flying to others, whither they are 
 " allured by the cheapness of provisions 
 " and labour, till they have enriched these 
 " also, and are again banished by the same 
 " causes ;" * he did not sufficiently attend 
 to the unlimited resources that are to be 
 found in the ingenuity of man in invent- 
 ing means of supplanting labour by capi- 
 tal ; for any possible augmentation of 
 wages that increased opulence can occasion, 
 is but a trifling drawback on the great ad- 
 vantages a country derives from the inge- 
 nuity of man in supplanting labour by 
 machinery, as well as from capital laid out 
 in roads, canals, bridges, inclosures, ship- 
 ping ; and employed in the conduct of 
 home and foreign trade, all of which is 
 alike engaged in supplanting the neces- 
 sity of paying the wages of labour, f 
 
 * Discourse on Money, p. 43. Edin. 1752. 
 
 f The evidence of Mr John Wdllin^ton, clothier of Stinch- 
 combe in Gloucestershire, strongly shows the important ef- 
 fects of machinery in checking the rise of price, that would 
 raturally take place, in consequence of the autimentation of 
 wages. He states, " That, during his experience, Spanish 
 " wool has risen 100 per cent,; he uses no English wools:
 
 298 OF fHE MEANS 
 
 The progress made of late years in Scot- 
 land, in the art of distilhng spirits, affords 
 a strong illustration and example of the 
 vast resources of human ingenuity in 
 abridging labour by mechanical contri- 
 vances. 
 
 In the year 1785, a proposal was made 
 to collect the duty on the manufacture of 
 spirits in Scotland, by way of licence, to 
 be paid annually' for every still, according 
 to its size, at a fixed rate per gallon, in lieu 
 of all other duties. 
 
 The London distillers, men the most ex- 
 perienced in their profession, who agreed to 
 the rate of the licence on the gallon, sup- 
 posed to be equivalent to the former du- 
 ties, declared themselves from experience 
 satisfied, that the time of working stills 
 
 " That the increase of wages has been 100 per cent, in the 
 *' cloth-working branch ; and that the increase in the price of 
 " cloth has been an advance of about 30 per cent. That the 
 ** use of machinery, principally, is the feason, in his opinion, 
 " that the prices of cloth have not increased in the sarre ratio 
 «* with the prices of labour, and of the raw material used in 
 " the manufacture.'' — ^ Report of the House of Commons 
 from the Committee on the Woollen Clothiers* Petition, 1783, 
 p. 9.
 
 OF AUGMENTING WEALTH, &C. 2P9 
 
 with benefit was limited to an extent per- 
 fectly well known, and that whoever ex- 
 ceeded these limits, would infallibly lose, 
 upon his materials and the quality of the 
 goods, what he gained in point of time ; 
 and, in conformity to their opinion, the 
 duty was, in the year 1786, settled, upon 
 the supposition that stills could be dis- 
 charged about seven times in a week. 
 
 Two years after this, in a memorial pre^ 
 sented to the Lords Commissioners of the 
 Treasury, the same men alleged, that the 
 Scotch distillers had, by the ingenuity of 
 their contrivances, found means to dis- 
 charge their stills upwards of forty times a 
 week ; and we since know, from a report 
 made to the Lords Commissioners of the 
 Treasury, in the year 1799, that a forty- 
 three gallon still was brought to such a de- 
 gree of perfection, as to be discharged at 
 the rate of once in two minutes and three 
 quarters, which is almost twenty-two times 
 in an hour. * It appears also from this re- 
 
 * " In a letter which I received a few days ago from Mr
 
 300 OF THE MEANS 
 
 port, that the operation of distillation was 
 capable of being performed in a still shorter 
 time, and that the quality of the spirit was 
 nowise injured by the rapidity of the ope- 
 ration. * 
 
 Yet, in the conduct of this extraordinary 
 improvement in the manufacture of spirits, 
 there was no aid derived from the division 
 of labour, nor could it once be thought of 
 as a possible resource. 
 
 Illustrations to the same effect might be 
 brought from the wonderful improvements 
 made of late years in bleaching, dyeing, 
 spinning, weaving, as well as in the manu- 
 
 " Millar, he informs me, tbat he has made a new still of the 
 " same kind, that contains only forty gallons in the body, and 
 *' three in the head, forty-three gallons in all : and that the 
 *' state of working-with this still is as tollows : — From the com- 
 *' mencement of the charge till the word is given to letofiF, two 
 *' one-fourth minutes ; time of discharging half a minute - 
 *' making the time of charging, running, and discharging, two 
 *' three-fourth minutes only, which is almost twenty-two times 
 <' in an hour.'' — Memorial of Dr Jeffray respecting the Distil- 
 lation of Spirits ; printed in the Appendix to the Report on 
 the Distilleries of Scotland, 1799, P- 392. 
 
 * *' Believing then, as I do, that the quality of the spirits is 
 <* not necessarily affected by the rapidity of the distillation,"- 
 &c. Ibid. p. 401. 
 
 11
 
 OF AUGMENTING WEALTH, &C. 301 
 
 facture of iron and copper, none of which 
 derive, in their details, the smallest benefit 
 from the division of labour. 
 
 The annals of the art of weaving, from 
 the earliest period, afford no record of any 
 benefit that can be pretended to be derived 
 from the division of labour. In the pre- 
 sent improved state of this most important 
 branch of our manufactures, the whole la- 
 bour of forming the web, after the arrange- 
 ment of the work, is, as it was in the rudest 
 state of the art, the task of one man. Yet, 
 when we compare the ease and expedition 
 with which the weaver now executes his 
 web in a loom, moved by water or by 
 steam, with the process of taking up thread 
 after thread, and counting and sorting them 
 each time the woof is passed between 
 them, there is no manufacture in which 
 our progress towards wealth is more con- 
 spicuous. The rapidity with which webs of 
 the finest texture are now executed by the 
 aid of machinery is generally known ; and 
 Dr Robertson, on the authority of Ulloa, af- 
 ter describing the native American as pur-
 
 302 OF THE MEAhfS 
 
 suing the tedious method of weaving we 
 have contrasted with the modern practice, 
 states, that upwards of two j'ears was fre- 
 quently spent in finishing a small piece of 
 the coarsest cloth. * 
 
 Though the division of labour, therefore, 
 may tend to produce superior execution in 
 some refined arts, it is with confidence we 
 again repeat, that the universal opulence 
 which extends itself over civilized society^ 
 conferring " on the frugal European pea- 
 " sant comforts and accommodations ex- 
 " ceeding those of many an African king, 
 " the absolute master of the lives and liber- 
 " ties of thousands of naked savages," f is 
 to be attributed to two circumstances, both 
 peculiar to^ and char act eristic of, the human 
 species ; — to the power man possesses of di- 
 recting his labour to the objects of increasing 
 the quantity, and meliorating the quality, of 
 the productions of nature ; — and to the 
 power of supplanting and performing labour 
 by capital, 
 
 * Robertson's History of America, Vol. I. Note 83. ' 
 t Wealth of Nations, Vol. I. p. 15. 4te edit, 
 
 7
 
 OF AUGMENTING WEALTH, &e. SOS 
 
 As these great sources of human im- 
 provement are common to all mankind, it 
 becomes an interesting object of inquiry, — 
 why all civilized societies have not deriv- 
 ed equal benefit from them ? — and what 
 are the circumstances that retard the pro- 
 gress of industry in some countries, and 
 that £cui(le its direction in all ? 
 
 The effect of demand in regulating the 
 quantity, the nature, and the quality, of 
 those things which are produced by the la- 
 bour of man, has been already pointed out 
 and displayed. If the world had only one 
 inhabitant, and if we could suppose that 
 the time of this solitary individual was ful- 
 ly occupied in procuring and forming for 
 himself the various objects of desire he 
 wished to enjoy ; it is evident, that a sud- 
 den fancy to enjoy more of any one parti- 
 cular article than the portion of labour he 
 employed in obtaining it was capable of 
 furnishing, would create a necessity of his 
 allotting, for this purpose^ a farther portion 
 of the time which he spent in procuring 
 some less pressing object of his desire, in
 
 304f OF THE MEANS 
 
 order that he might acquire an additional 
 quantity of the commodity of which he de- 
 signed to increase his consumption. 
 
 Now, an increased demand has a direct 
 tendency to produce the same effect in thti 
 arrangement of the labour of a society, that 
 such a wish would produce in regulating 
 the conduct of an individual. 
 
 The advanced price, in consequence of 
 an extension of demand, operates not alone 
 as an encouragement to exertion in those 
 who manufacture the commodity, for it 
 creates a necessity of abridging the con- 
 sumption of some less pressing object of 
 desire, in order that the goods which were 
 appropriated to acquire it, may be applied 
 to pay the advanced price of the commo- 
 dity for which there exists an increased de- 
 mand ; and thus a quantity of labour is let 
 loose from the manufacture of those things 
 for which the demand is abridged, at the 
 very time that its application is directed to, 
 and encouraged in, the formation of that 
 for which the demand is increased. By this 
 means, an alteration is produced in the ar-
 
 OF AUGMENTING WEALTH, &C. 305 
 
 tangement of the labour of a society, pre- 
 cisely similar to that which would be pro- 
 duced in the conduct of an individual, 
 (whose time was fully occupied in procur- 
 ing for himself the objects of his desire,) 
 by a wish to increase his consumption of 
 any one article. 
 
 It is thus, (as has been already explain- 
 ed,) * that demand as effectually regulates 
 the distribution of industry in every socie- 
 ty, as the wishes and inclination of an in- 
 dividual decides his conduct, and directs 
 his efforts. Whatever, therefore, fixes or 
 determines the proportion of demand that 
 exists for different articles of wealth in any 
 society, must regulate the distribution of 
 its industry. 
 
 Neither the private interests or prejudi- 
 ces of particular orders of men, nor the po- 
 licy of different governments, can succeed 
 in directing the industry of a country into 
 any particular channel, but through the 
 medium of augmenting the demand for the 
 
 * See page 105. 
 U
 
 306 OF THE MEANS 
 
 commodities which that species of indus^ 
 try produces. The despotic orders of a 
 government, dictated by the vain specula- 
 tions of its rulers, if not calculated to make 
 an alteration in demand, can produce no 
 permanent eifect on the , direction of hu- 
 man industry. Pecuniary aid and assist- 
 ance given to the manufacturer, may cre- 
 ate, and even sustain, a losing trade ; but 
 demand alone can create a flourishing trade, 
 or direct the permanent application of the 
 industry of a country into any particular 
 channel. 
 
 The great and important step, therefore, 
 towards ascertaining the causes of the di- 
 rection which industry takes in nations 
 which are, to a certain degree, advanced 
 in skill, dexterity, and judgment, in the 
 means of executing labour, seems to be the 
 discovery of what dictates the proportion 
 of demand for the various articles which 
 are produced ; and though this may not 
 be at first sight apparent, yet a little at- 
 tention to the arrangements and conduct 
 of men in civilized society will, perhaps,
 
 OF AUGMENTING WEALTH, &C. 307 
 
 authorize the opinion, that it is not totally 
 impossible to discover what it is that causes 
 that variety of demand for different arti- 
 cles, which is observable not only in differ- 
 ent countries, but even in different places 
 in the same country. 
 
 The first, the universal, and the most ar- 
 dent desire of man, is to procure what 
 merely constitutes food ; the next is most 
 undoubtedly to guard himself from the 
 inclemency of the season. These desires 
 he seems to possess in common with all 
 other animals ; and they are perhaps the 
 only feelings, in relation to wealth, that na- 
 ture directly implants ; for, on examina- 
 tion, we shall see reason to think all farther 
 desires, with regard to wealth, (which are 
 peculiar to the human species,) arise from 
 the circumstance of the possession of wealth, 
 which man alone, of all animals, seems to 
 have the faculty of increasing by his own 
 exertions. 
 
 We often see the poor man living on 
 coarse bread, made of inferior grain, satis- 
 fying his thirst with water, covering him-
 
 308 OF THE MEANS 
 
 self with tattered garments, lying on straw, 
 and enjoying, even in that state, content- 
 ment and felicity. Increase his wealth, his 
 desires extend themselves, and though, per- 
 haps, it does not add materially to his hap- 
 piness, he eats bread made of better grain, 
 drmks some sort of liquor prepared by art, 
 covers himself with better clothing, pro- 
 cures a comfortable habitation, and, in pro- 
 portion as he extends his wealth, he natu- 
 rally enlarges his desires to views of com- 
 fort in his clothing, as well as in other ar- 
 ticles. 
 
 But a demand for what constitutes the 
 luxuries of life, can only exist on the part 
 of those who possess wealth beyond what 
 enables them to acquire the things which 
 the habits of mankind induce them to re- 
 gard as necessaries. For demand, in the 
 mercantile sense of the word, is not to be 
 considered as a mere wish or desire, but as 
 a desire attended with the means of satisfy- 
 ing the object of it ; it is the possession of 
 these conjoined that constitutes what the 
 author of the Wealth of Nations has called
 
 OF AUGMENTING WEALTH, &C. 309 
 
 the Effectual Demander ; * that is, the per- 
 son with a view to whom the commodity 
 can, in speculation alone, be manufactured 
 or brought into the market. 
 
 Goods, indeed, may appear for once in a 
 market where there is no effectual demand- 
 er ; though that is not very probable, as 
 the foresight of mankind generally ope- 
 rates as a preventive check ; and by this 
 means it happens, that, without even an 
 experiment, the extent and gradations of 
 fortune seem universally to influence the 
 quantity and quality of what is offered for 
 sale. 
 
 Thus, if the whole island of Great Bri- 
 tain was suddenly divided into small pro- 
 perties of one hundred pounds a-year each, 
 no parliamentary regulations or encourage- 
 ment could possibly prevent the extinction 
 of the manufacture of those costly car- 
 riages, the purchase of which might ex- 
 haust upwards of four years revenue of one 
 of those limited fortunes. It is, on the 
 
 * Wealth of Nations, Vol. I. p. ^8, 4to edition.
 
 310 OF THE MEANS 
 
 other hand, obvious, that any regulation 
 which could at once unite the property 
 thus divided into fortunes of ten thousand 
 a-year each, must, independent of all en- 
 couragement, and in defiance of even very 
 heavy taxation, instantly restore the demand 
 for, and of course the manufacture of, those 
 vehicles. 
 
 The distribution of property could not, 
 however, be changed from fortunes of one 
 hundred to fortunes of ten thousand a- 
 year, without, in every instance reducing 
 ninety-nine families, antecedently possessed 
 of one hundred a-year each, into a state of 
 dependence for sustenance and employ- 
 ment upon each of those men, amongst 
 whom the property of the country by this 
 hypothesis would be divided. The goods 
 which the man of ten thousand a-year would 
 immediately apply to the acquisition of 
 carriages and other luxuries, must of course 
 be withdrawn from expenditure in those 
 things in the acquisition of which they were 
 employed, when fortunes were divided in- 
 to one hundred pounds per annurth
 
 OF AUGMENTING WEALTH, &C. 311 
 
 Each of the individuals who, antecedent 
 to tlie supposed change in the arrangement 
 of property, possessed a hundred pounds a- 
 year, might naturally wish and desire to 
 obtain the things to which he was habituat- 
 ed ; but as this wish could no longer be 
 accompanied with the means of obtaining 
 the object, it could no longer give rise to a 
 demand. Of course, the demand for that 
 class of commodities must be diminished ; 
 and the reduction of their value, created 
 by this diminution of demand, must dis- 
 courage that direction of industry, at a time 
 when, in consequence of the supposed new 
 arrangement of property, the demand for 
 articles of luxury would raise the value of 
 labour employed in the formation of them ; 
 and thus effectually direct the labour of 
 those who were thrown out of employ- 
 ment, to that cliannel in which, by the 
 nev/ arrangement of property, it was sure 
 of being cherished by a constant demand. 
 
 On the other hand, if the property had 
 remained divided into small fortunes of 
 one hundred a-year each, what would have
 
 312 OF THE MEANS 
 
 been the consequence? — Experience shows 
 us, that proprietors of this class live, in 
 general, on their estates ; indeed, want of 
 means to deiiay the necessary expences of 
 travelling confines them at home ; and as 
 there is nothing so salutary for the improve- 
 ment of a country as the eye of a proprie- 
 tor, confined to a space of territory which 
 he can himself manage ; so likewise, the 
 expenditure arising from the residence of 
 the proprietors must naturally encourage 
 the industry of the country, and of course 
 discourage those refined manufactures, the 
 result of the accumulation of labour on raw 
 materials, which distinguish the industry of 
 towns. 
 
 This view of the subject inevitably leads 
 to the suspicion, that it is the distribution 
 of wealth which regulates the portion of 
 demand for different descriptions of commo- 
 dities, in as cogent a manner as demand re- 
 gulates the direction of the industry of a so- 
 ciety, and of course the formation of wealth. 
 Demand, as has been remarked, arises 
 
 not only from having a wish or desire to 
 
 1
 
 OF AUGMENTING WEALTH, &C. 313 
 
 possess k particular object, but from the de- 
 sire of possessing being combined with the 
 means of acquiring ; and it is here most 
 important to remark, that though the mere 
 wish or desire of possessing can never fur- 
 nish the means of acquiring, yet a little ob- 
 servation on the conduct of men shows us, 
 that the means of acquiring very certain- 
 ly and very rapidly instil the desire of 
 possessing. It seems, therefore, an undeni- 
 able inference, (if demand proceeds from 
 the desire of possessing, combined with the 
 means of acquiring,) that the distribution 
 of wealth, which at once furnishes the 
 means of acquiring, and regulates the desire 
 of possessing, must imperiously determine 
 the nature and extent of demand. * 
 
 But it is not general reasoning alone 
 which produces a conviction, that the dis- 
 
 * The general feeling of mankind, of the incompetency 
 of a mere wish or desire to constitute a demand, is forcibly 
 expressed in the common and well-known proverb, Iftvishes 
 ivere horses, beggars would ride; and the rapidity with which, 
 the means of possessing communicates the desire of enjoyment, 
 is expressed with equal cneroy in another proverb, Pui a beg' 
 gar on horsebacle, he'll ride to the devil.
 
 314 OF THE MEANS 
 
 tribution of wealth, in all societies, must 
 ultimately reo;ulate the formation of wealth. 
 The same conclusion may be deduced, by a 
 still plainer and more familiar process, 
 from an examination of the situation, the 
 habits, and the distribution of the property 
 of mankind ; — a view of the subject which 
 may be illustrated by examples innume- 
 rable, uniformly eyincing, that, in every 
 society, it is the wealth of the consumers 
 who resort to the market, and the manner 
 in which it is distributed amongst them, 
 that uniyersally decide both the quantity 
 and quality of the goods that are exposed 
 to sale. 
 
 We have often occasion to remark, in 
 many of the small fishing-towns of Eng- 
 land, where the goods generally exposed in 
 the shops are of a nature adapted to the de- 
 mand dictated by the property of tlie in- 
 habitants, that the summer season no soon- 
 er invites to the coast a number of opulent 
 families, for the purpose of bathing, than 
 there is transferred thither a quantity of 
 goods suited to the demand which the for- 
 
 "^ 10
 
 OF AUGMENTING WEALTH, &C. 315 
 
 tunes of those who for a time visit the place 
 create ; and the residue of these goods is 
 at the end of the season constantly remov- 
 ed, because the fortunes of the natives are 
 not such as to create a demand for com- 
 modities of that nature. 
 
 It is to be observed too, that for the good 
 of the place, as well as of those new shop- 
 keepers who resort to it, it is necessary that 
 those who thus for a time reside in it should 
 not be too affluent ; for the tastes and habits 
 which extreme affluence generates, natural- 
 ly induce those who possess it to bring from 
 a distance their wines, and many other arti- 
 cles of their consumption, as well as to send 
 to the capital for any new ornaments, or 
 additional articles of clothing, which the 
 fancy of the day may suggest as desirable ; 
 so that not only the affluence of those who 
 resort to the market, but even the degree 
 of affluence, seems to decide on the nature 
 and extent of the demand, which may be 
 diminished as much by the extreme riches 
 of the temporary visitants as by their po- 
 verty.
 
 SIC) OF THE MEANS 
 
 It was the luxurious habits of the French 
 Court, generated by extreme affluence, that, 
 with justice, gave rise to the complaint 
 uniformly made by the inhabitants in and 
 around Fountainbleau, that the short resi- 
 dence of the Sovereign, in summer, created 
 an additional demand for nothing but eggs, 
 milk, and butter, as the courtiers brought 
 almost every other article of consumption 
 along with them ; and it is not improbable 
 that shopkeepers and traders in and around 
 that town, are at present deriving more be- 
 nefit from its being converted into an Eng- 
 lish prison, than they did from its being 
 resorted to by the Court of France. 
 
 The curing of fish is a means of increas- 
 ing food, and of course wealth, which has 
 occupied the attention of many of the ma- 
 ritime powers of Europe. The legislature 
 of this country has, in particular, made re- 
 peated inquiries, enacted various regula- 
 tions, and given, at different periods, very 
 considerable bounties for improving and 
 encouraging the curing of herring. 
 
 The great object has been to imitate,
 
 OF AUGMENTING WEALTH, &€. 317 
 
 and, if possible, to rival, the Dutch in this 
 undertaking ; but the inquiries of commit- 
 tees, the regulations in consequence of their 
 reports, the bounties and encouragements 
 granted hy law, the instructions given by 
 Dutchmen dispersed throughout our fish- 
 ing towns, to teach the process which has 
 succeeded in Holland, have all proved inef- 
 fectual. The herrings produced are as in- 
 ferior in quality as ever to those cured in 
 that country, and must remain so, if there 
 was even much greater encouragement gi- 
 ven ; for the consumers of the greatest part 
 of the herrings cured in this country are the 
 poorest of all men, — men absolutely depriv- 
 ed of the power of possessing property, the 
 slaves in our West India colonies ; whilst 
 the consumers of the herrings cured in 
 Holland are men of property and affluence 
 in Germany and other parts of Europe, at 
 whose tables that fish is introduced as an 
 article of luxury. Till, therefore, the 
 West India proprietor becomes as nice 
 about the victuals of his slaves, as a German 
 Prince is about the luxuries produced at
 
 51 S OF THE MEANS 
 
 his table, this country can never expect to 
 see the curing of herring brought to an 
 equal state of perfection as in Holland ; for 
 the fortunes of the consumers in Germany 
 make the excellence of the commodity 
 the sole recommendation in that market ; 
 whilst the situation of the slaves makes the 
 cheapness the only recommendation in the 
 West India market. 
 
 Let any man examine the wretched 
 clothing sent from this country to cover 
 those who are employed in the cultiva- 
 tion of the sugar-cane ; and then let him 
 reflect, whether, if this was the chief source 
 of demand for our linen and cloth, any 
 possible bounty could induce our manufac- 
 turers to produce lawn, cambric, or fine 
 broad-cloth. 
 
 This nation is at present the greatest 
 commercial country in the world. There is 
 hardly any people, in any climate, with 
 whom our merchants have not dealings ; 
 and if we examine the cargoes that are 
 made up to suit the demands of different 
 nations, we shall uniformly observe, that it
 
 OF AUGMENTING WEALTH, &C. 319 
 
 is the distribution of property, in each 
 country, that dictates the nature and qua- 
 lity of the goods that are sent to it. 
 
 In India, property is most unequally di- 
 vided. The poor man possesses the necessa- 
 ries, but has not wealth sufficient to suggest 
 a desire even for the comforts of life. The 
 rich possess not only wherewithal to pam- 
 per their appetites, but sufficient to satisfy 
 their most refined desires. Accordingly, 
 the cargoes which our India captains car- 
 ry out, if meant for sale in the country 
 and not for the supply of the Company's 
 servants, uniformly consist of the most ex- 
 pensive clock-work, of mirrors of the great- 
 est size, of fire-arms of the most distin- 
 guished workmanship, of lustres, and other 
 ornamental articles, of a value even beyond 
 what any European market requires. 
 
 In the United States of America, on the 
 other hand, property is more equally divid- 
 ed than perhaps in any other country. Al- 
 most every man possesses not only the 
 means of procuring the mere necessaries of 
 life, but his wealth is such as to extend his
 
 30,0 OF THE MEANS 
 
 demands to some articles of comfort in 
 clothing, furniture, and habitation ; and 
 there is hardly such a thing as a princely 
 or overgrown fortune. ^ Accordingly, the 
 goods sent to the American market are all 
 comparatively low-priced, things calculated 
 to secure comfort, not to attract admira- 
 tion. 
 
 Send to India a cargo of goods assorted 
 for this market ; they will find no sale. 
 The poorer orders might, indeed, have a 
 wish for articles of this sort ; but in a coun- 
 try where three half crowns per month is 
 the usual allowance for wages, food, and 
 clothing, they cannot have the means of 
 procuring them ; and a wish, unaccom- 
 
 • " The truth is, that, though there are in America few 
 people so miserable as the poor of Europe, there are also 
 very few that in Europe would be called rich ; it is rather a 
 general happy mediocrity that prevails. There are few great 
 proprietors of the soil, and few tenants ; most people culti- 
 vate their own lands, or follow some handicraft or merchan- 
 dise ; very few rich enough to live idly upon their rents or 
 incomes, or to pay the high prices given in Europe for paint- 
 ings, statues, architecture, and the other works of art, that 
 are more curious than useful." — Information to those who 
 would remove to America, by Dr Franklin, printed 1784» 
 p. 5.
 
 OP AUGMENTING WEALTH, &C. S2l 
 
 paiiied with the means of obtaining a com- 
 modity, never can constitute a demand. 
 Neither could there exist, on the part of 
 the native princes, any demand for such 
 articles. They, itideed, have amply the 
 means of obtaining them ; but this, with- 
 out the wish or desire to possess them, 
 cannot constitute a demand ; and these 
 are not the commodities for which opu*. 
 lence creates a desire. The things for 
 which riches dictate a demand are articles 
 scarce and rare, calculated to display splen- 
 dour, and excite admiration, — 
 
 " Non usu plebeio trita voluptus."* 
 
 But the effect of the distribution of pro- 
 perty is not alone to be traced out by con- 
 templating its influence in determining the 
 direction of manufacturing industry : it 
 even goes so far as to regulate and decide 
 the nature and condition of the animals 
 reared and brought to the market for the 
 food of man. 
 
 England is the only country in Europe 
 
 * Petron. Arbiter, Sat. cap, c^ix. 8. 
 X
 
 0j8^ OF THE MEANS 
 
 where wealth is so diffused, that the great 
 body of the manufacturers, that is, a great 
 proportion of the people, can afford to en- 
 joy a mixture of animal with vegetable food 
 for their nourishment. * 
 
 Where the wealth of man admits of his 
 using a portion, but not of his enjoying a 
 superabundance of animal food, it becomes 
 desirable that it should be as fat as pos- 
 sible ; as meat in this state goes furthest to 
 season, relish, or kitchen, as it is vulgarly 
 called a quantity of potatoes, pulse, or other 
 vegetables. It is from this circumstance, 
 that we find in England the fattest and 
 the greatest quantity of fat meat in the 
 world ; for no one who will read the nu- 
 merous publications that have of late years 
 appeared on agricultural subjects, can en- 
 tertain a doubt, that it is the ease and afflu- 
 
 * That man can be nourished at a much cheaper rate on 
 vegetable than on animal food, is apparent, from the circum- 
 stance of the lar^e quantity ol land requisite to raise enough 
 of animal food for his sustenance, compared with the small 
 quantity ot land that will priiduce a sufficiency to maintain 
 him «)i> .1 vegetable diet. On this subject, see Appendix, 
 No. XUL 
 
 7
 
 OF AUGMENTING WEALTH, &C. 3Q3 
 
 ence of the lower orders of the people, en- 
 abling them in part to subsist on animal 
 food, and the circumstance that fat meat 
 goes furthest in mixing with vegetables, 
 from whence the demand for meat in this 
 state arises. 
 
 Of the new Leicester breed of sheep, now 
 so much run upon, and so famed, for what, 
 in the language of the grazier, is called their 
 fatting quality^ proportionally speaking, 
 none go to the London market ; that is, 
 arrive at the table of the luxurious. Leeds, 
 Manchester, Birmingham, Wakefield^ New- 
 castle, the seats of our manufactories, are 
 the markets in which they are eagerly 
 sought after, and the places where they are 
 in general consumed. And if the wealth 
 of the country was not so distributed as to 
 put it in the power of this class of men to 
 enjoy animal food, there would be no de- 
 mand for meat fed to this extent ; because 
 that extreme degree of fat is a quality, 
 which, far from recommending it to, would 
 banish it from, the tables of those whose
 
 324 OF THE MEANS 
 
 opulence has trained them on to dehcacy 
 and refinement of taste. 
 
 " On going to market one day, to sell 
 «* our fat cattle," (says a respectable and very 
 intelligent farmer,) " I was overtaken by 
 " a gentleman from Scotland. Farmer, 
 " said the gentleman, You make your sheep 
 '« so fat, that I could not eat the mutton. 
 " It matters not, Sir, replied I, because we 
 " have plenty of customers for this kind 
 " of mutton ; and allow me to say, it is 
 " very happy that the great consumption 
 " does not depend upon such as you. 
 
 " Ask the pitman, the keelman, the 
 " wool-comber, tlie weaver, the fabrica- 
 " tors of metals, and all those various but 
 " valuable class of manufacturers which 
 «' abound in different parts of this island, 
 " which of the two kinds of mutton they 
 <• prefer ? would they not readily answer, 
 " Take you the lean meat, large-boned, 
 " and black gravy, but give us the small- 
 " boned fat meat, with oil swimming in 
 « the dish. And are not these the men
 
 OF AUGMENTING WEALTH, &C. 3Q5 
 
 « that make the greatest consumption in 
 « fat mutton, beef?" * &c. 
 
 In some parts of the south of Scotland, 
 the desire of imitating the improvements 
 of their neighbours in England, has intro- 
 duced the new breed of sheep, whose pro- 
 pensity to fatten has made them so much 
 sought after. On the banks of the Tweed, 
 in particular, such flocks are to be found. 
 But there are few parts of that country 
 where the lower orders habitually live on 
 animal food. Morpeth, from its vicinity, is 
 the market to which they are generally 
 sent ; because, says the intelligent author 
 already quoted, " the natives of Scotland 
 " have not as yet learned to eat fat mutton, 
 " like the pitmen and keelmen about New- 
 " castle." The truth is, the common peo- 
 ple of that country do not possess wealth 
 sufficient to enable them to consume ani- 
 mal food, otherwise it would not require 
 much learning to give them a taste for fat 
 
 * Observations on Live Stock, by George CuUcy, pp. 1'35, 
 126.
 
 326 OP THE MEANS 
 
 meat ; for whenever they do acquire the 
 means of consuming a mixture of animal 
 with vegetable food, the taste for meat in 
 that state at once displays itself The 
 proof of this is, that Glasgow and Paisley, 
 the only places in Scotland where the body 
 of the people possess that degree of opu- 
 lence, are known to be the only markets 
 for very fat meat ; that is, the markets 
 where the demand for meat in that state 
 ensures a superiority of price. 
 
 Innumerable illustrations might be 
 brought, uniformly tending to show, that 
 the distribution of property determining 
 the nature of demand, alone regulates and 
 decides the channels in which the industry 
 of every society exerts itself Perhaps, 
 however, there is not a more powerful me- 
 thod of bringing home this great and lead- 
 ing truth to the conception of every man, 
 than by taking a general view of the state 
 in which property has existed in France 
 and Great Britain, the two countries in 
 Europe most distinguished for opulence 
 and refinement ; and then contemplating
 
 OP AUGMENTING WEALTH, &C. 3^7 
 
 the method in which the distribution of 
 their respective wealth has marked, dis- 
 tinguished, and characterized, the industry 
 of both these countries. 
 
 In Great Britain, as we have already ob- 
 served, wealth is more generally diffused 
 than in any other country. Though 
 there exist some great and overgrown for- 
 tunes, they do not appear to have been 
 formed at the expence of entailing general 
 poverty on the community. The yeomen 
 in some parts of the country, the farmers 
 and manufacturers in all, when compar- 
 ed with those of any European nation, 
 have always been distinguished for the 
 ease and even the opulence which J-hey 
 enjoy. * 
 
 In France, on the other hand, the wealth 
 of the country for centuries was shared out 
 and confined amongst the Nobility. They 
 too had universally the habits of sacrificing 
 the interests of their daughters and young- 
 et sons to increase the wealth, and perpe- 
 
 * Lord Bacon's History of Henry VH,
 
 328 OF THE MEANS 
 
 tuate the power of their representatives :— 
 for the victims of the female sex, Convents 
 furnished an asylum and retreat ; whilst 
 Monasteries, Church-benefices, and the 
 Army, were uniformly resorted to as 
 means of providing for the younger sons. 
 
 '* France" (says a well informed author, 
 who wrote in the middle of the last cen- 
 tury) " concentres in Versailles and Paris, 
 " as in a single point, all the powers which 
 " can attract mankind, — to Court, on ac- 
 *' count of the greatness and honours, which 
 " can be attained nowhere else, and which 
 *' are for none but those who live at it ; — 
 ^' to Paris, in which are not only all the 
 " treasures of the state, but where all those 
 " sulbjects of the state reside who are rich, 
 ** either through the public or their own 
 '^ private revenue ; so that all the wealthy 
 " have fixed their habitation in this town, 
 " from a preference owing to the neigh- 
 *« bourhood of the Court." * It is to be 
 
 * Remarks on the Advantages and Disadvantages of 
 France and (Jreat Britain with respect to Commerce, 1754, 
 p. 42.
 
 OF AUGMENTING WEALTH, &C. 329 
 
 observed, too, that the privileges and ex- 
 emptions from taxation enjoyed by the 
 Nobility, greatly added to the effects of 
 the unequal division of property ; for by 
 this means, in proportion as the public 
 debt and the expences of the Court increas- 
 ed, the unequal distribution of riches be- 
 came more marked and perceptible ; whilst 
 the effects of this inequality appeared more 
 forcibly from the extravagance of that No- 
 bility in whose hands the wealth of the 
 country was concentrated : *• That class, 
 " who, in the service of the nation, have 
 " always spent the capital of their for- 
 " tunes, and who, when they are ruined, 
 " give way to another set of the same 
 " class, who in like manner spend their 
 " capital." * 
 
 Indeed, in no country was there to be 
 found a portion so considerable of its riches 
 
 * " Cette parlie de la nation qui sort toiijours avcc le capi- 
 " tal de son Men, qui quand elle est ruinee donne sa place u 
 " une aulre qui servira avec son capital encore," — Esprit de 
 J.oiXf Liv. XX. Chap. xx.
 
 350 OF THE MEANS 
 
 shared out in large fortunes amongst so 
 small a number, the expenditure of which 
 uniformly and constantly took place on the 
 same spot. 
 
 " The opulent man, who lives on his 
 " fortune, without any employment, con- 
 " sumes by himself, by his menial servants, 
 " by his parasites, the national productions 
 " of the first necessity. So far agriculture 
 " profits by his expenditure : but his pride 
 " and effeminacy employ, to provide him 
 " with lodging, with furniture, with cloth- 
 " ing and equipage, the assistance of all the 
 " arts that are naturalized in France ; it is, 
 " then, the men of large fortune who fur- 
 " nish the natural aliment of French in- 
 *' dustry," * 
 
 In Paris, (as, under such circumstances, our 
 theory would lead us to expect,) those who 
 
 * " Lp riche oisif consume par lui-meme, par ses valets, par 
 " ses parasites, les denrees nationales de premiere necessite. 
 *' L'aizricullure {trofite evid('mment de ces uepenses ; le faste 
 " et la mollesse, empruntent pour le loj^er, le meubler, le vetir, 
 '• le voiiurtT, le secours de tous les arts naturalises en Fiance j 
 *' il est done l*alimcnt propve de I'liidustrie Frangoise.'*— 
 Ephemerides du Citoyerif Ibm, II, 1766, p. 133.
 
 OF AUGMENTING WEALTH, &C. S31 
 
 excelled as hair-dressers, as tailors, as mil- 
 liners, the most expert hands employed in 
 painting china or carriages, and in cutting 
 or setting diamonds, embroiderers of clothes 
 and furniture, &c. received encouragement 
 certainly equal, if not superior, to those em- 
 ployed in the same line in London ; whilst 
 we are told by Mr Arthur Young, that, 
 from the information he could collect dur- 
 ing his residence in different parts of 
 France, country labour was 76 per cent, 
 cheaper there than in England. 
 
 This sufficiently shows, that the demand 
 for country labour, in proportion to the 
 number of labourers of this description, 
 was much inferior to what it is in this 
 country ; and that the proportion betwixt 
 the demand for, and the number of, those 
 
 * Country labour being 76 per cent, cheaper in France 
 than in England, it may be inferred, that all those classes that 
 depend on labour, and are the most numerous in society, are 
 76 per cent, less at their ease, (if I may use the expression,) 
 worse fed, worse clothed, and worse supported, both in sick- 
 ness and in health, than the same classes in England, notwith- 
 standing the immense quantity of precious metals, and the im- 
 posing appearance of wealth in France.
 
 »3o% OF THE MEANS 
 
 whose professions are calculated to admi- 
 nister to the desires of the affluent, even 
 though their number was much greater, 
 must have been equal, nay, superior, to 
 what it is in England. 
 
 But we know, that when the interest of 
 men engages their attention to the forma- 
 tion or manufacture of any class of com- 
 modities, the alertness and dexterity in sup- 
 planting labour by capital, which practice 
 generates in any particular branch of manu- 
 i'acture, uniformly lowers the price, at the 
 same time that it improves the quality, of 
 the articles produced. — '^ For it is so plain, 
 *' that every man profiteth in that he most 
 " intendeth, that it needeth not to be stood 
 " upon. It is enough to point at it." * 
 
 Accordingly, to establish the compara- 
 tive superiority, excellence, and cheapness, 
 of all articles in France which contribute 
 to the splendid decoration either of the 
 persons, the tables, or the apartments of 
 men of fortune, we need only appeal to 
 
 * Bacon's Essays, p. 83.
 
 OF AUGMENTING WEALTH, &C. 353 
 
 those who have resided there, and who have 
 enjoyed the society of the people of that 
 country. 
 
 Even in England, no one can go into the 
 drawing-rooms of the affluent, or attend 
 St James's on a birth-day, without seeing 
 this superiority sufficiently displayed, by 
 the quantity of French manufactures exhi- 
 bited, notwithstanding the severest legal 
 prohibitions, and those, too, enforced by 
 the example of the Sovereign. 
 
 On the other hand, to prove the superi- 
 ority which England displays in the neat- 
 ness and cheapness of all those articles 
 which administer to the comforts of life, 
 and which are within the reach of those 
 who possess merely a competency j it is on- 
 ly necessary to call for the testimony of any 
 man who has even passed through the two 
 countries. The neatness of the houses in 
 and around London, and the splendour of 
 the hotels in Paris, have constantly formed 
 themes of remark to all travellers. 
 
 What is universally matter even of loose 
 observation among mankind, where interest
 
 334 OF THE MEANS 
 
 does not dictate the sentiment, is generally 
 true, and may almost always with certainty 
 be relied upon. Here, however, it is unne- 
 cessary to trust merely to such a source of 
 information. For the effects of the distri- 
 bution of wealth on the respective industry 
 of the two countries, is no where more 
 strongly displayed than in the documents 
 and memorials which the negotiation for a 
 commercial treaty called forth ; and as this 
 was evidently an occurrence calculated to 
 interest the Government of both countries, 
 in acquiring the most accurate knowledge 
 of the subject, they seem to furnish a 
 source of information which may with con- 
 fidence be depended upon. 
 
 From these it would appear, that when 
 the commercial treaty between France and 
 England was adjusted, in the year 1786, 
 those who conducted it, as well as those 
 who were consulted on the subject, uni- 
 formly conceived, that France bad a deci- 
 ded advantage in the manufacture of every 
 thing for which affluence dictates a desire ; 
 and that England, on the contrary, ex-
 
 OP AUGMENTING WEALTH, &C. 33S 
 
 celled in the formation of all those ar- 
 ticles which administer to the comfort of 
 such as enjoy but a moderate degree of 
 wealth. * 
 
 ♦ See Appendix, No, X!V. containing extracts from various 
 papers and memorials, written at the time of the commercial 
 treaty with France, 1786. 
 
 From these it appears, 
 
 1. That, in the article of cloth, the fine cloths of France 
 were preferable to the fine cloths of England ; whilst, on the 
 other hand, it was conceived, that the lower-priced cloths of 
 England could meet with no competition either for quality or 
 cheapness. 
 
 2. That, though France had a most decided superiority in 
 the manufacture of rich silks, England was supposed to have 
 the advantage in making of ribbons, stuffs mixed with silk, 
 ice. &c. 
 
 3. That, in the article of linens, the superiority that 
 France enj<jyed was solely confined to the cambrics and finer 
 sorts. 
 
 4. That, ih articles of millinery, and things for the per- 
 sonal decorations of the luxurious, France had an undoubted 
 pre eminence. 
 
 5. That, in the manufacture of glass, the superiority of 
 France in making of l(M.kmg-glasscs. was as decided as that of 
 England in the formation of common glass, and of articles of 
 crystal for general use. 
 
 6. That the china of France enjoyed an undisputed supe- 
 riority ; whilst the potteries and earthenware ot England were 
 considered as not to be rivalled. 
 
 7 That the superior taste and excellence, as well as the 
 cheapness, of all articles of jewellery and siiTer-smitk work in
 
 33Q OF THE MEANS 
 
 To these illustrations, derived from con^ 
 templating the situation of the two nations 
 in Europe, where manufacturing industry 
 exists in the greatest state of perfection, it 
 must be satisfactory to add proofs of the 
 justice of the theory, drawn from the his- 
 tory of man in a very different stage of im- 
 provement. 
 
 Although the inhabitants of Mexico and 
 Peru, before the Europeans penetrated into 
 America, had attained a degree of civiliza- 
 tion unknown to any of the other natives 
 of that country, yet their progress in those 
 arts which diffuse general opulence through- 
 out a community was trifling, when com- 
 pared to what was exhibited at this early 
 period, even by the most uncivilized na- 
 tions of Europe. 
 
 In both these countries, however, the 
 right of property seems to have been per- 
 fectly understood, and established to its 
 full extent, though a very marked differ- 
 
 France, was as decided as that of all articles of common hard- 
 
 Avare, the manufacture of England. 
 
 4
 
 OF AUGMENTING WEALTH, &C. 337 
 
 ence existed in tiie manner in which their 
 landed property was distributed. 
 
 In Mexico, " every person who could be 
 " denominated a freeman, had property in 
 « land." * 
 
 There was also a numerous, a proud, and 
 independent nobility ; some possessed of 
 princely, others of more limited fortunes, f 
 and the Emperor was maintained by taxes 
 on land as well as the acquisitions of in- 
 dustry. 
 
 In Peru, all the lands were divided into 
 three shares ; one was consecrated to the 
 sun, and applied to the acquisition of deco- 
 rations for their temples, and for what was 
 requisite for celebrating the public rites of 
 religion. Another was appropriated for 
 the sole use of the Inca, or Prince of the 
 Empire. The third was reserved for the 
 subsistence of the people, among whom it 
 was annually parcelled out : their posses- 
 sion only enduring for a year. 
 
 * Robertson's History of America, Vol. II. p. 274. 4to 
 edit. 
 
 + Ibid. p. 280.
 
 358 OF THE MEANS 
 
 From these several distributions of pro- 
 perty, our theory would naturally lead us 
 to conclude, that, in Peru, the large and 
 splendid fortunes of the Inca and the 
 Church, and the limited provision of the 
 people, must tend to encourage the arts 
 calculated to satisfy the fancy, and please 
 the taste of the luxurious, and comparative- 
 ly to discourage those destined to form the 
 more common objects of comfort. Whilst, 
 in Mexico, it would teach us to expect, that 
 the encouragement which demand creates 
 could not have been confined to the manu- 
 facture of things of ornament or curiosity ; 
 that it must, on the contrary, have been of 
 a nature more general, extending itself to 
 those arts which produce articles of conve- 
 nience and utility. 
 
 Accordingly, to such a degree are our ex- 
 pectations realized, that, in Peru, it appears 
 there was no complete separation of profes- 
 sions, except in the case of artists employ- 
 ed " in works of mere curiosity or orna- 
 '* ment, and that the crafts of common and 
 " most necessary use in life were exercised
 
 OP AUGMENTING WEALTH, &C. ^39 
 
 *' by every Peruviali indiscriminately." * 
 Whilst in Mexico, the functions of the ma- 
 son, the weaver, the goldsmith, the painter, 
 and " of several other crafts, were carried 
 *' on by different persons, and the separa- 
 " tion of the arts necessary iti life to6k 
 " place to a considerable extent." f 
 
 In reality, the distribution of wealth not 
 only regulates and directs the channels in 
 which the industry of every society is em- 
 barked, in such a manner as to decide upon 
 the nature, condition, and quality of what 
 is produced, but even in a great degree 
 determines the progress of population 
 throughout the world. 
 
 If it did not lead into a wider field than 
 IS consistent with the object of our present 
 investigation, it would be easy to show, 
 that as what a late ingenious author calls 
 the positive check to population, (which he 
 points out as common to man, with the rest 
 of the animal and vegetable creation,) to wit, 
 the want of nourishment, in reality arises 
 
 ♦ Robcrtsoii's Iliscory of America, Vol. II. p. 323. 
 + Ibid. p. 276.
 
 S40 OF THE MEANS 
 
 from the deficiency of the objects of man's 
 desire, that is, of his wealth ; so what he 
 has called the preventive check to popula- 
 tion, and which he deems peculiar to man, 
 is in every society, and in all its forms, uni- 
 versally to be traced home to the distribu- 
 tion of wealth. * 
 
 * " The preventive check is peculiar to man, and arises 
 " from that distinctive superiority' in his reasoning faculties, 
 " which enables him to calculate distant consequences. Plants 
 " and animals have apparently no doubts about the future support 
 *' of their offspring. The checks to theirindefinite increase, there- 
 ** fore, are all positive. But man cannot look around himi 
 ** and see the distress which Irequently presses upon those who 
 ** have 1 rce families ; he cannot contemplate his present pos- 
 ** sessions or his earnings, which he now nearly consumes him- 
 ** self, and calculate the amount of each share, when, with 
 « very little addition, they must be divided, perhaps, among 
 ** seven or eight, without feeling a doubt, whether, if he fol- 
 " low the bent of his inclinations, he may be able to support 
 " the offspring which he will probably bring into the world. 
 " In a state of equality, if such can exist, this would be the 
 " simple question. In the present state of society other con- 
 " siderations occur. Will he not lower his rank in life, and be 
 " obliged to give up, in great measure, his former society ? 
 " Does any mode of employment present itself, by which he 
 " may reasonably hope to maintain a family ? Will he not 
 *' at any rate subject himself to greater difficulties, and more 
 " severe labour, than in his single state .? Will he not be un- 
 ** able to transmit to his children the same advantages of edu- 
 ^* cation and improvement that he had himself possessed ?
 
 OF AUGMENTING WEALTH, &C. 341 
 
 Thus, as it is the labour of man, whether 
 performed with his hands or by capital, 
 employed in augmenting the quantity, or 
 in improving the quality, of the produc- 
 tions of nature, and in adapting them for 
 consumption, that forms the means of in- 
 creasing the wealth of mankind ; so it is 
 the distribution of wealth, which, determin- 
 ing the nature of demand, regulates the 
 direction of labour, and distributes it in 
 such a manner, as to cause a variety in the 
 productions of industry, conformable to 
 the wants and desires to which the habits 
 created by the power of enjoyment give 
 birth. 
 
 For the distribution of wealth not only 
 decides on the character of manufacturing 
 industry, but on the proportion betwixt 
 the share of the labour of man which is 
 
 " Does he even feel secure, that, should he have a large family, 
 •' his utmost exertions can save them f" m rags and squalid 
 " poverty, and their consequent degradation m the communi- 
 " ty ? And njay he not be reduced to the grating oe< essity 
 " of forfeiting his independence, and of being obliged to the 
 " sparing hand of chanty for support ?"— .Essay on the Prin- 
 ciples of Population, by J. K. Mallhus.
 
 342 OF THE MEANS 
 
 directed towards increasing the quantity, 
 and meliorating the quaUtj, of the produc- 
 tions of nature, and the share which is oc- 
 cupied in giving form to the materials pro- 
 duced. When great inequality of fortune 
 prevails, the demand for labour employed 
 in giving forms adapted to the taste of the 
 luxurious and the rich, encourages that 
 species of industry ; whilst the extreme 
 poverty of those who look for little beyond 
 the necessaries of life, occasioning no in- 
 crease of demand for things of this class, 
 affords little encouragement to labour em- 
 ployed in augmenting the quantity, and 
 meliorating the quality, of the productions 
 of nature, and no inducement to improve- 
 ment in that line of industry. 
 
 Nothing can more clearly illustrate this 
 position, than a comparative view of the 
 agriculture of France and England. The 
 flourishing state of agricultural labour in 
 . England has long been a general topic of 
 admiration ; whilst we are told by the in- 
 genious author of the articles Fermier and
 
 OF AUGMENTING WEALTH, &C. S4S 
 
 Grain, in the Encydopedie^ * that in France, 
 out of thirty-six millions of acres under the 
 plough, thirty millions are cultivated by 
 tenantry who are so poor, that the landlord 
 is obliored to furnish labourin^]^ cattle and 
 seed, and often even to advance money, 
 till the first harvest, for payment of the ex- 
 pences of the farmer's living, and of his 
 farming instruments, f 
 
 On the principles here stated, the causes 
 of deficiency in any particular line of in- 
 dustry may in every country be easily dis- 
 covered, by an examination into the distri- 
 bution of the property of its inhabitants, 
 and this appears to be all that is useful or 
 
 * M. Quesnay. 
 
 •J- See Appendix, No. XV. containinj^, 1. Descriptions ex- 
 tracted from the Ephemerides de Citoyen, which <:iv«> an idea 
 of the situation of lands cultivated by metoyers, under the cul- 
 ture practised, as Quesnay supposes, on thirty millions of acres 
 of the arable land of Fiance. '■Z. A statement of the annual 
 expenditure on one farm, and of the annual produce of ano- 
 ther, ill the Carse of Gowrie, in Scotland ; to which is added, 
 an account of the production of that district. 
 
 By contrasting these statements, the reader will see how 
 much the wealth of a nation depends on the direction of its in> 
 tlustry.
 
 344 OF THE MEANS 
 
 necessary. Any attempt to state the pre- 
 cise distribution of wealth which tends 
 most to encourage the production of wealth, 
 would be liable to the same criticism that 
 the author of the Wealth of Nations has 
 made on that table or formula, which the 
 economists presented to the world as ac- 
 curately displaying the order of expendi- 
 ture most advantageous for a community. 
 Dr Smith has truly said, that, as there are 
 many regimens under which the human 
 bodv enjoys health, so a country may en- 
 joy, to a certain degree, prosperity under 
 very different circumstances. * 
 
 In general, however, it may be observed, 
 that great inequality of fortune, by impo- 
 verishing the lower orders, has every where 
 been the principal impediment to the in- 
 crease of public w'?alth. We know from 
 experience, that no country of equal ex- 
 tent ever enjoyed so much wealth as what 
 is diffused over this island. We have a 
 right, therefore, to conclude, that the dis- 
 
 * Wealth of Nations, Vol. II. p. 271. 4to edit. 
 10
 
 OF AUGMENTING WEALTH, &C. 345 
 
 tribution of property has been more fa- 
 vourable to the growth of wealth in this 
 than in any other country. In the begin- 
 ning of the seventeenth century, Lord Ba- 
 con, accounting for the advantages obtained 
 by the English in their wars with France, 
 ascribes them chiefly to the superior ease 
 and opulence enjoyed by the common peo- 
 ple ; * and it certainly appears, that, with 
 still greater confidence, the superiority of 
 wealth we enjoy may be ascribed to the 
 same cause. 
 
 * " Let states that aim at greatness, take heed how their 
 *' nobility and gentlemen do multiply too fast ; for that ma- 
 *' keth the common subject grow to be a peasant and a base 
 ** swain driven out of heart, and in effect but a gentleman's 
 "labourer; even as you may see in coppice-woods. If you 
 *' leave your stadles too thick, you shall never have clean 
 **■ underwood, but shrubs and bushes. So, in countries, if 
 ** the gentlemen be too many, the commons will be base ; 
 *' and you will bring it to that, that not the hundredth poll 
 "will be fit for a helmet; especially as to the infantry, 
 *' which is the nerve of an army ; and so there will be great 
 *' population and little strength. This which I speak of has 
 " been no where better seen, than by comparing of England 
 ** and France ; whereof England, though far less in terri- 
 ** tory and population, hath been, nevertheless, an over match 
 *' in regard the middle people of England make good soldiers, 
 *' which the peasants of France do not." — Lord Bacon's Es- 
 •says, p. 80. See also his Life of Henry VII.
 
 S4/6 OP THE MEANS 
 
 The wealth of mankind, it has been ob- 
 served, * can alone be increased : — 
 
 1. By labour, whether personal or per- 
 formed by capital, employed in increasing 
 the quantity, and meliorating the quality, 
 of the objects of his desire ; that is, bt/ agri* 
 culture, 
 
 2. By labour, whether personal or per- 
 formed by capital, employed in giving 
 form to, and adapting commodities for, 
 consumption ; that is, by manufacturing in-- 
 dustry. 
 
 The superior efficacy of the application 
 of capital, for the purpose of executing 
 every branch of labour, over the most im- 
 proved manual dexterity, has also been ex- 
 plained ; and the degree in which the in- 
 crease of public wealth is dependent on 
 this circumstance, has been illustrated and 
 made manifest, f 
 
 It becomes, therefore, of the greatest 
 importance to remark, that, though the 
 channels of expence of men of large and 
 
 * See page 273. + See page 277, &c.
 
 OF AUG-MENTING WEALTH, &C. SV/ 
 
 extended fortunes, that instil a desire for 
 articles of taste, are often as unbounded as 
 the fanciful imagination of those who ad- 
 minister to the satisfaction of their caprices; 
 yet their habits cannot possibly suggest ex- 
 penditure, for the purpose of supplanting 
 labour they are never called on to perform. 
 On the contrary, the habits of a man pos- 
 sessed of small fortune, which adds to those 
 comforts his industry enables him to ac- 
 quire, naturally suggest the desire of sup- 
 planting the labour he performs, whilst he 
 finds, in his moderate wealth, means of 
 executing that which benefits himself, and 
 enriches the community to which he be- 
 longs. 
 
 The description of Montesquieu of the 
 nobility of France, as living on their ca- 
 pital, might with justice have been extend- 
 ed to those frequenters of all courts who 
 are born to inherit large fortunes ; for the 
 real source of increasing wealth is alone to 
 be found amongst farmers, manufacturers, 
 merchants, whose habits open their eyes to 
 farther means of supplanting the labour
 
 S48 OF THE MEANS 
 
 they perform or superintend, and which 
 their small, but increasing fortunes, enable 
 them to execute, with benefit to their pri- 
 vate, and with still greater advantage to the 
 public fortune. 
 
 How different, in its effects, is this real 
 source of increasing opulence from parsi- 
 mony, which has been falsely held out as 
 the active means of extending public wealth. 
 By parsimony, it has been made evident, 
 that capital, or the means of performing la- 
 bour, is increased at the expence of ab- 
 stracting a part of what would be expended 
 in consumable commodities, which must, 
 of course, diminish the demand for labour 
 employed in producing and giving form to 
 articles of consumption, whilst the power 
 of executing it is increased. But the in- 
 dustrious farmer or manufacturer, who dis- 
 covers new modes of supplanting or per- 
 forming labour, and finds in his small for- 
 tune the means of establishing them in 
 practice, procures for himself a greater pro- 
 fit, and, at the same time, furnishes the pub-
 
 OF AUGMENTING WEALTH, &C. 349 
 
 lie with the commodity in which he deals 
 at a cheaper rate. 
 
 Whilst, therefore, he adds his augment- 
 ed profit to his capital, there remains the 
 same smii as usual, for the expenditure of 
 his family in consumable commodities; and 
 his customers having got the article he 
 produces cheaper, must have a larger por- 
 tion of their revenue than formerly, to ap- 
 ply to the acquisition of other articles of 
 consumption. 
 
 By this means capital is increased, not 
 (as by parsimony) at the expence of di- 
 minishing the means of consuming ; for 
 the augmentation of both is affected by the 
 same operation, and the society acquires 
 the power of executing an increased quan- 
 tity of labour at the moment the means of 
 consuming, and, consequently, the demand 
 for labour, is augmented. 
 
 Thus the distribution of wealth not on- 
 ly regulates and decides the channels in 
 which the industry of every country is em- 
 barked, and, of course, the articles in the 
 production of which it excels ; but a pro-
 
 300 OF THE MEAKS 
 
 per distribution of wealth insures the in- 
 crease of opulence, by sustaining a regular 
 progressive demand in the home market, 
 and still more effectually, by affording to 
 those whose habits are likely to create a 
 desire of supplanting labour, the power of 
 executing it. * 
 
 * Though we do not recollect any attempt to show why 
 the opulence of the lower orders tends to accelerate the growth 
 of national wealth, or any reasoning to piove that it must 
 have that eife.ct ; yet the fact (as appears from the following 
 extracts) has not escaped the observation of the learned and 
 ingenious. 
 
 *' The advice of King Henry VII. (whereofi have spoken 
 ** largely in the History of his Life) was profound and ad. 
 ** mirable in making farms and houses of husbandry of a stand- 
 *' ard ; that is, maintained with such a proportion of land 
 *' unto them, as may breed a subject to live in convenient 
 *' plenty, and no servile condition ; and to keep the plough 
 " in the hands of the owners, and not mere hirelings. And 
 *' thus, indeed, you shall attain to Virgil's character, which he 
 " gives to ancient Italy. 
 
 " Terra— —-potens armis atque ubere glebce." 
 
 Bacon's Essays, p. 81. 
 
 *' Above all things, good policy is to be used, that the trea- 
 " sure and monies in a state be not gathered into few hands. 
 " For, otherwise, a state may have a great stock and yet 
 *' starve. And money is like muck, not good except it be 
 " spread.^'' — Bacon's Essays, p. 39. 
 
 *' Whether a people can be called poor, when the common
 
 OF AUGMENTING \\T:aLTH, &C. 34^1 
 
 Neither are these the only means by 
 which a wise and fortunate distribution of 
 wealth tends to produce an increase of the 
 wealth of a country ; for when, in conse- 
 quence of the mode in which Wealth is dis- 
 tributed, industry is once embarked in the 
 production and formation of particular 
 commodities, and dexterity is acquired in 
 preparing for the market things for which 
 the distribution of the growing wealth of 
 colonies and other countries create a de- 
 sire ; a new and increasing demand encou- 
 rages and sustains an extension of pro- 
 duction greater than the wealth or the 
 wisest distribution of wealth in any country, 
 isolated and cut off from all coramunica- 
 
 *' sort are well fed, clothed, and lodged ?" Queribt, by the 
 Bishop of Cloyne. 
 
 *' Quand le commerce est en peu de mains, on voit quelques 
 *' fortunes prodigieuses est beaucoup de misere ; lorsqu* enfin 
 " il est plus etendu, I'opulence est geiieiale, les grandes for- 
 *' tunes rares." — " When commerce is in few hands, one sees 
 *' some very large fortunes in the midst of general poverty; 
 *' but when it gets into a greater number of hands, we see 
 *' general opulence, and few large fortunes." — Discours de 
 M. De Voltaire, a sa reception a V Academic Frangaise.
 
 S5Q OF THE MEANS 
 
 tions with others, could either authorize 
 or maintain. 
 
 For skill in the means of supplanting and 
 performing labour bj capital, which habit 
 creates, and the power of executing it by 
 the possession of capital, at all times insures 
 to countries practised in different branches 
 of industry, means of furnishing the com- 
 modities for which growing opulence 
 creates a desire, at a cheaper rate than 
 they can be manufactured in a country 
 where either the progressive increase of 
 wealth, or a sudden change in the distri- 
 bution of it, has given birth to new de- 
 sires. 
 
 It must be observed, too, that this new 
 source of demand, as it creates an augmen- 
 tation of production, and consequently of 
 wealth, instils into the inhabitants of the 
 country, advanced in any peculiar line of 
 industry, new desires, which in return 
 create a demand for things that the climate 
 or soil of the society rising in opulence 
 enables them exclusively to produce, as 
 well as for things that the habits of indus-
 
 OF AUGMENTING WEALTH, &C. 353 
 
 try, and the soil and climate of a society 
 in which the distribution of property is al- 
 tered, enables them to produce, of a better 
 quality, and at a cheaper rate. 
 
 It is thus that commerce, though not a 
 means of increasing wealth, must be con- 
 sidered as the cause of increased industry ; 
 for, by promoting an interchange of com- 
 modities betwixt two countries, it becomes 
 a most powerful agent in extending the de- 
 mand for the manufactures of each, enrich- 
 ing the one and the other, by exciting a 
 quantity of industry that would otherwise 
 have remained dormant ; but which, when 
 thus brought into activity, augments the 
 productions of both. 
 
 To the economists (who maintained 
 that value in exchange is the basis of all 
 wealth, * that the increase of price is the 
 increase of wealth, and that the riches of a 
 country augment in proportion as the ex- 
 changeable value of its commodities in- 
 
 * Philosophic Rurale, p. 60 
 Z
 
 354; OF THE MEANS 
 
 creases) * commerce ought to have ap- 
 peared a direct means of increasing wealth. 
 A demand, on the part of England, for two 
 thousand pounds worth of any particular 
 French wine, as it must alter the propor- 
 tion betwixt the demand for, and the quan- 
 tity of it, must increase the value of the 
 whole of that sort of wine. In like man- 
 ner, a demand on the part of France, for 
 two thousand pounds worth of English 
 cloth in return, must alter the propor- 
 tion betwixt the demand for, and the 
 quantity of it, in such a manner, as to 
 increase the total value of that commo- 
 dity. 
 
 It is impossible, therefore, to discern 
 how the disciples of Quesnay, who regard- 
 ed exchangeable value as the basis of 
 wealth, should not have considered com- 
 merce, which thus increases the value of 
 the commodities of both countries, as a 
 means of increasing wealth. 
 
 Yet this sect of philosophers, uniformly^ 
 
 * Physiocratie, p. 116.
 
 OF AUGMENTING WEALTH, &C. 855 
 
 excluding from their view the effect which 
 increase of demand must have in augment- 
 ing the exchangeable value of the goods 
 of all countries, amongst which a commer- 
 cial intercourse exists, and confining all 
 their views of commerce to the mere act 
 of exchange, have obstinately repeated 
 throughout their writings, in forms innume- 
 rable, that commerce is only an excliange 
 of equal value, for equal value. * 
 
 If wealth, however, has been properly 
 considered as consisting in the abundance 
 of the objects of the desires of mankind ; 
 if exchangeable value has been with pro- 
 priety regarded merely as tlie means by 
 which, in civilized society, mankind express 
 their preference for the various productions 
 of human industry, and thus regulate the 
 channels in which it is embarked j com- 
 merce cannot with consistency be stated 
 as a direct means of producing, and, of 
 course, it cannot be deemed a means of 
 
 * See Dialogues sur le Commerce et sur les Travaux 
 des Artisans, by Qviesnay, Printed in Phjsiocratie,
 
 S56 OF THE MEANS 
 
 increasing wealth. It must, however, ap- 
 pear, in a state practised in the various 
 branches of labour, to be the great cause 
 of putting the means of increasing wealth 
 into action. 
 
 It is from this circumstance that the 
 wealth of a country, in these days when the 
 commercial relations of nations extend 
 themselves over the globe, no longer de- 
 pends alone on the internal distribution of 
 its wealth ; and that the progress of wealth 
 is now accelerated or retarded, in propor- 
 tion as the distribution of the growing 
 wealth of rising countries, or changes in 
 the distribution of wealth in societies 
 that have been long established, give birth 
 to a great or small demand for the com- 
 modities in the production of which, in 
 consequence of the internal arrangement 
 of its own wealth, a country has been long 
 practised. 
 
 It is only necessary to view the nature of 
 the British manufactures for which Ameri- 
 ca furnishes a demand, to be convinced, 
 that the encouragement to British industry?
 
 OF AUGMENTING WEALTH, &C. 357 
 
 afforded by demand from the United States, 
 must have been comparatively small in- 
 deed, had that country been universally 
 cultivated by slaves, and parcelled out into 
 estates productive of large incomes, such 
 as our West India colonies exhibit. On 
 the other hand, the advantages that French 
 industry would have derived from such an 
 arrangement of American property, are at 
 once suggested, by resorting to the draw- 
 ing-rooms, viewing the clothing, and con- 
 sidering the expenditure, even of the Bri- 
 tish West India planter. 
 
 If, in the changes which have taken 
 place in the distribution of European pro- 
 perty, we had perceived (instead of a ten- 
 dency to break down properties, and to 
 emancipate from personal slavery, as well 
 as from slavish tenures) a gradual accumu- 
 lation of wealth into large masses, and a 
 greater proportion of the lower orders re- 
 duced into a state of perfect slavery ; the 
 encouragement British industry would have 
 derived from European demand must have 
 been very different from what has been ex-
 
 358 OF THE MEANS 
 
 perienced, even under all the turbulent 
 events that have distinguished modern 
 times. 
 
 This view of the circumstances on which 
 the progressive wealth of European na- 
 tions at present depends, must afford mat- 
 ter of great consolation to every man who 
 is seriously concerned for the prosperity 
 and aggrandizement of the British Em- 
 pire. 
 
 For, if it could be allowed to enjoy peace 
 and tranquillity, there never was a period 
 in which the property of mankind seemed 
 almost universally to be getting into an ar-. 
 rangement that insured a similar extension 
 of demand for the produce of the peculiar 
 species of industry in which any one coun- 
 try by practice excelled. 
 
 And this flattering prospect, however 
 much it may excite the envy of other Eu- 
 ropean nations, cannot, with reason or 
 with impunity, induce them to abstain 
 from, or throw impediments in the way 
 of, commercial communication with us. 
 
 For, on the principles liere stated, it is
 
 OF AUGMENTING WEALTH, &C. 559 
 
 obvious, that commerce cannot exist be- 
 twixt any two countries, without equally 
 exciting the industry of both. No means 
 can be devised of interchanging commodities 
 that will exclusively encourage the indus- 
 try of any one of the parties concerned ; 
 and the foolish objections to commercial 
 communication, that ignorant jealousy sug- 
 gests, must ever retard the progress of the 
 industry of a country that makes them, as 
 efFectuaily as that of the country, against 
 the increase of whose industry they are 
 levelled. 
 
 Great Britain cannot exclude the laces 
 and cambrics of France, without obliging 
 the consumers of those articles, through- 
 out the British dominions, (in consequence 
 of the necessary rise of price,) to appropri- 
 ate more goods to the purchase of these 
 commodities ; less must of course remain 
 for the acquisition of other things in the 
 liome market. Further, such a prohibition 
 necessarily abstracts a demand, to tlie 
 amount of the value of the lace and cam- 
 bric, from those commodities, in the ma-
 
 360 OF THE MEANS 
 
 nufacture of which, practice has given Eng- 
 land peculiar dexterity, which France 
 must have desired in return ; for no de- 
 gree of freedom in commercial commu- 
 nication can ever convey goods from one 
 country to another, without an equivalent. 
 France, on the other hand, cannot ex- 
 clude the hardware of Birmingham, or the 
 cloth of Leeds, without making the natives 
 of that country appropriate more commo- 
 dities to the purchase of hardware and 
 coarse cloth. This of necessity abstracts 
 a portion of what would be employed in 
 acquiring other objects of internal indus- 
 try ; besides which, a demand to the a- 
 mount of the value of the hardware and 
 cloth must, by this means, be withdrawn 
 from the acquisition of articles of Frencli 
 growth and manufacture, which England 
 would require in return. * 
 
 * The clamour made in P' ranee against the Commercial 
 Treaty in 1787i must have been excited by the industry of a 
 few interested individuals ; for it is impossible that that coun-; 
 try should not have derived equal benefit with England from 
 the intercourse.
 
 OF AUGMENTING WEALTH, &C. S6l 
 
 Even the increase of price of any foreign 
 commodity, occasioned by taxation, is just- 
 ly regarded by the author of the Wealth 
 of Nations as prejudicial to domestic in- 
 dustry ; for he truly observes, that " the 
 " dearer the Birmingham manufacturer 
 " buys his foreign wine, the cheaper he 
 
 The following extract, from the seventh Memoire of M. 
 Boyetet, Director of Commerce in the years I787 and 1788, 
 shows the amazing increase of demand for wines that took 
 place immediately after the Treaty of Commerce. 
 
 " Les etats qu'on a de la sortie des vins de Bourdeaux pour 
 ** I'Angleterre et I'lrelande, dans les six premiers mois de 
 " cette annee, portent deux mille sept cent cinquante tonneau.v 
 '* de vin. 
 
 " Ceux des six derniers mois de I'annce 1786, portent mille 
 " cinq cent quatre-vingt-trois tonneaux. 
 
 " II en resiilteroit une augmentation de sortie dans les six 
 '* premiers mois de cette annee, de mille cent soixante sept 
 " tonneaux de vin de Bourdeaux." 
 
 '• The account of wines exported from Bourdeaux to Eng- 
 " land and Ireland, in the first six months of this year, states 
 " it to amount to two thousand seven hundred and fifty hogs- 
 " heads. 
 
 " In the last six months of the year 1786, there appear 
 " to have been only one thousand five hundred and cighty- 
 ** three hogsheads exported. 
 
 «' It follows, then, that in the first six months of this year, 
 ** there has been an increased exportation to the amount of 
 " one thousand one hundred and sixty-seven hogsheads of 
 " claret,"
 
 362 OF THE MEANS 
 
 " necessarily sells that part of his hardware, 
 " with which, or, what comes to the same 
 " thing, with the price of which he buys 
 " it. That part of his hardware, therefore, 
 ** becomes of less value to him, and he has 
 ** less encouragement to make it. The 
 " dearer consumers in any one country pay 
 " for the surplus produce of another, the 
 " cheaper they necessarily sell that part of 
 ** their own surplus produce, with which, 
 " or, what comes to the same thing, with 
 " the price of which they buy it. That 
 " part of their own surplus produce be- 
 " comes of less value to them, and they 
 " have less encouragement to increase its 
 " quantity."* 
 
 Impediments, therefore, to commercial 
 communication, whether by prohibitions 
 or taxation, must ever retard the growing 
 opulence of mankind, as much by discou- 
 raging the industry of the country whose 
 folly occasions them, as by any effect they 
 can have on the industry of the country 
 
 * Wealth of Nations, Vol. II. p. 514, 4to edit. 
 
 7
 
 OF AUGMENTING WEALTH, &C. 36S 
 
 they are meant to injure. The quibbling 
 policy of commercial negotiators, who false- 
 ly and ignorantly pride themselves on tak- 
 ing advantage of each other, ought alone 
 to create the contempt it merits ; for human 
 ingenuity cannot contrive a means of con- 
 ducting the commercial relations betwixt 
 any two countries, that does not alike pro- 
 mote the prosperity of both. 
 
 If, in delineating the means and the 
 causes of the progressive increase of wealth, 
 we have been fortunate enough to impress 
 conviction, it will follow ; — 
 
 That man owes his wealth, or the accu- 
 mulation of the objects of his desire, which 
 he alone of all animals possesses, to the 
 power of directing his labour to the increas- 
 ing of the quantity, or the meliorating of 
 the quality, of the productions of nature ; 
 and to the power of supplanting and per- 
 forming labour by capital ; — faculties pe- 
 culiar to, and characteristic of, the human 
 species : — 
 
 That though land, labour, and capital, 
 may be regarded as the sources of wealth,
 
 364} OF THE MEANS 
 
 the wealth of mankind is alone increased 
 bj labour, whether performed by the hand 
 of man or by capital, employed in increas- 
 ing the quantity, and meliorating the qua- 
 lity, of the productions of nature ; and by 
 labour, whether manual or performed by 
 capital, employed in giving form to, and 
 adapting raw materials for consumption : — 
 
 That the direction which labour in every 
 country takes, and of course the channels 
 of industry in which it excels, — nay, the 
 extent to which the exertions of its in- 
 dustry, and even its population, can be 
 pushed, depend upon the distribution of its 
 wealth :^ — 
 
 That when once the peculiar character 
 of the industry of a country is, by this 
 means, fixed and decided, the progress of 
 its opulence is accelerated or retarded in 
 proportion as the distribution of wealth in 
 otlier countries creates a demand for the 
 articles, in the production of which it ex- 
 cels. And, lastly : — 
 
 That all impediments thrown in the way 
 of commercial communication, obstruct 
 
 4
 
 OF AUGMENTING WEALTH, &C. oG5 
 
 the increase of wealth, as mucli by discou- 
 raging the industry of the country which 
 gives rise to them, as by their effects on the 
 industry of the country they are meant to 
 injure.
 
 \PPENDIX.
 
 APPENDIX. 
 
 No. I. (Page 48.) 
 
 XL faut distinguer les hiens d'avec les riches^ 
 ses. Ceux-lk ont une valeur usuelle, et n'oiit 
 point de valeur v^nale. Celles ci ont une va- 
 leur usuelle et une valeur venale. II ne suffit 
 pas a une nation d'avoir des biens. II taut 
 qu'elle tende a se procurer de grandes richcsses, 
 pour subvenir par le commerce a tons les be- 
 soins differens des membres dont elle est compo- 
 see." — P hysiocratie, p. cxviij. 
 
 No. II. (Page 110.) 
 
 The system which regards commerceasthesole 
 
 source of wealth, was long maintained by most 
 
 A a
 
 570 APPENDIX, NO. II. 
 
 of the eminent men who treated on commercial 
 subjects; as the following extracts (to which 
 many others might be added) sufficiently show. 
 
 " It is a general opinion, that the trade of 
 England was never greater, and it may be true, 
 that if it be so, yet it will not absolutely con- 
 clude, that the kingdom doth increase in riches ; 
 for the trade may be very abundant, and yet by 
 consumption and importance of more than is 
 exported, the stock may waste. 
 
 " The balance would be a true solution of the 
 question, if it could be rightly had : but by rea- 
 son it must be made up by a medium of the 
 books of rates, it will be very uncertain. 
 
 " Therefore we must seek another rule that is 
 more sensible, upon which we may all judge, 
 and that may be by the plenty or scarcity of 
 money ; for it is a true rule, if money increase, 
 the kingdom doth gain by trade ; if it be scarce, 
 it loseth.*' — Sir Thomas Roe's Speech in Parlia- 
 ment, 1640. 
 
 *' Those trades may be esteemed good, which 
 consume our products and manufactures, upon 
 which the value of our land and employment of 
 the poor depends ; that increase our seamen 
 and navigation, upon which our strength de- 
 pends J that supply us with such commodities as
 
 APPENDIX, NO. ir. 371 
 
 we absolutely want for carrying on our trade^ or 
 for our safety, or carry out more than they bring 
 in, upon which the increase of riches depends. 
 
 " On the contrary, those that import more 
 than they export, or bring us in goods perfectly 
 manufactured, or any sort of goods that hinder 
 the expence of our own, or that carry our wool 
 or other materials, to enable foreign nations to 
 make manufactures, to be spent in the room of 
 our own ; or bring in commodities that are not 
 of necessary use, but tend to increase idleness 
 and luxurious expences ; or are carried on by 
 foreign bottoms, or factors or merchants that are 
 foreigners, (not so advantageous as when carried 
 on by our own ships and people ;) or trades car- 
 ried on by the exportation of coin or buliioiu 
 Such heads as these may serve as a touchstone 
 for the examination of trades.**— ^A Discourse of 
 Coin, Trade, and Paper Credit, p. 58. 1697. 
 
 " Although a kingdom may be enriched by 
 gifts received, or by purchase taken from some 
 other nations, yet these are things uncertain, 
 and of small coubideration when they happen. 
 The ordinary means, therefore, to increase our 
 wealth and treasure is by foreign trade, wherein 
 we must ever observe this rule, to sell n)ore to 
 strangers yearly than we consume of theirs ia
 
 572 APPENDIX, NO. II. 
 
 value. For suppose that when this kingdom is 
 plentifully served with the cloth, lead, tin, iron, 
 fish, and other native commodities, we do year- 
 ly export the overplus to foreign countries, to 
 the value of twenty two hundred thousand 
 pounds ; by which means we are enabled be- 
 yond the seas to buy and bring in foreign wares 
 for our use and consumption, to the value of 
 twenty hundred thousand pounds. By this or- 
 der duly kept in our trading, we may rest as- 
 sured, that the kingdom shall be enriched year- 
 ly two hundred thousand pounds, which must be 
 brought to us in so much treasure ; because that 
 part of our stock which is not returned to us in 
 wares, must necessarily be brought home in trea- 
 sure.'* — England's Treasure by Foreign Trade, 
 by Thomas Mun, p. 7. 
 
 " That the greatness of this kingdom de-> 
 pends upon foreign trade, is acknowledged, and 
 therefore the interest of trade not unbecoming 
 persons of the highest rank ; and of this study, 
 as well as others, it may be said, there is an in- 
 finity in it J none, though of the largest intel- 
 lects and experience, being able to fathom its 
 utmost depth. 
 
 " Among other things relating to trade, there 
 has been much discourse of the balance of trade ;
 
 APPENDIX, NO. II. 373 
 
 the right understanding whereof may be of sin- 
 gular use, and serve as a compass to steer by, in. 
 the contemplation and propagation of trade for 
 public advantage. 
 
 *' The balance of trade is commonly under- 
 stood two ways : 
 
 '' I. Generally,— something whereby it may 
 be known whether this kingdom gains or loses 
 by foreign trade. 
 
 " 2. Particularly, — something whereby we 
 may know by what trades this kingdom gains, 
 and by what trades it loses. 
 
 *' For the first of these : 
 
 " It is the most general received opinion, and 
 that not ill-grounded, that this balance is to be 
 taken by a strict scrutiny of what proportion the 
 value of the commodities exported out of this 
 kingdom bear to those imported; and if the ex- 
 ports exceed the imports, it is concluded the na- 
 tion gets by the general course of its trade ; it 
 being supposed that the overplus is imported in 
 bullion, and so adds to the treasure of the king- 
 dom, gold and silver being taken for the measure 
 and standard of riches." — A Discourse of Trade, 
 by Sir Josiah Child, p. 163 and l64. 
 
 " If we export any value of our manufactures 
 for the consumption of a foreign nation, and im-
 
 574* APPENDIX, NO. II. 
 
 port thence no goods at all for our own con- 
 sumption, it is certain the whole price of our 
 own manufactures exported must be paid to us 
 in money, and that all the money paid to us is 
 our clear gain. 
 
 " The merchant, perhaps, does not get QO per 
 cent, by the goods he sends abroad ; yet if he sells 
 his goods for the very price he paid for them, 
 and brings back the whole price in money, and 
 not in goods, to his native country, the merchant, 
 in this case, gets nothing, but his country gets 
 clear the whole value of the goods." — The British 
 Merchant, p. 23. 
 
 *' If we have at any timeimported from France 
 (for our own consumption) a greater value of 
 goods and merchandises than we exported for 
 the consumption of that country, it is certain, 
 that, one way or other, we paid the balance in 
 money ; and whether we paid this by exporting 
 bullion out of England, or by drawing bullion 
 from other nations indebted to us, into France, 
 the case is the very same; that whole balance 
 was so much loss to this kingdom ; so much we 
 may be said to have lost by our French com- 
 merce." — The British Merchant, p. 54.
 
 APPENDIX, NO. in. 375 
 
 No, III. (Page 193.) 
 
 ** Nous entendons par papiers de credit, toute 
 crSance, ou obligation ; en un mot, toute stipula- 
 tion par ^crit entre un debiteur et un creancier 
 ou porteur de creance, qui oblige celui-la ^ 
 payer, et autorise celui-ci a exiger une valeur, 
 et qui pouvant etre cedee et transport^e, devient 
 un moyen de transporter la propriete, de ces 
 valeurs, d'un possesseur a un autre possesseur, 
 sans transporter les valeurs en nature. 
 
 " On voit que cette definition convienta toua 
 les papiers, billets, actio^ s des banques ; aux 
 creances qui representent des valeurs emprun- 
 tees par les gouvernemens, ou des fonds d'entre- 
 prises de commerce, de finance, &c. et enfin, 
 aux creances m^mes de particulier aparticulier ; 
 telles que les lettres de change, promessesj bill^U^ 
 a ordrCf* &c,
 
 376 
 
 APPENDIX, NO. IV. 
 
 No. IV. (Page 236.) 
 
 COMPUTATION OF INCOME BY MR PITT. 
 
 
 Deduction for 
 
 
 
 
 part under L. 60, 
 
 
 
 ; 
 
 which will pay 
 
 
 
 J 
 
 \nnual Income, i 
 
 iothing,and part Taxable Income.| 
 
 
 
 \ 
 
 mder L. 200, 
 
 
 
 
 1 
 
 »rhich will pay 
 
 
 
 
 
 m average _i_. 
 
 
 
 i.andlorHs' rents, 
 
 L. 
 
 L. 
 
 L. 
 
 
 40,000,000 culti- 
 
 
 
 
 
 vated acres, esti- 
 
 
 
 
 
 mated at 12s. 6d. 
 
 
 
 
 
 per itcre, - - ' 
 
 23,000,000 
 
 J 5,000,000 
 
 20,000,000 
 
 
 Tenants' rents at 
 
 
 
 
 
 fths, 
 
 19,000,000 
 
 1 13,000,000 
 
 6,000,000 
 
 
 Tithes, 
 
 5,000,000 
 
 i 1,000,000 
 
 4,000,000 
 
 
 Mines, navigation, 
 
 
 
 
 
 and timber, 
 
 3,000,000 
 
 
 3,000,000 
 
 
 llouj-es. 
 
 6 000,000 
 
 j- 1,000,000 
 
 5,000,000 
 
 
 Rents on inhabited 
 
 
 
 
 
 houses 4,500,000 
 
 
 
 
 
 Professions, 
 
 2,000,000 
 
 
 2,000,000 
 
 
 Scotland ith of Eng- 
 
 
 
 
 
 land, 
 
 5,000,000 
 
 
 5,000,000 
 
 
 Income from jirofes- 
 
 
 
 
 
 sions beyond sed. 
 
 5,000,000 
 
 
 5,000,000 
 
 
 [nterest on funds 
 
 
 
 
 
 after deducting 
 
 
 
 
 
 sums issued to 
 
 
 
 
 
 Commissioners as 
 
 
 
 
 
 sinking tund, find 
 
 
 
 
 
 interest of capital 
 
 
 
 
 
 redeemed, 
 
 15,000,000 
 
 i 3,000,000 
 
 12,000,000 
 
 
 Profit on foreign 
 
 
 
 
 
 trade, supposed 
 
 
 
 
 
 15 per centum on| 
 
 
 
 
 L.80,000 GOOca. 
 
 
 
 
 
 pita! insured. 
 
 12,000,000 
 
 
 12,000,000 
 
 
 Ditto, home trade 
 
 
 
 
 
 at » 5 per cent. 
 
 18, 000, 000") 
 10.000 000 J 
 
 
 28,000,000 
 
 
 Other trade, 
 
 
 
 
 
 
 102.000.000 

 
 APPENDIX, NO. V. 377 
 
 No. V. (Page 240.) 
 
 The Testament of M. Fortune Bicard, Sfc. tranS' 
 lated from the French by Dr Price. 
 
 *' In the name of God, I Fortune Ricard, 
 
 teacher of arithmetic at D , invoking the 
 
 Holy Virgin, and St. Fortune my patron, do 
 make this my last will as follows :— 
 
 [" The executors, wlio have caused this will 
 *' to be printed, in order to fulfil the intentions 
 " of the late M. Fortune Ricard, do not think 
 ** it necessary to publish those particular be- 
 *' quests which concern only his own family. 
 " After having disposed of his patrimony a- 
 " mong them with wisdom, he proceeds in the 
 *' following manner:"] — 
 
 " It remains for me now to declare my inten- 
 tions with regard to the promise of 500 livres, 
 (L. 22, 4s. 6:\,) subscribed on my behalf by M, 
 P., banker of this town. 1 his sum proceeded, 
 originally from a present which was made me 
 by Prosper Ricard, my much- honoured grand- 
 father, when I entered the eighth year of my 
 age. At ihat age he had taught me the princi-
 
 578 APPENDIX, NO. V. 
 
 pies of writing and calculation. After having 
 shown me, that a capital, with its accumulating 
 interest at 5 per cent., would amount, at the end 
 of one hundred years, to more than one hundred 
 and thirty- one times the original sum ; and, see- 
 ing that I listened to this lecture with the great* 
 est attention, he look 24 livres out of his pocket, 
 and addressed me with an enthusiasm which is 
 still present to my mind. " My child," said he, 
 *' remember, while thou livest, that, with eco- 
 " nomy and calculation, nothing is impossible 
 " for man. Here are 24 livres, which I give 
 *' thee. Take them to a merchant in our neigh- 
 " bourhood, who will place them in trade out of 
 " regard to me. Every year thou shall add ihe 
 " interest to the principal. At thy death, thou 
 " shall employ the produce in good works for 
 *' the repose of thy soul and my own." I have 
 executed this order with fidelity ; and, in the 
 course of my life, I have planned many projects 
 for emplo)'iiig this money. Having reached 
 the seventy-firsl year of my age, it amounts to 
 500 livres ; but, as I must, some lime or other, 
 set bounds to myself, I now desire that it may 
 be divided into five portions, of 100 livres each, 
 to which the interests shall be annually added.
 
 APPENDIX, NO. V. 579 
 
 and the accumulated sums shall be successively 
 applied to the following uses : — 
 
 " 1. In a hundred years, the first sum of 100 
 livres will amount to more than 13,100 livres, 
 (L. 58^22.) From this sum, a prize of 4000 livres 
 shall be given for the best theological disserta- 
 tion, to prove the lawfulness of putting out mo- 
 ney to interest. Three medals, of 600 livres 
 each, shall also be given for the three disserta- 
 tions which shall be adjudged the next in merit 
 to the prize dissertation. The remainder of the 
 13,100 livres shall be expended in printing the 
 prize dissertation, and extracts from the others. 
 Copies of these shall be sent, gratis, to all the 
 bishops, clergy, and confessors of the kingdom. 
 I had intended to have sent them also into fo- 
 reign countries ; but I observe that all the uni- 
 versities of the Christian vi'orld, excepting those 
 of France, have solemnly recognised the lawful- 
 ness of putting money to interest, and that it 
 continues necessary only in this kingdom, to 
 explain a question in morals, so interesting to 
 the welfare of the state. 
 
 " 2. After two hundred years, a second sum 
 of 100 livres, amounting, with its accumulated in- 
 terest, to more than 1700,000 livres, (L, 756,500,)
 
 580 APPENDIX, NO. V. 
 
 shall be employed in establishing a perpetual 
 fund, for fourscore prizes, of 1000 livres each, 
 to be distributed annually by the different aca- 
 demies of the kingdom, as follows: Fifteen prizes 
 for the most distinguished virtuous actions ; fif- 
 teen for works of science and literature ; ten for 
 solutions of questions in arithmetic and calcula- 
 tion ; ten for such new processes in agriculture 
 as shall produce the best crops ; ten for master- 
 pieces in the fine arts ; and ten to encourage 
 races and other exercises, proper to display the 
 force and agility of the body, and to restore 
 amongst us a taste for the gymnasium, which 
 was in such great esteem among the Greeks, and 
 -which formerly made so many heroes. 
 
 " 3. After three hundred years, from another 
 sum of 100 livres, increased in that time to more 
 than two hundred and twenty-six millions, 
 (L. 10,057,000,) there shall be appropriated 
 196 millions, towards estabhshing, in the most 
 considerable places in France, five hundred pa- 
 triotic banks, for lending money without inte- 
 rest ; the largest of which shall have a fund of 
 ten millions of livres, and the smallest a fund of 
 100,000 livres. These banks shall be managed 
 by a committee of the most upright citizens in 
 each place, and the money shall be employed
 
 APPENDIX, NO. V. 581 
 
 in loans, to succour the unfortunate, or advanced 
 towards promoting agriculture, trade, and indus- 
 try. The remaining thirty millions shall be ex- 
 pended in founding twelve museums, in the ci- 
 ties of Paris, Lyons, Rouen, Bourdeaux, Rennes, 
 Lisle, Nancy, Tours, Dijon, Thoulouse, Aix^ and 
 Grenoble. Each of these museums shall be pla- 
 ced at the most agreeable end of the city. Five 
 hundred thousand livres shall be expended upon 
 each building, and in the purchase of grounds 
 which shall belong to them, and be laid out into 
 botanical and fruit gardens, and also into kit- 
 chen gardens, and extensive walks. To each 
 museum shall be annexed an income of 100,000 
 livres ; and there shall be lodged and boarded in 
 it forty literary men, and artists of superior me- 
 rit, who, at the time of meals, shall be divided 
 into four tables, that their repasts may be cheer- 
 ful, without being too noisy. Each museum 
 shall be provided with six secretaries, a de- 
 signer and engraver, and four carriages. There 
 shall be also a hall for concerts, a theatre, a che- 
 mical laboratory, a cabinet of natural history, 
 a hall for experimental philosophy, and a grand 
 gallery for a common library. A hundred thou- 
 sand livres shall be expended on a separate libra- 
 ry for each of these establishments. The same
 
 APPENDIX, NO. V. 
 
 sum shall be employed in providing them with 
 separate cabinets of natural history, and with 
 philosophical instruments. And 10,000 livres 
 shall be reserved annually, for keeping up and 
 increasing these cabinets and philosophical in- 
 struments. 
 
 " The libraries shall always be open to the 
 public. Twenty members of the museum shall 
 be engaged in giving public and gratuitous 
 courses of lectures upon the foreign languages, 
 and upon all the arts and sciences. The other 
 twenty shall be engaged in such other employ- 
 ments as may be most useful. No one shall be 
 admitted a member, till he has previously given 
 proof, not of his rank, descent, or nobility, but 
 of his morals, and of his never having dishonour- 
 ed his pen, by writing against religion and go- 
 vernment, or by sacrificing any member of the 
 community. On being admitted, he shall make 
 oath, " That he will prefer virtue, truth, and 
 *' his country, to every thing; and the general 
 *' good of literature to his own fame." The 
 works of the members of the museum shall be 
 printed at the expence of the establishment, and 
 when those expences are reimbursed, the profits 
 shall belong to the authors. 
 
 " 4. After four hundred years, the fourth sum 
 
 12
 
 APPENDIX, WO. V. 
 
 of 100 livres, amounting, with interest, to near 
 30,000 millions, (L. 1,330,000,000,) shall be em- 
 ployed in building one hundred towns, each con- 
 taining one hundred and fifty thousand souls, 
 in the most agreeable situations which can be 
 found in France. The means of peopling these 
 towns, of governing and making them flourish, 
 are explained in a memorial annexed to this 
 will. In a short time there will result from 
 hence an addition of fifteen millions of inhabi- 
 tants to the kingdom, and its consumption will 
 be doubled ; for which service I hope the eco- 
 nomists will think themselves obliged to me. 
 
 '* I am sensible that all the specie in Europe 
 is not equal to these 30,000 millions, and that it 
 ■will be impossible to make provision in money 
 for such immense sums. For this reason, I leave 
 it to the discretion of my executors to exchange 
 cash at convenient seasons for landed and other 
 real possessions. The revenue arising from those 
 possessions shall either be laid out in cash, or re- 
 alized by further purchases, so that my bequests 
 may be fulfilled in their due time without any 
 difficulty. 
 
 *' I am convinced, by the most accurate cal- 
 culations, that my arrangements, instead of clog- 
 ging, will give activity to the circulation of spe-;
 
 384 APPENDIX, NO. V. 
 
 cie. Laying out the money T have ordered in 
 the purchase of estates, will soon increase their 
 value; and when ihese accu.nulaling riches shall 
 have so produced their effects as that there can 
 no longer be found in Frasice a landholder who 
 will sell his estate, purchasers must be sought for 
 among the neighbouring nations. 
 
 *' 5, Finally, with regard to the last sum of 
 100 livres, amounting nearly, by the accumula- 
 tion of five hundred years, tj four millions of 
 millions of livres, (one hundred and seventy-six 
 thousands of millions Sterling,) it shall be dis- 
 posed of as folio vv^s : 
 
 *' Six thousand millions shall be appropriated 
 towards paying the national debt of France, up- 
 on condition that the Kings, our good Lords and 
 Masters, shall be entreated to order the Comp- 
 trollers General of the Finances to undergo in 
 future an examination in arithmetic before they 
 enter upon their office. 
 
 *' Twelve thousand millions shall likewise be 
 employed in paying the public debts of England. 
 It may be seen, that I reckon that both those na- 
 tional debts will be doubled in this period ; not 
 that 1 have any doubts of the talents of certain 
 ministers to increase them much more; but their 
 operations in this way are opposed by an infini-
 
 APPENDIX, NO. V. 385 
 
 ty of circumstances, which lead me to presume, 
 that those debts cannot be more than doubled. 
 Besides, if they amount to a few thousands of 
 miUions more, I declare that it is my intention 
 that they should be entirely paid off, and that a 
 project so laudable should not remain unexecut- 
 ed for a trifle more or less. I beg that the Eng- 
 lish would not refuse this slight mark of the re- 
 membrance of a man, who was indeed born a 
 Frenchman, but who sincerely esteemed their 
 nation, and always was a particular admirer of 
 that magnificent work which Newton, their 
 countryman, has entitled Universal Arithmetic. 
 I earnestly desire, that, as an acknowledgment 
 for this legacy, the English nation will consent 
 to call the French their neighbours^ and not their 
 natural enemies ; that they may be assured that 
 nature never made man an enemy to man, and 
 that national hatreds, commercial prohibitions, 
 and, above all, wars, cimstanlly produce a mon- 
 strous error in calculations. But I dare not in 
 this instance require anything. We must hope 
 for all we desire from Time ; and when we have 
 the happiness of rendering a service, we must 
 not destroy its value, by annexing conditions to 
 it which may encumber those whom we wish to 
 
 serve. 
 
 Bb
 
 586 APPENDIX, NO. V. 
 
 * 
 
 " Thirty thousand millions shall be formed 
 into a fund, for producing an annual revenue of 
 fifteen hundred millions, to be divided in limes 
 of peace among all the pov^^ers of Europe. In 
 time of war, the share of the aggressor or aggres- 
 sors shall be given to those who have been at- 
 tacked unjustly, in order to engage sovereigns, 
 if possible, to reflect a little before they com- 
 mence unjust hostilities. This revenue shall be 
 distributed among the different nations in pro- 
 portion to their population. Every ten years an 
 exact numeration shall be taken, with a view to 
 this distribution, which shall be made by a diet 
 composed of deputies from all the different na- 
 tions; but I direct that a larger proportion shall 
 be distributed to those sovereigns who shall ap- 
 ply for it, and appear to desire it, with no other 
 view than to encourage population among their 
 subjects. 
 
 '* 1 leave to the wisdom of my executors the 
 care of extending the benefits of this bequest to 
 the other parts of the world ; and if, by this 
 means, they should hope to succeed in extin- 
 guishing, throughout the world, the absurd and 
 barbarous rage of war, I willingly consent that 
 ihey appropriate for this purpose the further 
 sum of one hundred thousand millions. I wish
 
 APPENDIX, NO. V. 387 
 
 that six thousand millions may be offered to. 
 his Majesty the King of France ; namely, a 
 thousand millions to supersede the necessity of 
 lotteries, a sort of tax imposed upon wicked 
 men, which infallibly renders them a great deal 
 more wicked ; a thousand miMions to buy in all 
 useless offices, which are attended with the sad 
 inconvenience of persuading many persons that 
 it is a sufficient discharge of their duty to their 
 country to occupy an office without function, 
 and that an honour may be derived from bear-, 
 ing a senseless title; a thousand millions to buy 
 in offices, which, on the contrary, are too im- 
 portant to be left exposed to the danger of ve- 
 nality ; a thousand millions to purchase a do- 
 main for his Majesty, worthy of his crown, and 
 sufficient for the expences of his Court, so that 
 the nation may clearly perceive, that the taxes 
 imposed upon them are applicable only to the 
 expenditures of the State. The remaining two 
 thousand millions shall form a fund, whose an- 
 nual produce shall be employed by his Majesty 
 in pensions and gratuities. By these means, if, 
 sometimes, those favours should be conferred up- 
 on intriguing and undeserving persons, the na- 
 tion will have no cause to complain of the im»
 
 388 APPENDIX, NO. V. 
 
 proper use of money, drawn from taxes and the 
 labours of the husbandman. 
 
 *' I appoint a thousand milHons towards add- 
 ing a thousand livres to the settled income of all 
 the clergy in the kingdom, and six hundred 
 livres to that of their vicars, upon condition 
 that they no longer demand fees for saying mas- 
 ses. I had also some thoughts of proposing to 
 them the suppression of fees for baptisms, mar- 
 riages, and burials ; but I have considered those 
 functions to be of a civil as well as religious na- 
 ture, and that, on this account, the clergy may, 
 without impropriety, be allowed to receive a 
 pay, which is, in fact, more moderate than 
 would be required by any other public officers 
 in their places. Besides, this pay perhaps ren- 
 ders the service more exact, more speedy on 
 their part, and less irksome to the delicacy of 
 some of those who receive it. 
 
 *' I appoint two thousand millions towards 
 forming an income of ten livres a month to all 
 the children which shall be born in the king- 
 dom, till they are three years of age ; and I de- 
 sire this legacy to be increased to thirty livres a 
 month to those children who shall be nursed 
 by their own mothers. I do not except even the 
 children of the rich ; on the contrary, I invite
 
 APPENDIX, NO. V. • 389 
 
 rich parents to accept this donation without re- 
 luctance, as an honorary prize awarded to pa- 
 ternity and the cares of maternal love. They 
 may, if they please, apply it to acts of charity 
 and benevolence. 
 
 " I appoint four thousand millions towards 
 purchasing the waste lands of the kingdom. 
 These shall be divided into five hundred thou- 
 sand little farms or tenements, of four or five 
 acres each, on which shall be erected as many 
 commodious cottages. These five hundred thou- 
 sand farms shall be given as freeholds to an equal 
 number of married peasants, chosen in each pa- 
 rish by a vestry composed of ten of the most 
 aged inhabitants. The possessors of these free- 
 holds shall be obliged to make them their 
 only residence, to cultivate them with their own 
 hands and those of their families, and to report 
 every year the improvements of them which 
 they have made. These freeholds shall be he- 
 reditary, but only upon condition that they shall 
 neither be divided, nor any two of them engross- 
 ed by one person. When a freeholder dies, 
 without leaving behind him either wife, chil- 
 dren, brothers, sisters, nephews, or nieces, who 
 have lived and laboured with him for three 
 years prior to his decease, the freehold shall be
 
 390 APPENDIX, NO. V. 
 
 declared vacant, and given anew, by the vestry 
 of the parish, to that peasant who shall appear to 
 deserve it best. 
 
 " I desire that two thousand millions be laid 
 out in purchasing all the manors of which there 
 shall be sellers, and that the vassals thereon be 
 for ever afterwards exempted from all servitude 
 and fealty. 
 
 " Six thousand millions shall be employed in 
 founding houses of education in all the country 
 parishes, agreeable to the plan of the author of a 
 work, entitled Patriotic Views respecting the 
 Education of the People. If, in executing this 
 plan of a man of genius, and an excellent citi- 
 zen, it should appear to want some little amend- 
 ments and alterations, I direct that they shall be 
 adopted. 
 
 " I appoint twenty thousand millions towards 
 erecting in the kingdom forty thousand houses of 
 labour, or public workliouses; to each of which 
 shall be appropriated from ten thousand to fifty 
 thousand livres annual income. Every man 
 and woman shall have a right to offer themselves 
 at any time to be maintained and employed in 
 them. I choose to say nothing of any other par- 
 ticulars in the government and management of 
 these houses, hoping that the ideas which begin
 
 APPENDIX, NO. V. 391 
 
 to be formed concerning establishments of this 
 kind, will be perfected before the period fixed 
 for these shall arrive; and that it will at length 
 be universally acknowledged, that though it is 
 dangerous and foolish to give alms in money to 
 a strong beggar, yet that society has no right 
 to deprive him of his liberty, and inflict punish- 
 ments upon him, while it does not hold out to 
 him any other means of subsistence, or at least 
 point out to him a method of discovering what 
 means he is capable of using. 
 
 " I entreat the managers of these public work- 
 houses to give the greatest encouragement to 
 such trades as can be performed by women. 
 This sex, so dear to all sensible minds, has been 
 neglected or oppressed by all our institutions. 
 Seductions of all kinds seem to conspire against 
 their virtue. Necessity precipitates them invo- 
 luntarily into an abyss of infamy and misery. 
 The low price which is set upon the labour of 
 women is out of all proportion to the inferiori- 
 ty of their bodily strength. Let the public 
 work-houses set the example of paying them 
 "better. 
 
 *' There are in France many houses of correc- 
 tion, where the misconduct of women is severe- 
 ly punished, but where, in reality, it is only sus-
 
 392 APPENDIX, NO. V. 
 
 pended, mere confinement having no tendency 
 to eradicate vice. Why should there not be one 
 establishment, where a young woman, conquer- 
 ed by temptation, and on the brink of despair, 
 might present herself, and say, " Vice offers me 
 " gold J I only ask for labour and bread. In com- 
 " passion to my remorse, assist and strengthen 
 " me. Open an asylum for me, where I may 
 " weep without being seen, expiate those faults 
 " which pursue and overwhelm me, and recover 
 " a shadow of peace." Such an institution ex- 
 ists no where. I appoint, therefore, a thousand 
 millions towards establishing one. 
 
 " The snares which are laid by vice for wo- 
 men without fortunes, would make fewer vic- 
 tims if more assistance was given them. We 
 have an infinity of establishments for persons in 
 the higher ranks, of life, which do honour to the 
 generosity of our forefathers. Why have we none 
 for this purpose? I desire, therefore, that two 
 thousand millions be employed in establishing in 
 the kingdom a hundred hospitals, which shall be 
 called Hospitals of Angels. There shall be ad- 
 mitted into each a hundred females, of the age 
 of seven or eight years, and of the most enga- 
 ging forms. They shall receive the most per- 
 fect education in regard to morals, useful know-
 
 APPENDIX, NO. V. 393 
 
 ledge, and agreeable accomplishments. At the 
 age of eighteen they may quit the hospital, in 
 order to be married, at which period they shall 
 each be paid a portion of forty thousand livres. 
 I mention this moderate sum, because it is my 
 wish that they be neither reproached for want 
 of fortune, nor espoused from interest. An an- 
 nual income of two thousand livres shall be given 
 also to their parents, * * * *. Except once 
 in the year, at a solemn and splendid procession, 
 they shall rarely appear in public, but shall be 
 constantly employed in their asylum, in learning 
 all that can render them one day excellent wives 
 and mothers. 
 
 *' In order to fit them, in particular, for do- 
 mestic economy, I desire, that after they have 
 been taught the most accurate ideas of expences 
 of all kinds, questions be proposed to them from 
 time to time, to which they shall be obliged to 
 give answers by word of mouth, and also in writ- 
 ing J as for example : " If you had such and 
 " such an income, under such and such circum- 
 " stances, how much would you appropriate to 
 " your table, yourhouse-rent, your maintenance, 
 " and the education of your children ? How 
 *' many servants would you keep ? How much 
 " would you reserve for sickness and unforeseen
 
 394 APPENDIX, NO. V. 
 
 ** expences ? How much would you consecrate 
 " to the relief of the unfortunate, and the public 
 " good ? If your income depended either en- 
 " tirely or in part upon a transient advantage, 
 " or a place which was not assured to you, How 
 ** much would you expend annually ? What 
 *' sum would you reserve for forming a capital?" 
 &c. &c. Prizes publicly given to the best an- 
 swers to questions of this kind would constitute, 
 in my opinion, an exercise equally engaging, 
 and more useful, than the little comedies and 
 novels with which young persons in the higher 
 stations are generally entertained, 
 
 " The honours conferred upon great men have 
 always appeared to me the most effectual means 
 of producing great men, I appoint, therefore, a 
 thousand millions towards striking medals, and 
 placing in the halls of all towns, or in any other 
 convenient places, statues and busts in honour of 
 such great men as shall hereafter rise up. I de- 
 sire further, that these honours be not paid them 
 till ten years after their decease, and that they 
 be decreed and proportioned by a tribunal, com- 
 posed of such upright, enlightened, and worthy 
 citizens, as shall be most likely not to be dazzled 
 by lalse virtues. It has been once reckoned, 
 that founding hospitals for the sick is one of the
 
 APPENDIX, NO. V. S95 
 
 best public services. For some years, a convic- 
 tion has been gaining ground, that breathing the 
 pestilential air of hospitals doubles the danger of 
 diseases, and that on this, and other accounts, 
 they probably destroy more lives than they save. 
 I desire, therefore, that ten thousand millions be 
 employed in establishing, in each parish of the 
 kingdom, houses of health, in which shall be 
 maintained a physician, a surgeon, and a conve- 
 nient number of sisters of charity, and nurses. 
 These houses shall supply the sick gratis, in their 
 own houses, with every assistance in food and 
 medicine, and none shall be taken to the house 
 of healtii excepting those whom it shall be im- 
 possible to assist at home. 
 
 *' I have hitherto only directed the employ- 
 ment of about two hundred thousand millions. 
 There remain still near four millions of millions, 
 the appropriation of which I leave to the discre- 
 tion of my executors. I wish them to purchase 
 and pull down all such houses as incommode the 
 public way in all towns ; to multiply squares, 
 quays, fountains, gardens, &c. in order to give 
 salubrity to the air of towns ; to empty ponds, 
 to clear heaths ; to deepen the beds of rivers, so 
 as to render them navigable, and to unite them 
 by means of canals. In a word, I wish them to
 
 396 APPENDIX, NO. V. 
 
 co-operate in every possible method with nature, 
 which seems to have designed France to be the 
 most delightful country under heaven. 
 
 *' I hope that all good citizens will assist my 
 executors in the choice of such useful establish- 
 ments as shall yet remain to be formed. I call 
 upon them to publish the ideas with which pa- 
 triotic zeal may inspire them, since now they are 
 encouraged by the consoling certainty, that 
 funds for executing them cannot be wanting. 
 
 *' I name for executors my dearest and best 
 
 friends MM. , 
 
 (Here the testator names six executors, who do 
 not think proper at present to reveal themselves, 
 and then goes on as follows :) 
 
 " I beg of them to meet as often as the affairs 
 of my executorship shall require. In case of an 
 equal division of opinions, the oldest shall have 
 the casting vote. When one of them dies, I de- 
 sire the survivors to fill the vacancy, as soon as 
 may be, with the most honest, zealous, and dis- 
 interested citizen of their acquaintance, and to 
 proceed in this manner for ever. I hope that 
 during the first years of their executorship, when 
 the operations of the fund will be easy, they will 
 transact in this business out of regard to me and 
 to the public. I foresee, that, in process of time, 
 
 6
 
 APPENDIX, NO. V. 397 
 
 the sums to be laid out will become so immense- 
 ly great, as to render necessary voyages and 
 other considerable expences, which will be pro- 
 ductive of no profit. For this reason, I have left 
 one hundred and twenty-five thousand livres of 
 the second sum unappropriated ; of the third, 
 seven hundred and eleven thousand ; and of the 
 fourth, thirty-two millions. These sums I re- 
 quest them to accept, as a compensation for their 
 expences and trouble. I charge them always, 
 as far as they can, without hazarding the secu- 
 rity of the fund, to prefer those ways of laying 
 out the accumulating sums which shall be most 
 serviceable to individuals and the public. 
 
 " If a reduction in the rate of interest, or any 
 unforeseen losses, should injure the fund, so as to 
 retard its increase, the execution of my desires 
 need only be postponed, in proportion to the in- 
 terruption that shall happen. 
 
 ** May the success of these establishments 
 cause one day a few tears to be shed on my 
 grave ! But, above all, may the example of an 
 obscure individual kindle the emulation of pa- 
 triots, princes, and public bodies ; and engage 
 them to give attention to this new, but power- 
 ful and infallible means, of serving posterity.
 
 598 APPENDIX, NO. V. 
 
 and contributing to the future improvement and 
 happiness of the world V* 
 
 Bemark by the Translator. 
 
 It is to be observed, that if M. Ricard had 
 directed the interest of the money to be laid out 
 every three months, it would have wonderfully 
 increased the suras with the disposal of which 
 his executors are entrusted. 
 
 One hundred Jivres will amount, if impro- 
 ved at 5 per cent, interest. 
 
 Paid yearly. Half-yeariy. 
 
 Livres. Livres. 
 
 In 100 years, to 131,501 139,560 
 
 In 500 years, to 3,932,400.000,000 5,29^,100,000,000 
 Paid quarterly. 
 In 100 years, to I'iSjSpO livres. 
 la 500 years, to 6,166,000,000,000 livres. 
 
 If, therefore, the last 100 livres had been 
 improved at 5 per cent, quarterly interest, his 
 executors would have had an additional sum 
 of 2,234,000,000,000 livres, (nearly equal to 
 a hundred thousand millions Sterling,) which 
 is a sum more than sufficient to encompass the 
 
 7
 
 APPENDIX, NO. VI. 399 
 
 earth with a belt of guineas, all close, and five 
 feet broad. 
 
 No. VI. (Page 264.) 
 
 Extract of the Preamble to Cap. LXXI. of the 
 4'2d of the King. .. 
 
 " Whereas the public burdens may at this 
 period be greatly alleviated, and the reduction 
 of the national debt at the same time accelerat- 
 ed, by consolidating the public debt, and the 
 whole of the said debt will thereby be redeemed 
 within forty -Jive years** 
 
 Clause V. of the said Act. 
 
 " And be it further enacted, That all monies 
 whatever which shall be placed from time to 
 time to the account of the said Commissioners, 
 by virtue of either of the said recited acts, (ex- 
 cept so far as the same are hereby repealed,) or 
 by virtue of this act, shall, and are hereby appro- 
 priated to, and shall accumulate in manner di- 
 rected by the said acts, for the reduction of the 
 national debt of Great Britain, and shall be from 
 time to time applied by the said Commissioners^
 
 400 APPENDIX, NO. VI. 
 
 pursuant to the directions, and under and ac- 
 cording to the restrictions and provisions of the 
 said recited acts, either in payment for the re- 
 demption, or in the purchase of the several re- 
 deemable public annuities of Great Britain, un- 
 til the whole of the perpetual redeemable annui- 
 ties, now charged upon the public funds of 
 Great Britain, including such charge as has ari- 
 sen, or may arise, on any loan made in Great Bri- 
 tain, before the passing of this act, and also such 
 charge as shall arise by any annuities, interests, 
 and dividends, payable in consequence of any 
 loans made chargeable on the consolidated fund, 
 by an act passed in this session of Parliament, 
 entituled, A?i Act for repealing the Duties on In- 
 come ; for the effectual Collection of Arrears of 
 the said Duties, and accounting for the same, 
 and for charging the annuities specifically char- 
 ged thereon upon the Consolidated Fund of Great 
 Britain^ shall have been completely redeemed 
 or purchased, so as that the whole of the seve- 
 ral redeemable public annuities now charged 
 upon the public funds of Great Britain, includ- 
 ing such respective charges as aforesaid, shall 
 be paid off within forty-five years from the re- 
 spective periods of the creation of such respective 
 charges and public annuities as aforesaid,"
 
 APPENDIX, NO. VII. 
 
 401 
 
 No. VII. (Page ^265.) 
 
 State MKNT, showing the Sum that must of neces- 
 sity be abstracted from Expenditure, and con- 
 verted into capital, every half-year, by an an- 
 nual Income of L. 5,585,572, accumulated 
 half-yearly, at 3 per cent, for forty-five years. 
 
 Years. 
 
 2,792,786. 
 2,834,677.79 
 
 1 
 
 5,627,46^79 
 2,877> 197956 
 
 H 
 
 8,504,^61. 746 
 2,920,355.926 
 
 2 
 
 11,425,017.672 
 2,964,161.265 
 
 H 
 
 14-,389,17S.->->a7 
 2,008,6 ^.'3.684 
 
 3 
 
 3.053,753.039 
 
 Si 
 
 20,451,005.66 
 :3,099,5J9.334 
 
 
 
 4 
 
 23,551,114.994 
 c 
 
 23,551,114994 
 3,146,05^.724 
 
 4J 26,697,167.718 
 3,193,243,515 
 
 5 29,890,411.233 
 3,241,142 168 
 
 5i 33,131,553.401 
 3,289,759 301 
 
 36,421,312.702 
 3,339,105.690 
 
 H 
 
 39,760,418.392 
 3,389,192.275 
 
 43,149,610.667 
 3,440,030.160 
 
 7i 46,589,640.827 
 
 c c
 
 402 
 
 Years. 
 
 APPENDIX, NO, VII. 
 
 H 
 
 9 
 
 9- 
 10 
 
 loi 
 11 
 
 Hi 
 
 12 
 
 \^ 
 
 13 
 
 l^ 
 
 46,589,640.827 
 3,491,630.612 
 
 50,081,271.459 
 3,544,005 071 
 
 53,625,276.510 
 3,697,166.147 
 
 57,222,441.657 
 3,651,122.624 
 
 60,873,564.281 
 3,705,889.464 
 
 64,579,453.745 
 3,761,477.806 
 
 68,340,931.551 
 3,817,899.973 
 
 72,158,831.524 
 3,875,168.472 
 
 70,033,999996 
 3,933,295.999 
 
 79,967,295.995 
 3.99^^,290.439 
 
 83,959,591.434 
 4,052,179.871 
 
 88,011,771.305 
 4,1 12,962.569 
 
 92,124,733.874 
 4,174,657 008 
 
 14 96,299,390.882 
 
 Years. 
 
 96,299,390.882 
 
 4,237,276.863 
 
 14^ 100,536,667.745 
 4,300,836.016 
 
 15 104,837,501.761 
 
 4,365,348.526 
 
 15J- 109,202,850.287 
 4,430,828.754 
 
 16 113,633,679.041 
 
 4,497,291.185 
 
 16^ 118,130,970.226 
 4,564,750.553 
 
 17 122,695,720.779 
 
 4;633,22 1.811 
 
 17i 127,328,942.590 
 4,702,720.138 
 
 18 13^,031,662.728 
 
 4,773,260.940 
 
 18i 136,804,923.668 
 4,844,859.855 
 
 19 141,649,783.523 
 4,917,532.752 
 
 \% 146,567,316.275 
 4,991,295.744 
 
 20 151,558,612.019 
 5,066,165.180 
 
 20^ 156,624,777.199
 
 Years. 
 
 APPENDIX, NO. VII. 
 Years. 
 
 403 
 
 156,624,777.199 
 5,142,157.657 
 
 21 161,766,934.856 
 
 5,219,290.022 
 
 21i 166,986,224.878 
 5,2p/,579.S73 
 
 22 172,283,804.951 
 
 5,377,043 063 
 
 22^ 177,660,847.314 
 5,457,698.709 
 
 23 183,118,546.023 
 
 5,539,564.190 
 
 23i 18b,6i8,ll0.2l3 
 5,622,657.653 
 
 24 194,280,767.866 
 
 5,706,997.517 
 
 24|- 199,987,765.383 
 5,792,602.480 
 
 25 205,780,367.863 
 
 5,879,491.517 
 
 25^ 211,659,859 380 
 5,967,683.890 
 
 26 217,627,543.270 
 
 6,057,199.149 
 
 26i 223,684,742.419 
 6,148,057.136 
 
 27 229,832,799.555 
 
 229,832,799.555 
 6,240,277.993 
 
 27|- 236,073,077.548 
 6,333,882.163 
 
 28 242,406,959. ni 
 
 6,428,890.395 
 
 28j 248,835,850.106 
 6,^25,323.751 
 
 29 255,361,173.857 
 
 6,623,203.607 
 
 29i 261.984,377.464 
 6,722,551.661 
 
 30 268,706,929.125 
 
 6,823,389.936 
 
 30i 275,530,3 19.061 
 6,925,740.785 
 
 31 28^,456,059.846 
 
 7,029,626.897 
 
 31i 2S9,485,6y6.743 
 7,135,071.301 
 
 32 296,620,758.044 
 
 7,242,097370 
 
 3^ 303,862,8^5.414 
 7,-350,728.83 1 
 
 33 311,213,584.245 
 
 7,460,989.763 
 
 33i 318,674,574.008
 
 404 
 
 Years. 
 
 APPENDIX, NO. VII. 
 
 Years. 
 
 318,674,574.008 
 7,57^2,904.610 
 
 34 326,^247,478 618 
 
 7,686,498.179 
 
 S4J 333.933,976 797 
 7,801,795.651 
 
 35 341,735,772.448 
 
 7,91»,822 586 
 
 35^ 349 654,595.034 
 8,037,604.925 
 
 36 357,692,199.959 
 
 8,15^,168.999 
 
 36J 365,850,368.958 
 8,280,541.534 
 
 37 374,;30,910 492 
 
 8,404,749.657 
 
 37J- 382,535,660.149 
 8,5.30,820.902 
 
 38 39 l,06i),48 1.051 
 
 8,658,783.215 
 
 S8J. 399,725,264.266 
 8,788,664.963 
 
 39 4( *8,5 13,929.^29 
 
 8,^/20,494.938 
 
 417,434,424.167 
 9,054,302.362 
 
 40 426,488,726.529 
 
 9,190,116897 
 
 40J 435,678,843.426 
 5,327,968.651 
 
 41 445,006,812.077 
 
 9,467,888.181 
 
 41i 454,474,700.258 
 9,609,906.503 
 
 42 464,084,606.76 1 
 
 9,754,055.101 
 
 42J- 473,838,661.862 
 9,900,365.927 
 
 43 483,739,027.789 
 
 10,048,871.416 
 
 43i 493,787,899.205 
 10,199,604.488 
 
 44 503,987,503.693 
 10,352,598.555 
 
 39i 417,434,4^24.167 
 * In Appendix. No. VIII. the 
 
 44|- 514,340.102.248 
 10,507,887.533 
 
 45 *524,847,989.781 
 
 annual sum of L, 5,585,572
 
 APPENDIX, NO. VIII. 
 
 405 
 
 No. VIII. (Page ^6Q,) 
 
 Thk following is the Statement of the Re- 
 demption of the National Debt, presented to the 
 House of Commons, 7th April 1802. 
 
 Amount of Stock purchased in forty-five and forty-six years, 
 at the several rates of Interest 3, 3^, 3^, 3|, and 4? per cent, 
 by a Sinking Fund of L. 5,585,572 per annum. 
 
 
 In 45 years. 
 
 In 46 years. 
 
 At par, the consolidated sinking fund 
 
 purchases, 
 Consolidated debt, 7th April 1802, 
 
 £ 
 528,395,000 
 488,987,666 
 
 £ 
 550,059,000 
 488,987,656 
 
 Surplus, ... 
 
 39,407.344 
 
 61,071,344 
 
 At 3j per cent, is purchased, 
 Consolidated debt, 7th April 1802, 
 
 612,737,000 
 488,987 656 
 
 639,020,000 
 488,987,656 
 
 Surplus, - . - 
 
 123,749 844 
 
 150,032 344 
 
 per annum, is stated as amounting in forty-five years, when 
 accumulating at 3 per cent., to L. 528,395,000, This differ- 
 ence is supposed to arise from the calculation delivered into 
 the House of Commons, proceeding on the supposition of a 
 quarterly accumulation.
 
 406 
 
 APPENDIX, NO. VIII. 
 
 
 In 45 years. 
 
 In 46 years. 
 
 At 3^ per cent, is purchased, 
 Consolidated debt, 7th April 1 802, 
 
 £. £. 
 707-220,000 738,720,000 
 488.987.656488,987-656 
 
 Surplus, 
 
 2 1 8,232,344249,732,344 
 
 At 3f pt r cint. IS purchastci. 
 Consolidated debt, 7th April 1802, 
 
 812,395,000 
 488,987,656 
 
 850,370,000 
 488,987,656 
 
 Surplus, 
 
 323,407,344 
 
 361,382,344 
 
 At 4 per cent, is purchased, 
 Consolidated debt, 7th April 1 802, 
 
 930,096,000 
 488,987,656 
 
 975,430,000 
 488,987,656 
 
 Surplus, .... 
 
 441.108,344 
 
 486,442,344
 
 APPENDIX, NO. X. k&f 
 
 No. X. (Page 278.) 
 
 Er/ 3 iy i 7iSTCtiv [movov mxa ruv d^rifMivuv iuf^euvn rd vi/ivo/isva 
 rragd jSatf/Xsw;, dXXd tw ovri )y ridovfj -xoXu 6ia(ps^ei rd ^ rrs 
 ^aaiX;us TQ^TTi^r^i. Kai tSto /mivtoi ourug aj^an ovSsv ri ^sw/tiaffov* 
 wffTEo yb ly ah'k'u Ti-^vsu .a/gt^sooirw? h rtug fiiydXaig <xokim 
 ^ei^fas/jjhsu hffi, xarcc tov cwtov t^-ttov xal rd Taga ^aciXS iffra. 
 rrdki) 2^^i^6vTug ln'nmvrirai, Ev fih yog raug fiix^cug mXseiv 0/ 
 ewTol 'XoiSffi y.Xivbjj, ^u^y, a^or^v, r^d'ffs^ccv [vo'Kkdxig 6* 6 auThg 
 iST@- xjti o/xo6o,aaf, )y dfara luj }^ Srug ixavsg aurhv rgs(p&v 
 i^yohorag Xa/ji,Qdr/]' ddutjolov Iv voXkd re^vuf/iivov avd^wTov 'xdvla. 
 xaXws rroteir) h 3 raug (uydXaig rsoKiSt, hid rb 'iroXXsg iTidgs 
 dete^ai, d^zei }y fiia rndsuj rs'^vri tig ro rgs^eff^/a* 'XoXkdxig 3 ou5* 
 oXri /z/a, dXX' u'Todri/Mala iroiei 6 /ih dvd^eia., 6 jj fuvaiXGia. Ef/ 3 eV^a 
 ;|^ vToBrj/jbala 6fjbhvsv^o^oa<pi)v fj^ovov, r^i(pirai,Q Si, SyjZtiiV 6 3 j^/7fcvaj 
 fiovov QvvTifjbvuv, ^'s yi, ritiriv iSkv rroiuv, d'Akd euvrideig ravra, 
 Avdyxri xv, -f sv ^^,^[jrdruj ^^r£«£ovra £gyw> t5tov )^ aexsa, 
 hir\vayxd(5^at riro rrotm. Th auro 3 rSro <7s-rov^i ly rd df/!,(pi rjjv 
 diaiTav . w /xt'i' ydg 6 auroj xXhriv g^unuQi, r^din^at xogfi,et, 
 (idrlet, o-v|/a aXXors aXXoTa To/af, avayxjj, oTfj,au, riruj ug av 
 sxa?oy Tgop^wg^, isrwg s'^^f 'J'^a 3 'xai/ov e'^yoi/ sv/ t-<^etv x^eu, 
 aXXu) h'KTav, ciXXuj Jjs 'j^Sui/ 'i-^eiv, aXXw hirlav dXX<ft d^ras 
 'jntHv, )y /MTtSi T^rag rra'Jlobcx.VHg, dXXd dgxei dv sv mdog iv'doxifi^v 
 'ira^da^ri' dvdfxrj, oJf/,ai, laura. Sru Trot^fisva, ToXy Si^l^i^vTUi 
 i^et^/da^at 'ixasov. 
 
 Xenophon de Cyri Inst. p. 576. Edit. Hwtch. 
 in 4to.
 
 408 APPENDIX, NO. XI. 
 
 No. XI. (Page 282.) 
 
 *' Nous insisterons particulierement surles res- 
 sources des mechaniques Angloises, parce que 
 cette nation doit, en grande partie, la superio- 
 rity de sa main-d'oiuvre a I'usage de ses mecha- 
 niques, dans toutes les operations ou elles ont 
 semble praticables. En Angleterre, un courant 
 d'eau fait, par son impulsion, agir en meme 
 temps des machines a decarder, a degrossir, et a 
 reduire par degre le coton a la tenuite necessaire 
 pour I'adapter a la filature, dont I'operation se 
 fait par d'autres machines que le meme courant 
 d*eau fait mouvoir. Nous avons appris avec 
 plaisir, que dans la collection des mechaniques 
 faites a Paris, par ordre du Conseil, il en exists 
 une tres-parfaite en ce genre; mais il est tres- 
 pressant de les multiplier et de les mettfe en 
 usage. Cette tentative dispendieuse vient d'etre 
 entreprise a Louviers, avec assez de succes pour 
 ne pas faire regretter les avances qui y ont ete 
 faites J mais quoique cette utile entreprise soit 
 suivie par des negociants et des manufacturiers 
 riches et ^claires, il devient tres- important que 
 le Gouvernement Francois daigne encourager 
 specialement les premiers eiforts de cette indus-
 
 APPENDIX, NO. XI. 409 
 
 Translation. 
 
 " We shall insist principally on the resources 
 the English nation derives from machinery, be- 
 cause that nation owes in a great measure the 
 superiority of its manufactures to the use of ma- 
 chinery in performing every operation in which 
 it can be employed. In England, a small rivu- 
 let sets a-going machines which at once clean, 
 card, and reduce the cotton into a state adapted 
 for sjDinning ; which operation is also performed 
 by other machines, put into motion by the same 
 current of water. We have learnt with pleasure, 
 that in the collection of the machines made at 
 Paris, by order of Council, there is one admira- 
 bly calculated for executing these operations; 
 and it is of the greatest importance, that a num- 
 ber should be made and introduced into use. 
 This very expensive undertaking has been just 
 attempted at Louvier, with sufficient success to 
 leave no room for regretting the expenditure it 
 occasioned. But although, in this instance, this 
 very useful undertaking has been gone into by 
 some rich and enlightened manufacturers, to 
 introduce it generally, it becomes very import- 
 ant that the French Government should special-
 
 410 APPENDIX, NO. XI. 
 
 trie, et se preter aux dispositions necessaires 
 pour en assurer ]e succes. 
 
 " Nous nous reunissons sur cet objet, au voeu 
 du memoire que les interesses ont donne a M. le 
 Controleur-General ; il presente les demandes 
 les mieux motivees, I'instruction la plus satisfai- 
 sante sur cette entreprise, a laquelle ces messieurs 
 ont donn^ leur tenips, leur zele et des fonds assez 
 considerables. 
 
 ^^ Nous ne nous dissimulons pas que nous de- 
 vons repondre aux objections qu'on pourroit 
 faire, d'apres Topinion qui a long tennps regne 
 en France, que plus nos manufactures occupoient 
 d*ouvriers, plus elles ^toient utiles ; que Ton ne 
 devoit pas trop chercher a simplifier les diff^ren- 
 tes operations des fabriques; qu'il ne convenoit 
 pas de faire faire k un seul ce qui pouvoit en 
 faire subsister vingt. Nous ne nous etonnons 
 pas, d'apres ce principe, si on a moins cherche 
 en France qu'en Angleterrei encourager les arts 
 qui pouvoient diminuer le nombre des ouvriers 
 employes h chaque operation ; si m6me on a 
 cherche a les eloigner.
 
 APPENDIX, NO. Xr. 411 
 
 \y encourage the first efforts of this sort of indus- 
 try, and that it should make the necessary ar- 
 rangements for insuring its success. 
 
 " On this subject we must join in enforcing 
 the views contained in a memorial presented by 
 those who are interested in the undertaking, to 
 the Comptroller-General : the requests it con- 
 tains are perfectly well grounded ; and it affords 
 the most satisfactory information on this under- 
 taking, to the conduct of which these gentlemen 
 have given up their time, and in which their 
 zeal has made them embark a very considerable 
 part of their funds. 
 
 *' We do not hide from ourselves, that it may 
 be thought that we ought to answer to the ob- 
 jection usually started on this subject, that it 
 has been an opinion long entertained in France, 
 that the more workmen our manufactories occu- 
 pied, the more they were useful; that it is an 
 error to endeavour to simplify too much the dif- 
 ferent operations in the conduct of a manufac- 
 tory, insomuch as it is a public loss to do by the 
 hand of one an operation in performing which 
 twenty may acquire their livelihood. We are 
 not astonished, considering the prevalence of this 
 opinion, that in France there has been less an- 
 xiety than in England to encourage those de-
 
 412 APPENDIX, NO. XI. 
 
 " Les Anglois ont vu la meme chose d'une 
 maniere absolument opposee ; ils ont pense que 
 dans une nation riche et d*une grande agricul- 
 ture, la main-d'oeuvre devoit etre chere ; que 
 sans une industrie particuliere, leurs manufac- 
 tures ne pourroient lulter avec celles des pays 
 oil I'argent n'est pas si abondant; qu'ils n'avoient 
 d'autre moyen de conserver I'avantage de leur 
 cote, qu'en faisant faire a un seul les operations 
 qui en occupoient plusieurs ; qu'ils craindroient 
 mal-a propos qu'une partie de leurs ouvriers re- 
 stat sans travail, que s'ils pouvoient, en simplifi- 
 ant leurs operations, baisser le prix de leurs etof- 
 fes, ils en augmenteroient infiriiment les de- 
 bouches et la consommation ; qu'enfin le pro- 
 duit le leurs manufactures se consommeroit dans 
 I'etranger, ou dans leur propre pays ; que dans 
 le premier cas, ils n'auroient la preference qu'au- 
 tant qu'ils vendroient a meilleur marche ; que 
 dans le second, ce seroit une injustice de ne pas 
 employer tous les moyens qui pourroient les 
 mettre a portee d'etablir, par leur propre indus-
 
 APPENDIX, NO. XI. 413 
 
 vices which tend to diminisli the number of 
 workmen employed in the conduct of each ope- 
 ration ; nay, we are not surprised that there have 
 even been attempts made to discourage such 
 contrivances. 
 
 " The English nation have taken quite a dif- 
 ferent view of this subject : they have thought, 
 in a rich and flourishing agricultural country, 
 where the vvagesof labour must be dear,that with- 
 out particular contrivances, their manufactures 
 could not come into competition with those of a 
 poorer country ; that they had, therefore, no 
 other means of preserving a superiority, than by 
 contriving to execute the same thing by one 
 hand that used to occupy many ; that it was a 
 foolish ground of apprehension to dread that a 
 part of their workmen would remain without 
 employment; for that by simplifying the process 
 of manufacturing, they lowered the prices of 
 their stuffs, and by that means augmented great- 
 ly the demand for them, and the consumption 
 of them. Finally, as the produce of their manu- 
 factures could only be consumed abroad, or at 
 home ; that, in the first case, they could alone 
 command a preference in the market, by selling 
 at a lower price; and that, in the second, injus- 
 tice they owed to themselves to employ every
 
 414 APPENDIX, NO. XI. 
 
 trie, et sans avoir recours a I'etranger, au prix 
 le plus mod^re possible, les choses agreables, 
 utiles ou necessaires k leurs concitoyens/' — Ob- 
 servations de la Chambre du Commerce de 
 Normandie, sur le Traite de Commerce entre la 
 France et TAngleterre, p. 21. 
 
 " II suffit de connoitre la nature des etablisse- 
 mens de commerce dans ce pays, (Angleterre,) 
 pour sentir tous les avantages qu'ils doivent 
 avoir surceux de France, meme a circonstances 
 egales ; que sera-ce avec tous ceux que leur don- 
 nent leur constitution, la qualite de leurs pro- 
 ductions, la perfection a laquelle ils ont pousse 
 leurs inventions pour ameliorer leurs etoffes et 
 diminuer le prix de la main-d'ceuvre, et enfin 
 Tabondance de leurs capitaux, et le bas prix de 
 I'inter^t de I'argent. 
 
 " On sentira que tous ces avantages les met- 
 tent en etat de fournir leurs marchandises a 
 bien meilleur march^, et de gagner ou il n'y 
 auroit que de la perte pour ceux qui n'en jouis- 
 sent pas, sans que le Gouvernement s*en mele et 
 fasse des sacrifices. C'est sur quoi on entrera 
 dans quelques details-
 
 APrENDIXjNO. XI. 415 
 
 means that could be suggested, of establishing 
 by their own industry, without having recourse 
 to foreigners, the manufacture at the cheapest 
 possible rate, of all those things which are either 
 useful or agreeable to their fellow-citizens."— Ob- 
 servations of the Chamber of Commerce of Nor- 
 mandy on the Commercial Treaty with Eng- 
 land, p. 21. 
 
 ** It is sufficient to be acquainted with the 
 nature of commercial and manufacturing esta- 
 blishments in England, to be convinced of all 
 the advantages which that country must have 
 over France, even without those advantages 
 which they must derive from their Government 
 and constitution, the quality of their produc- 
 tions, the perfection to which they have pushed 
 inventions for ameliorating their manufactures, 
 and diminishing the cost of manufacturing ; and 
 finally, the abundance of their capitals, and the 
 low rate of the interest of money. 
 
 " It is plain, that all these advantages enable 
 England to furnish its merchandise much cheap- 
 er than France, and to gain by selling things at 
 a price that would occasion a loss to a country 
 which did not enjoy the same advantages; so that, 
 unless the Government of France lends assist- 
 ance, and makes sacrifices, there could be no
 
 416 
 
 APPENDIX, NO. XT. 
 
 *' Les etablissemens de tous genres dMndustrie 
 en Angleterre sont tres-considerables, et sont sou- 
 tenus par de tres-gros fonds, parce que leurs en- 
 trepreneurs les solvent depere en fils sans chan- 
 ger d'etat, et que les fonds s'y accumulent, ainsi 
 que les moyens et les talens, &c. ; ce qui les met 
 en etat de travailler en grand, de se pourvoir a 
 Tavance abondarnmeiit et au meilleur marche, 
 des matures premieres, de faire les plus grandes 
 enterprises, et de fournir facilement et prompte- 
 ment aux demandes les plus fortes/'— Seconde 
 Partie du Recueil de divers Memoires relatifs 
 au Traite de Commerce avec I'Angleterre, 
 P 17.
 
 APPENDIX, NO. XI. 417 
 
 competition. On this subject it is necessary to 
 enter into some detail. 
 
 " The establishments for the conduct of all 
 sorts of manufactures in England are on a great 
 scale. They are supported by very large capitals. 
 The manufacturers, from father to son, follow 
 the same profession ; by which means, their 
 funds accumulating, they can carry on very ex- 
 tended operations, provide for themselves the 
 raw materials at the cheapest rates, undertake 
 the most extended commissions, and execute 
 with ease at a moment the largest orders."— 
 The Second Part of the Collection of Me- 
 morials relative to the Treaty with England^ 
 p. 17. 
 
 D d
 
 418 APPENDIX, NO. XII. 
 
 No. XII. (Page 283.) 
 
 ** It seemed a paradox, nay, almost a miracle, 
 to all the world, that you lost a whole continent, 
 containing some millions of constant customers, 
 and yet that you did not experience any consi- 
 derable distress ! Supposing the colonies pur- 
 chased from England to the amount of three 
 millions per annum; Manchester may reason- 
 ably be supposed to have furnished at least one- 
 tenth part of this sum ; and one would think a 
 demand to the amount of three hundred thou- 
 sand pounds a-year could not be lost, without 
 being very sensibly felt in that place and neigh- 
 bourhood. The machines for carding, roving, 
 and spinning cottoia, those ingenious machines 
 that, in a fit of madness, your people have lately 
 destroyed, can alone unfold the mystery. These 
 machines, which ingenuity had long been la- 
 bouring to produce, and which, about this time, 
 were happily brought to a considerable degree 
 of perfection, enabled you to make your goods 
 better and cheaper than usual ; which produced 
 new and extraordinary demands from the conti- 
 nent of Europe, and saved your work-people and
 
 APPENDIX, NO. XII. 419 
 
 manufactories from distress and ruin." — Letters 
 on the Utility and Policy of employing Ma- 
 chines to shorten Labour, p. 9. Published in 1780. 
 ** For the relief of the woollen manufactories, 
 the remedy must, I think, be obvious. Let si- 
 milar machines to those invented in Lancashire 
 but particularly adapted to carding and spinning 
 of wool, be put into the hands of the wool and 
 jersey spinners, &c. ; the consequence of which 
 will be, that the spinners will get three times as 
 much money as they have hitherto been accus- 
 tomed to do ; that they will make much more 
 yarn, much better and much cheaper, and con- 
 sequently that the manufactures will be so ini" 
 proved, and brought to market to so much 
 greater advantage than usual, that the demand 
 will probably increase, even under all our pre- 
 sent difficulties and obstructions ; and if peace 
 should soon be happily established, and the way 
 to foreign markets be made more open and easy, 
 the prospect of improvements, and of the exten- 
 sion of our woollen trade, would become great, 
 and even boundless. 
 
 *' We must change our methods of proceeding 
 with the state of things, which are always chang- 
 ing ; or we must keep within our own island, 
 and resolutely cut off all communication with
 
 420 APPENDIX, NO. xir. 
 
 the rest of the world. We cannot make cheap 
 goods in dear times, and under high taxes, and 
 expensive habits of life, without extraordinary 
 assistance. The competition of Europe is now 
 become rather a contest in skill and ingenuity 
 than in natural strength." — Hints for the Im- 
 provement of the Woollen Manufacture, p. 30. 
 Published in I78O. 
 
 ** The aid that has been given to labour in the 
 cotton manufacture by machinery, is not likely 
 to be applied to the linen manufacture in any 
 great degree. The fly-shuttle and the flax-mill 
 are the principal aids lately acquired by the 
 latter. The ingenuity of Mr Arkwright and 
 others has done much for manufactures ; but the 
 nature of flax makes it difficult to apply to it 
 the cotton-machinery, even to the degree that 
 has been introduced .into the woollen manufac- 
 ture within three or four years, especially in 
 spinning and scribbling/' — Observations on the 
 Manufactures and Trade of Ireland, by Lord 
 Sheffield, p. 65. 
 
 " The surprising advances of chemistry and 
 the effects of its application to manufactures; 
 the wonderful combinations of chemistry and 
 mechanics, for the reduction of labour, — these 
 are the happy means by which bankruptcy has
 
 APPENDIX, NO. xir. 421 
 
 been hitherto averted. The security of proper- 
 ty, and the spirit of hberty diffused through the 
 nation, have called forth the talents of our peo- 
 ple, Britain has grown prosperous in spite of 
 the wretched politics of our rulers. The genius 
 of AVatt, Wedgwood, and Arkwright, has coun- 
 teracted the expence and folly of the American 
 war." — Letters Commercial and Political, by 
 Jasper Wilson, p. 7* 
 
 " The following brief statement will serve to 
 exhibit the rapid progress of the cotton manu- 
 facture, as well as its present importance to the 
 interests of the British Empire: — 
 
 " In the year 1765, cotton, as an article of 
 commerce, was scarcely known in this country. 
 
 *' A few years afterwards, Mr Arkwright 
 obtained his patent for working cotton by ma- 
 chinery. 
 
 *• In 1782, the whole produce of the cotton 
 manufacture did not exceed two millions Ster- 
 ling. 
 
 "In 1801, the import of cotton wool into 
 Britain was forty-two millions of lbs. ; and the 
 estimated value of the cotton manufacture fifteen 
 millions Sterling; such was the rapid increase of 
 this trade to the end of the year 1801. 
 
 " From the documents procured, it appears.
 
 422 APPENDIX, NO. XII. 
 
 that the import of this article in 1802 has not 
 been less than fifty-four millions of lbs.; and 
 the particulars of the trade are as follow : 
 
 " The raw material, when delivered on board 
 the merchant ships, now costs about four mil- 
 lions Sterling, Upwards of thirty thousand tons 
 of shipping, and about two thousand seamen, are 
 constantly employed in bringing the cotton-wool 
 to liiis country, and in exporting the goods ma- 
 nufactured from it. To work the wool into 
 thread, requires a capital in building and ma- 
 chinery, to the amount of nine milHons two 
 hundred and twenty-five thousand pounds ; and 
 those buildings and machinery are chiefly com- 
 posed of bricks, slates, glass, timber, lead, iron, 
 copper, tin, and leather; from most of which, in 
 one shape or other, a considerable duty is col- 
 lected for the support of the State. 
 
 '^ This trade gives employment or support to 
 upwards of eight hundred thousand individuals, 
 and the annual return of the manufacture is 
 nearly as follows : 
 
 " Cost of cotton in the countries v\'here it 
 grows, insurance, freight, other shipping charges 
 and merchants' profit, - - L. 4,725,000 
 
 Carried forward, L. 4,795,000
 
 APPENDIX, NO. XII. 423 
 
 Brought forward, L. 4,725,000 
 '* The interest, at 5 per cent., upon 
 the capital of L. 9,225,000, sunk 
 in building and machinery, with 
 10 per cent, for wear and tear of 
 ditto, - - - - 1,383,750 
 
 " Wages of spinning, value of ma- 
 terials consumed in the process of 
 spinning the cotton into thread, 
 and spinners' profit, - - 5,100,000 
 " Value of materials consumed in 
 subsequent manufactures, manu- 
 facturing wages, interest of capi- 
 tal and profit, - - - 9,000,000 
 
 L. 20,208,750 
 
 Of which sum, at least thirteen millions Sterling 
 are paid iu wages to the natives of Great Bri- 
 tain." — Observations on the Cotton Trade of 
 Great Britain, printed at Glasgow. 
 
 *' Should it be supposed that we have little to 
 fear from foreign competition, it may be justly 
 asked, what is to become of the produce of the 
 cotton-mills now established in France, Prussia, 
 Saxony, and other places upon the continent, 
 where it can easily be proved, this manufacture
 
 424 APPENDIX, NO. XII. 
 
 is now in a more perfect state than it was in this 
 country twenty years ago? It is also well known, 
 that some of these powers are holding out the 
 most flattering inducements to many of our fel- 
 low-subjects, whom they imagine competent to 
 the task, to go and put these establishments upon 
 ^n equal footing with the best in Britain ; and 
 out of so great a number now in the knowledge 
 of this manufacture, it cannot be doubted that 
 many individuals will be tempted by these o('
 
 APPENDIX, NO. XIH, 40.5 
 
 No. XIII. (Page 322.) 
 
 Statement of the population which a farm of 
 504 acres of fertile land will maintain, when 
 under a judicious mode of cultivation, the in- 
 habitants living entirely on vegetable food ; 
 and the numbers which can be supported on 
 animal food by the produce of a like farm 
 \^hen in pasture. 
 
 *' With a view to ascertain this point with as 
 much precision as the nature of the calculation 
 will admit of, I called at the families of several 
 labourers and mechanics in this place, who live 
 entirely on vegetable food, to learn, if possible, 
 the exact amount of their consumption, which I 
 knew, that, out of policy, they are always at 
 pains to exaggerate. In the first house I enter- 
 ed, I luckily found the kettle full of potatoes, 
 just ready to be put upon the fire to be boiled 
 for dinner : the family consisted of one man, his 
 wife, and one child, a remarkable stout boy of 
 eleven years of age. I was informed, they regu- 
 larly dined and supped upon them every day, 
 and that the quantity in the kettle served them 
 for both the meals. I immediately weighed the
 
 426 APPENDIX, NO. XlII. 
 
 potatoes in the kettle, and found that they 
 amounted to nine pounds avoirdupois, and was 
 informed that eight pounds of oatmeal served 
 them for breakfast in pottage a week. The second 
 family I entered was composed of three men, 
 one woman, and six healthy children, three of 
 whom were born at one birth ; this family also 
 dined and supped upon potatoes ; the quantity 
 they had prepared to dress for dinner weighed 
 thirteen pounds, and I was informed it required 
 near four pounds oatmeal each day for their 
 breakfast. After examining the consumption of 
 several families that had two meals of potatoes 
 per day, I found, to my astonishment, that about 
 2| lbs. avoirdupois raw potatoes, and 5^ ounces 
 good oatmeal, when made into pottage, did ac- 
 tually maintain, for one day, in good health and 
 condition for labour, on an average, each indi- 
 vidual of a family, composed of two parents and 
 three children, as long as their stock of potatoes 
 lasted. Having thus ascertained the length 
 which potatoes and oatmeal will go as food, 
 when a vegetable diet only is used, 1 shall pro- 
 ceed to calculate the quantum of population that 
 the farm of 504 English statute acres, fertile 
 land, well cultivated, will maintain, under the 
 following mode of cropping:
 
 APPENDIX, NO. xiir. 427 
 
 Produce, after deducting Seed. 
 
 No. lbs. potatoes. 
 
 I. 84 acres of potatoes, average produce of Lan- 
 
 cashire 250 bushels per acre, at 90 lbs. de- 
 ducting 18 bushels for seed, - - 1,753,920 
 
 II. S-i acres wheat, at 30 bushels per 
 
 acre, at 58 lbs. per bushel, de- 
 ducting 3 lbs. per bushel rough 
 bran, product 2520 bushels of fbs. meal 
 meal, at 55 lbs. per bushel, - 138,600 
 
 III. 84- acres pease and beans, at 24 bu- 
 
 shels, 2016 bushels, one-half eat- 
 en by the horses on the farm ; 
 one.half, 1008 bushels, at 40 lbs. 
 meal per bushel, - - 40,320 
 
 IV. 84 acres barley, at 36 bushels, 3024, 
 
 at 46 lbs. meal per bushel, - 139,104 
 
 lbs. bread. 
 
 Pounds med^ 318,024 or 397,530 
 V. 84 acres clover consumed by cattle. 
 VI. 84 acres oats, at 60 bushels, 5040 bushels, 13,440 peckp 
 of oatmeal, at 8 lbs. per peck; 
 
 504 acres f 1,753,920 lbs. potatoes, at i 
 
 I lbs. per meal to each indi- Meals' 
 I dual, - - - 1,312,940 
 
 26* \ 397,530 lbs. bread, at fib. 
 per meal to ditto, - 530,040 
 
 530 acres 13,440 pecks oatmeal, at 24 
 
 (_ meals per peck to do. - 322,560 
 
 365 days, at 3 meals per day, 1095)2,165,540(1977 
 • Giwden gioimd.
 
 428 APPENDIX, NO. XIII. 
 
 " In this manner, 504 acres of fertile lanrl, the 
 garden ground not included, will maintain, when 
 well cultivated, 1977 people old and young; and 
 if the population of Great Britain amounts to 
 nine millions, it would require only 2,412,746 
 fertile acres, well cultivated, to maintain them 
 when living on the same portions of vege- 
 table food as the common people do in Scot- 
 land. 
 
 " I shall next proceed to inquire into the 
 number of people which the same farm of 504 
 acres, in pasture, would maintain when living 
 entirely on animal food. 
 
 " This branch of rural economy, of determin- 
 ing the quantity of animal food which land 
 will produce, although of considerable import- 
 ance, has never been properly attended to. Mr 
 Young, indeed, has begun the investigation j 
 but as yet it has been confined to ascertain the 
 fattening quality of different animals and vege- 
 tables. Upon consulting several intelligent 
 farmers, it seemed to be their opinion, that an 
 acre of good grass might, in the season, increase 
 the weight of the animals fed upon it twelve 
 stone, at 14 lbs. to the stone; which, at 5s. per 
 stone, would afford a good rent, and leave a 
 
 12
 
 APPENDIX, NO. XIII. 4?9 
 
 handsome allowance for management, and profit 
 on the capital employed. Fixing, therefore, 
 upon twelve stone as the quantum of animal food 
 which an acre of our farm will produce j upon 
 this data, the o04 acres will give 6048 stones, or 
 84,672 lbs. I have not been able to learn what 
 proportion of weight the bones in the carcase of 
 an ox bears to the flesh ; but allowing three 
 quarters of a pound of bones and flesh, on an ave- 
 rage, to a meal for each individual, at 3 meals 
 per day, 84,67^2 lbs. will support an individual 
 37,632 days ; or, in other words, the produce of 
 the farm will support a population of 103 indi- 
 viduals throughout the year ; dividing these into 
 20 families, and allowing one-fourth of an acre 
 of garden ground to each family, it amounts in 
 all to 509 acres. Upon calculating from these 
 data, it will be found, that it would require 
 44,475,728 fertile acres, to maintain the popu- 
 lation of Great Britain, each individual, upon 
 an average, consuming 2^ lbs. of butcher-meat 
 per day ; but the same number of acres would 
 support a population of l6o,92 1,725 individuals 
 of all ages, if the inhabitants lived on the same 
 portions of vegetable food which at present 
 subsist the common labourers in Scotland." —
 
 430 APPENDIX, .NO. XIII. 
 
 (See Mr Mackie's Second Letter to the Edi- 
 tor of Dirom*s Inquiry into the Corn Laws 
 printed as a Supplement to that Work, p. 
 24L 
 
 On the same subject, there is much informa- 
 tion to be found, Chapter II. of Mr Arthur 
 Young's Essay on the conversion of Grass Lands 
 into Tillage, printed in the third volume of 
 Communications to the Board of Agriculture. 
 That the number of the inhabitants of Great 
 Britain nourished on. animal food has great- 
 ly increased is notorious. The proportions 
 therefore of land requisite to furnish a man with 
 animal food and with vegetable food, becomes 
 a question of the greatest importance, and well 
 deserves the further consideration of our writers 
 on agriculture ; for the solution of it will give 
 the best, perhaps the only possible explanation 
 of the extraordinary fact, (stated by the Lords 
 Commissioners of the Council, in their re- 
 port on the Corn Laws and Corn Trade, 1790,) 
 that this country, which, from the year 1746 
 to the year 1765, exported on an average six 
 hundred and fifty-one thousand pounds worth of 
 grain per anmwn, — has not for many years,
 
 APPENDIX, NO. XIII. 4S1 
 
 notwithstanding its great agriculture infiprove- 
 ments, been able to raise a sufficiency for its own 
 inhabitants.
 
 432 APPENDIX, NO. XIV. 
 
 No. XIV. (Page 335.) 
 
 Draperies. 
 
 " Les fabricans Fran9ois de Louviers, Abbe- 
 ville et Sedan, ne craignent point la concurrence 
 de ceux Anglois : ils sont mdme persuades que 
 si ceux-ci trouvoient de la consommation en 
 France, ils en seroient dddommag^s par celles 
 qu*ils trouveroient en Angleterre. Ce seroit de 
 part et d' autre Teffet du caprice des gens riches 
 des deux nations ; ainsi rien a craindre ni a gag- 
 ner sur I'objet des draps fins de la concurrence 
 reciproque. 
 
 *' Les draps communs et les petites draperies 
 donnent lieu a des observations dont les resultats 
 sont bien differens." — (Observations sur le Rd- 
 plique de M. Eden k M. de Rayneval. Recueil 
 de divers Mdmoires, relatifs au Traite de Com- 
 merce avec I'Angleterre, p. 137.) 
 
 " L' Angleterre a les moyens d'etablir, dans 
 lous les marches etrangers,leurs draps ordinaires, 
 et una grande quantity de petites ^toffes de 
 iaines h des prix beaucoup au dessous de celles
 
 APPKNDIX, NO. XIV. 433 
 
 Translation. 
 Woollen Cloths. 
 
 *' The French manufacturers at Louviers, Ab- 
 beville, and Sedan, are not afraid of a competi- 
 tion with those of England ; they are even per- 
 suadedj that, if the latter should find a demand 
 for their goods in France, the French manufac- 
 turers would be indemnified by a demand for 
 theirs in England. In both cases, this would 
 depend on the caprice of opulent persons in the 
 two countries ; so there would be nothing either 
 to fear or to gain from a reciprocal competition 
 respecting superfine cloths. 
 
 " The common and coarse cloths furnish ob- 
 servations of which the result is very different.' 
 —Observations, &c. p. 1 37. 
 
 *' In all the foreign markets, England possesses 
 
 the means of establishing its common cloths, and 
 
 a great quantity of coarse woollen stuffs, at much 
 
 lower prices than those of France. This may be 
 
 E e
 
 434 APPENDIX, NO. XIV. 
 
 de France. C'est ce que Ton a vu constam- 
 ment en Espagne, ou les femmes du peuple 
 sont habillees gen^ralement d'etoffes Angloises ; 
 c'est ce que confirment tous les memoires qu'ont 
 fourni en dernier lieu les Consuls de ce pays; et 
 ceux qu'ont, fourni ceux d'ltalie, presentent ex- 
 actement les memes details, sans que les fa- 
 briques de France puissententrer en concurrence 
 avec les Anglois sur la plupart de ces etofFes." — 
 Ibid, p. !41. 
 
 " Les Anglois sont forces de rendre justice a 
 la beaute des draps de Louviers, ainsi qua ceux 
 d* Abbeville et de Sedan ; ils ne peuvent sedissi- 
 muler qu'ils sont plus doux que les leurs ; et que 
 les couleurs en sont plus vives et plus sedui- 
 santes." — (Observations de la Chambre du Com- 
 merce de Normandie sur le Traite de Commerce 
 entre la France et 1' Angleterre, p. 37.) 
 
 " Nous estimons que, dans les draps ordinaires 
 de cinq quarts de large, et du prix de 15 a l6 
 liv, Taune, les fabriques d'Elbeuf ne pourront 
 soutenir la concurrence des draps de Leeds, ap- 
 pelles draps de Bristol, qui, dans le meme laize, 
 ne coutent pas 11 liv. Tournois I'aune. Les fa- 
 bricants d'Elbeuf ont plus de confiance dans 
 leurs draperies plus fines." — Ibid. p. 41.
 
 APPENDIX, NO. XIV. 435 
 
 constantly seen in Spain, where the women of the 
 lower orders are generally dressed in English 
 stuffs; which is confirmed by the latest memo- 
 rials from the Consuls of that country ; and such 
 as have been furnished by those of Italy exhibit 
 precisely the same details ; the manufactures of 
 France bein^ unable to sustain a competition 
 with those of England respecting the greatest 
 part of those stuffs." — Ibid. p. 141. 
 
 " The English are under the necessity of do- 
 ing justice to the beauty of the broad cloths of 
 Louviers, as well as those of Abbeville and Se- 
 dan ; they must confess that they are softer, and 
 of a more vivid and captivating colour than 
 those of England." — Observations, &c, p. 37. 
 
 *' We reckon, that, as to common cloths, five 
 quarters broad, and of the price of from 15 to 
 l6 livres a-yard, the manufactures of Elbeuf 
 cannot vie with the cloth manufactured at Leeds, 
 that go by the name of Bristol cloths, which, 
 though of the same breadth, do not cost 1 1 livres 
 a-yard. The Elbeuf manufacturers have great- 
 er confidence in their cloths of a finer quality." 
 —Ibid. p. 41.
 
 436 APPENDIX, NO. XIV. 
 
 " Ce sont done les draps de Wiltz et de Glo- 
 cester qui se debitent k Londres, qui pourront 
 entrer en concurrence avec ceux de Louviers; et 
 nous ne doutons pas que le Gouvernement An- 
 glois ne se soit deja occupe des moyens propres k 
 encourager les fabricants de ces draps, a com- 
 battre non seulement en Angleterre, mais jus- 
 qu'eii France meme, la preference a laquelle les 
 draps d'Abbeville, de Sedan, et particulierement 
 ceux de Louviers, peuvent pretendre aujourd'- 
 huu^^Ibid. p. 59. 
 
 " Les draps de Leeds, dits Refoules et a Double 
 Brocbe, obtiendront en general la preference sur 
 ceux de Vire Deja depuis la paix, ces derniers 
 ont perdu leur credit chez les Americains j et 
 il est certain qu'a mesure que la finesse de nos 
 tissus diminue, ou que nos draperies approchent 
 des qualit^s coiDmunes, les draperies d'Angle- 
 terre dnt un avantage sensible syr les notres," 
 
 SoiERIES, 
 
 " Celles de France remportent beaucoup sur 
 celles d'Angleterre, pour le gout j ce qui, joint 
 au bon marcbe, doit donner Tespoir bien fonde 
 fd'en importer beaucoup, si les droits sont sur
 
 APPENDIX, NO. XIV. 437 
 
 " The cloths of Wiltshire and Gloucestershire, 
 which are brought to the London market, are 
 those which will enter into competition with 
 the cloths of Louviers ; and we have no doubt 
 that the English Government have already ta- 
 ken the proper steps for encouraging the manu- 
 factures of those cloths, in order to do away, not 
 only in England, but even in France, the pre- 
 ference to which the cloths of Abbeville, Sedan, 
 and especially of Louviers, have at present pre- 
 tens\ons/' — Ibid. p. 59. 
 
 " The cloths of Leeds, which they call Double 
 Tweeled and Drab, will, in general, be prefer- 
 red to those of Vire. Already, since the peace, 
 these last have lost their credit with the Ame- 
 ricans ; and it is certain, that, in proportion as 
 our stutFs diminish in fineness, orour cloths ap- 
 proach the common qualities, those of England 
 have an obvious advantage over ours." — Ibid, 
 p. 6L 
 
 Silks. 
 
 " Those of France have a decided advantage 
 over those of England in point of taste ; a cir- 
 cumstance which, joined to their cheapness, fur- 
 nishes well-grounded hopes of a large quantity
 
 438 APPENDIX, NO. XIV. 
 
 un pied modere," — (Recueil de Memoires, &c. 
 p. 86.) 
 
 " M. de Rayneval a demaiide, de la part de la 
 France, qu'on fixat les droits. 1. Sur les vins, 
 eaux-de-vie et vinaigres. 2. Sur les soieries et 
 modes. 3. Sur la batiste, linons et autres toiles. 
 4. Sur les glaces. 
 
 " Quant au premier, M. Eden espere qu'il a 
 donne une reponse satisfaisante, pour ce qui est 
 du deuxieme; comme la prohibition en Angle- 
 terre sur les soieries venant de Telranger est ge- 
 ndrale, excepte pour les crepes de soie, et une 
 espece de soie appellee tiffanie,des manufactures 
 d'ltalie, qui peuvent y etre introduites en pay- 
 ant un droit assez considerable, cette prohibition 
 ne peut pas etre abolie pour des raisons assez 
 connues, quoiqu'il y ait plusieurs articles dans la 
 soierie ou I'Angleterre auroitgrandement I'avan- 
 tage sur la France, nommement dans les rubans, 
 peut-etre aussi dans les bas de soie, les gazes, et 
 presque toutes les etofFes melees de soie." — (Re- 
 plique de M. Eden k M. de Rayneval. Jbid. 
 p. 150.) 
 
 ToiLERIES. 
 
 " Celles de Saint Quentin sont les seules de
 
 APPENDIX, NO. XIV. 439 
 
 of that article being imported into England, if 
 the duties are fixed on a moderate footins:." — 
 Collection of Memoirs, &c. p. 86. 
 
 *' M. de Rayneval has demanded, on the part 
 of France, that the duties should be fixed, 1, 
 Upon wines, brandy, and vinegar. 2. Upon 
 silks and millinery goods. 3. Upon cambric, 
 lawns, and other linen cloths. 4. Upon glass. 
 
 " As to the first, Mr Eden hopes he has given 
 a satisfactory answer. With respect to the se- 
 cond ; as in England the prohibition of foreign 
 silks is general, except silken crapes, and a kind 
 of silk called tiffany^ both Italian raanufac» 
 lures, which may be introduced on paying a 
 considerable duty ; that prohibition cannot be 
 abolished for reasons sufficiently known, al- 
 though there are many articles in the silk manu- 
 facture wherein England would have greatly the 
 advantage over France ; in ribbons, for instance, 
 perhaps also in silk stockings, gauzes, and in al- 
 most all stuffs mixed with silk." — Reply, &c. 
 p. 150. 
 
 Linens. 
 
 " Those of St Quintin are the only French
 
 440 APPENDIX, NO. XIV. 
 
 France que TAngleterre soit dans le cas de con- 
 sommer ; elle tire toutes ses autres toiles d'Ir- 
 lande, de la Suisse, de la Flandre, et de I'Alle- 
 magne. 
 
 " II s'est etabli en Ecosse des fabriques de 
 toiles de meme genre que celles de Saint Q,uen- 
 tin ; mais, malgre tous les encouragemens qu'il- 
 les resolvent, elles sont encore fort au-dessous de 
 celles-ci." — (Observations delivrees k M. de Ca- 
 lonne, sur la Note fournie par le Ministre de 
 France. Recueil de Memoires, p. 84.) 
 
 " M. de Rayneval a demande, de la part de 
 la France, qu*on fixatles droits, 3°, sur la batiste, 
 linons et autres toiles."— (R^plique Confiden- 
 tielle, remise par M. Eden k M. de Rayneval. 
 Recueil de Memoires, p. 150.) 
 
 " Quant aux troisieme, c*est a-dire les ba- 
 tistes, linons et les autres toiles M. Eden a ddja 
 repondu a ce qui concerne les toiles, et il croit 
 k la satisfaction des Ministres de sa Majeste Tres- 
 Chretienne. 
 
 " Sa Majeste sera pr^te d'entrer en negociation 
 pour lever les prohibitions sur les batistes et li- 
 nons importees de France, et de reduire les 
 droits a environ 12 ou 15 per cent, ou 6 sh. pour 
 demi piece, k I'entr^e du Royaume aux batistes 
 et linons dej France, principalement aux plus
 
 APPENDIX, NO. XIV. 441 
 
 linens that find consumption in England ; all the 
 rest of her linens are drawn from Ireland, Swit- 
 zerland, Flanders, and Germany. 
 
 , " Linen manufactures of the same kind with 
 those of St Quintin have been established in 
 Scotland; but notwithstanding every encourage- 
 ment given them, they are still far inferior to 
 the manufactures of St Quintin." — Observations, 
 &c. p. 80. 
 
 *' M. de Rayneval has demanded, on the part 
 of France, that the duties should be fixed, 3dly, 
 on cambric, lawns, and other linens." — Confi- 
 dential Keply, &c. p. 1^0. 
 
 *' As to the third article, to wit, cambrics, lawns, 
 and other linens, Mr Eden has already answer- 
 ed as far as concerns linens, and, he believes, to 
 the satisfaction of the Ministers of his Most 
 Christian Majesty, 
 
 " His Majesty will be ready to enter into a 
 negociation for taking off the prohibition on 
 cambrics and lawns imported from France, and 
 to reduce the duty nearly to 1^ or 15 per cent., 
 or 6s. for the half piece, upon the entrance of 
 French cambrics and lawns into the kingdom,
 
 449 APPENDIX, NO. XIV. 
 
 fines, dans lesquelles les Francois excellent prin- 
 cipalement." — Ibid. p. 154. 
 
 Modes. 
 
 *' Le gout qui s'est introduit a Londres pour 
 les modes Francoises, est susceptible de la plus 
 grande augmentation ; il est done tres-interes- 
 sant d'obtenir a I'admission de celles de France, 
 les conditions les plus amples et les plus favo- 
 rables.'* — (Observations delivrees a M. de Ca- 
 lonne, sur la Note fournie par le Ministre de 
 France. Recueil de Memoires, p. 86.) 
 
 " A regard de I'article des modes, que M, de 
 Rayneval range avec celui des soieries, on pense 
 qu'il est a propos de laisser cet article dans la 
 classe de cette multitude d'objets qui seront 
 compris dans la regie generale dont leurs Ma- 
 jestes sont convenues.** — (Replique Confiden- 
 tielie, remise par M. Eden a M. de Rayneval. 
 Recueil de Memoires, p. 152.) 
 
 '* La France ademande I'entree de ses modes; 
 M. Eden renvoie cet article dans la classe des 
 objets generaux, renvoyes a 6tre traites comma 
 la nation la plus favorisee; tournure plus quC 
 suspecte, ne pouvant ignorer que les modes sont 
 
 1
 
 APPENDIX, NO. XIV. 443 
 
 especially on the finest sorts, in which the French 
 chiefly excel," — Ibid. p. 154. 
 
 M 
 
 ILLINERY. 
 
 " The taste that has been introduced in London 
 for French millinery is susceptible of the great- 
 est augmentation ; it is, therefore, of very great 
 consequence to obtain for the admission of ar- 
 ticles of this nature, made in France, the most 
 ample and favourable terms," — Observations de- 
 livered to M. de Calonne, &c. Coll. Mem. 
 p. 86. 
 
 " With regard to the article of millinery, 
 which M. de Rayneval ranks with that of silks, 
 it is thought it would be fittest to leave that ar- 
 ticle to be arranged along with that multitude 
 of objects to be comprised in the general rule on 
 which their Majesties are agreed/'— Confiden- 
 tial Reply of Mr Eden, &c. p. 152. 
 
 " France demanded the liberty to import in- 
 to England millinery goods j Mr Eden wishes 
 to refer that article to the class of general ob- 
 jects; a style of answer more than suspicious, as 
 he cannot be ignorant that millinery is a sort of
 
 44t4t APPENDIX, NO. XIV. 
 
 un genre de commerce qui est particnUer a la 
 France." — (Supplement aux Observations, &c. 
 p. 43.) 
 
 " Le commerce des modes, qui est une 
 branche interessantede celui de la France, et dans 
 laquelle elle reussit si bien par le gout de ses 
 artistes, sembloit devoir ^tre une espece de com- 
 pensation et de dedommagement pour la France; 
 mais I'AngJeterre I'a rendu presque illusoire par 
 les defenses et les restrictions qu'elle met a leur 
 admission.'* — (Sepiieme Memoire. Commerce 
 que la France fait en Angleterre, en consequence 
 du Traile. Recueil, p. 62 ) 
 
 " Malgre le dedain du patriotisme Anglois 
 pour nos modes et nos usages, I'elegance de nos 
 parures eut insensiblement triomphe de la resist- 
 ance nationale, si le Gouvernment Anglois n'en 
 eut pas pr6vu I'ascendant " — (Observations de 
 la Cliambre du Commerce de Normandie, p. 65.) 
 
 Glaces. 
 
 ** Les droits elablis sur celles de France equi- 
 valent a une prohibition. II seroit, sans doute, 
 fort int^ressant dobtenir une moderation qui 
 put donner lieu a une introduction plus forte.**
 
 APPENDIX, NO. XIV. 445 
 
 manufacture peculiar to France." — Supplement 
 to the Observations, &c. p. 43. 
 
 " Millinery, which is an interesting branch 
 of the commerce of France, and in which the 
 taste of her artists enables her to be so successful, 
 seems to be an article which ought to afford a 
 kind of compensation and indemnification for 
 France ; but England has rendered that advan- 
 tage almost nugatory, by the prohibitions and re- 
 strictions she imposes upon its admission."— Se- 
 venth Mem. &c. Coll. p. 62. 
 
 " In spite of the contempt expressed by Eng- 
 lish patriotism for our millinery and articles of 
 fashion, the elegance of our dresses would have 
 triumphed over the resistance the nation made 
 to receive them, it the English Government had 
 not foreseen the advantage we are likely to de- 
 rive from it." — Observations of the Chamber of 
 Commerce of Normandy, p. 65. 
 
 Gla 
 
 ss. 
 
 ** The duties imposed on those of France are 
 equivalent to a prohibition; it would no doubt be 
 of very great consequence to obtain a diminu- 
 tion, which would give a prospect of a greater
 
 446 APPENDIX, NO. XIV. 
 
 — (Observations ddlivrees a M. de Calonne, sur 
 la Note fournie par le Ministre de France. Re- 
 cueil de Memoires, p. 87.) 
 
 " M. de Rayneval a demande, de la part de 
 la France, qu'on fixat les droits, 4°, sur les 
 glaces.""'(RepliqueConfidentielIe, remise par M. 
 Eden a M. de Rayneval. Recueil de Memoires, 
 p. 150.) 
 
 " Quant au quatrieme, pour ce qui concerne 
 les glaces, les Ministres d'Anglelerre pensent 
 qu'il est question tantdes glaces pour les miroirs, 
 que d'autres especes de verres plats ; et ils sont 
 a meme de prendre des informations pour con- 
 stater sMl est possible de fixer un certain droit sur 
 lequel cette marchandise pent ^tre imposee dans 
 Tun et I'autre royaume." — Ibid, p. 156. 
 
 " Pour ce qui regarde les glaces, attendu que 
 les etablissemens de France sont bornes, et ne 
 sont pas susceptibles d'unegrande augmentation, 
 par rapport a la disette des bois, qui deviennent 
 tous les jours plus rares. Mais il n'en seroit 
 peut-etre pas de meme vis-a-vis de I'Angletterre, 
 pour les cristaux, qu'elle seroit dans le cas de 
 fournir a la France, vu la grande superiorite
 
 APPENDIX, NO. XIV. 44? 
 
 quantity being introduced into England." — Ob- 
 servations delivered to M. Calonne, &c. p. 87. 
 
 " M. de Rayneval has demanded, on the part 
 of France, that the duties on importation in 
 England should be fixed, 4thly, on glass."-— 
 Confidential Reply delivered by Mr Eden, p. 
 150. 
 
 " As to the fourth demand, which concerns 
 glass, the English Ministry thinks that it is ne- 
 cessary to take under consideration not only glass 
 in the shape of mirrors, but all other sorts of flat 
 glass ; and they are at present occupying them- 
 selves to get information, that will enable them 
 to ascertain whether it is possible to fix certain 
 rates of duties, under which this sort of mer- 
 chandise may be admitted into the one and the 
 other kingdom." — Ibid. p. 156. 
 
 " As to what regards glass, it must be obser- 
 ved, that the establishments in France are limit- 
 ed, and are not susceptible of great augtnenta- 
 tion, upon account of the deficiency of fuel, 
 which becomes every day more scarce. But 
 this, perhaps, would not be the case with Eng- 
 land, in relation to articles of crystal, with which 
 she would certainly furnish France, considering 
 the great superiority she enjoys in this sort of
 
 448 APPENDIX, NO. XIV. 
 
 qu*elle a dans ce genre d'industrie." — (Observa- 
 tions sur la R^plique, &c. p. 157.) 
 
 PORCELAINE. 
 
 " M. Eden ajoutera ici, que les Ministres de 
 sa Majeste Tres-Chretienne souhaitent peut- 
 etre que la meilleure porcelaine Francois soil 
 admise en Angleterre, sur un droit raisonable: 
 Les Ministres d'Angleterre souhaitent aussi, 
 qu'il soil fait quelque changement sur les droits 
 que la fayence et la poterie devroient payer a 
 la conclusion de ce Traite, en vertu du premier 
 article des deux declarations." — (Replique de 
 M.Eden, p. 156.) 
 
 " Cette derniere insinuation de M. Eden sur 
 la porcelaine, sur la fayence et poterie, donne 
 lieu a quelques reflexions. 
 
 " La porcelaine de France peut etre recherchee 
 en Angleterre. On doute cependant que cet 
 objet d'industrie que est tres cher, et par conse- 
 quent ne peut etre qu'a la portee des gens tres- 
 riches, put donner lieu a une exportation im- 
 portante. 
 
 *' Mais la poterie et la fayence ne sont pas 
 dans ce cas la ; les Anglois ont sur ces deux objets
 
 APPENDIX, NO. XIV. 449 
 
 manufacture." — Observations on the Reply, &c. 
 p. 157. 
 
 China. 
 
 *' Mr Eden must here add, that as the Mini- 
 sters of his Most Christian Majesty may perhaps 
 wish that the fine French china should be ad- 
 mitted into England, on paying a moderate du- 
 ty; so the EngUsh Ministers wish that there 
 should be some change made on the duties which 
 stoneware and coarser sorts of pottery are to 
 pay at the conclusion of this Treaty, in a man- 
 ner consistent with the spirit of the first article 
 of the two declarations." — Reply of Mr Eden, 
 &c. p. 156. 
 
 " This last insinuation of Mr Eden, on the 
 subject of china, stoneware, and pottery, gives 
 rise to some serious reflections. 
 
 *' The china of France may be in high esteem 
 in England. It is a matter of doubt, however, 
 ■whether this article of manufacture, which is 
 very high priced, and which of course can only 
 be sought after by men of great fortune, can be 
 exported to any great extent. 
 
 " But the pottery and stoneware of England 
 are not in the same situation, and the English 
 
 rf
 
 450 APPENDIX, NO. XIV. 
 
 une superiority Hecidee sur les Frani^ois," — 
 (Suite des Observations sur la Replique de M. 
 Eden, p. 1j8,) 
 
 Orf vrerie, Bijouterie, Quincaillerie. 
 
 " On est persuade que la France a I'avantage 
 sur les articles d'orfevrerie et de bijouterie sur 
 I'Angleterre, par le gout et le talent de ses ar- 
 tistes. II est question de savoir s'ils sont sujets, 
 en Angleterre, aux memes droits et aux memes 
 loix qu'en France ; parce que si les droits en 
 France etoient plus forts, et les loix plus genan- 
 tes, il faudroit mettre les Francois de niveau, 
 par une prime proportionee a la sortie et par 
 des modifications sur les loix." — (Observations 
 delivrdes a M. de Calonne, p. 88.) 
 
 *' Pour servir de compensation a ces avanta. 
 ges, qui certainement sont tres-importans, on 
 attend que la France se pr^tera de son c6te a des 
 arrangemens dont la Grande Bretagne puisse 
 profiler a son tour. On espere done que la
 
 APPENDIX, NO. XIV. 4^1 
 
 have on these two articles a most decided supe- 
 riority over the French.'' — S quel of the Ob- 
 servations on the Reply to Mr Eden, p. 158. 
 
 Goldsmiths' ware, Jewellery, and Hard* 
 
 WARE. 
 
 ** There is a general conviction that France 
 has the advantage over Ensjland in articles of 
 goldsmiths* ware and jewellery, in consequence 
 of the taste and talents of her artists. It be- 
 comes, therefore, an interesting circumstance, 
 to learn whether these articles, on exportation, 
 are subject to the same rates and regulations 
 in England as in France ; because, if in France 
 the duties are greater, and the regulations throw 
 more difficulty in the way of exportation, it 
 would be necessary to put the French artists 
 upon an equality, by moderating the restraints 
 of the law, and giving a proportional bounty 
 on exportation." — Observations delivered to M. 
 de Calonne, p. 8S. 
 
 " To serve as a compensation for these ad- 
 vantages, which certainly are very important, it 
 is expected that France, on her side, will adopt 
 arrangements by vvhicli Great Britain may ac- 
 quire similar advantages. For this purpose, it is
 
 452 APPENDIX, NO. XIV. 
 
 quincaillerie, en y comprenant tous les ouvrages 
 d'acier et de fer, sera admise mutuellement en 
 payant des droits moderes." — (Replique de M, 
 Eden, p. 132.) 
 
 *^ L'entree des quincailleries d*Angleterre 
 est d^fendu en France ; elles entrent en contre- 
 bande. L' Angleterre a, sur cet objet d*indu- 
 strie, un avantage infini sur la France, dont les 
 dtablissemens dans ce genre sont si inf6rieurs h. 
 tous egards, qu'ils ne peuvent entrer en compa- 
 raison." — (Observations, &c. p. 133.) 
 
 *' L'Angleterre possede absolument I'objet 
 de quincaillerie; et est depuis long temps en pos- 
 session d'en approvisionner, en contrebande, la 
 France, qui est si arri^ree dans ce genre d'indu- 
 strie, qu'a peine est eile en etat de se suffire pour 
 les objets les plus grossiers," — -(Recherches sur ce 
 qui est relatif aux etofles de Cotton, aux Quincail- 
 leries, &c, Quatri^meMemoire relatif auTraite 
 de Commerce, p. 37.)
 
 APPENDIX, NO. xir. 453 
 
 expected that the hardware, comprehending all 
 works in steel and iron, may be mutually admit- 
 ted by the two countries at a moderate rate of 
 duty/'— -Reply of Mr Eden, p. 132. 
 
 *' The importation of the hardware of Eng- 
 land is prohibited in France. Great quantities of 
 it, however, are smuggled into that country. 
 England has, in the manufacture of those ar- 
 ticles, an infinite advantage over France, whose 
 manufactories of these goods are so far inferior 
 in every respect, that they cannot stand a com- 
 parison." — Observations on the Reply of Mr 
 Eden, p. 133. 
 
 *' England possesses a complete superiority in 
 the manufacture of hardware. For a long time 
 she has been accustomed, by means of smug- 
 gling, to supply France with those articles, 
 who is so far behind hand in this manufacture, 
 that she is scarcely in a condition to supply 
 herself even with the most common and coarse 
 articles." — Research into what relates to the 
 manufactures of Cotton and Hardware. 4th 
 Memoir on the Effects of the Commercial Trea- 
 ty, p. 37.
 
 454 APPENDIX, NO. XV, 
 
 No. XV. (Page 343.) 
 
 ExTRAiT ri'une Lettre de M^. la Marquise de 
 * * a M. * *. Du 17. Aout 1767. 
 
 *' J'ai fait une route superbe jusqu*a Poitiers, 
 par Orleans, Blois, Tours, et Poitiers, ou pour 
 mieux dire, jusqu'aux Ormes de M. d' Argen- 
 son ; car des Orioes a Poitiers, il y a beau coup 
 de terrain qui ne rapporte rien, et depuis Poi- 
 tiers j usque chez moi, il y a vingt-cinq mille 
 arpens de terrein qui ne sont que de la brande 
 et des joncs marins ; les Paysans y vivent de 
 seigle, dont on n'6te pas le son qui est noir et 
 lourd comme du plomb ; dans la Poitou et ici, 
 on ne laboure que V epiderme de la terre avec 
 une petite vilaine charrue sans roues, dont je ne 
 puis vous faire la description, qui oblige riiomme 
 d'etre presque coucbe comme une bete a qua- 
 tre pattes, cela fait pleurer a voir. Chez moi 
 cette affligeante charrue va avec deux boeufs 
 trds doucement, en Poitou elle va avec deux 
 dues. Depuis Poitiers jusqu'a Montmorillon, 
 il y a neuf lieues qui en valent seize de Paris, 
 et je vous jure que je n'ai vu que quatre hommes.
 
 APPENDIX, NO. XV. 455 
 
 Translation. 
 
 Extract of a Letter from the Marchioness of 
 * * to M. * *. Dated lyih August 1767. 
 
 *' I travelled through a fine country to Poi- 
 tiers, by Orleans, Blois, and Tours, to Poitiers, 
 or rather, I may say, till 1 reached the elms of 
 M. Argenson ; for from these elms to Poitiers 
 there is a great deal of ground that carries no- 
 thing, and from Poitiers to my house there are 
 twenty-five thousand acres that carry nothing 
 but brushwood and sea-rushes. The peasantry 
 live on bread made of rye, from which the bran 
 is not abstracted, which is black, and as heavy 
 as lead. In Poitou as well as here, they only 
 scratch the mere surface of the earth with a 
 little nasty plough without wheels, which I can 
 hardly describe to you ; it obhges the man to be 
 almost on all fours when he is working it ; the 
 sight of It makes one miserable. With us this 
 sorry plough is worked with two oxen, and in 
 Poitou with two asses. From Poitiers to Mont. 
 moritlon they count nine leagues, which are 
 equal to bixteen Paris leagues, and I swear te
 
 456 APPENDIX, NOo XV. 
 
 et trois de Montmorillon chez moi, oi^ il y a 
 quatre lieues, encore les avons nous apperifus de 
 loin, car nous n'en avons pas trouve unseul sur 
 le chemin. Vous n'en serez pas etonne dans un 
 tel pays je le suis fort que ces pauvres Metayers 
 ne fuient pas tant de malheurs et de misere, et 
 les Proprietaires sont bien heureux qu'un senti- 
 ment pour le Pays natal, ou poiir mieux dire 
 I'amour conjugal et paternel les emp§che de de- 
 serter, et de finir une vie si dure et si miserable ; 
 on a soin de les marier d'aussi bonne heure que 
 les Grands Seigneurs, le pays n'en est pas plus 
 peuple, carpresque tous les enfans meurent; les 
 femmes n'y ont presque pas de lait, les enfans 
 d'un au mangent de ce pain dont je vous ai 
 parle; aussi une fille de quatre ans a le ventre 
 gros comme une femme enceinte. Si ces bonnes 
 gens devenoient done eclaires, les Proprietaires 
 se trouveroient avec beaucoup de terrein re- 
 duits a mourir de faim, et il ne seroit plus que- 
 stion des impots qui ecrasent ces malheureux. 
 Les seigles ont ete geles cette ann^e le jour de 
 Paques, il y a pen de froment. De douze me- 
 tairies qu'a ma mere, il y en a peut-etre dans 
 quatre. II n'a pas plu depuis Paques, peu de 
 foin, point de paturage, aucun legumes, point 
 de fruit ; voila I'etat du pauvre Paysan, par
 
 APPENDIX, NO. XV, 457 
 
 you, that in all that country I only saw four 
 men; and from Montmorillon to my house, 
 which is four leagues, only three, and those we 
 only saw afar off, for we did not meet one per- 
 son on the road. I do riot know whether you 
 are astonished, I am sure I am very much, that 
 in such a country the poor tenantry do not run 
 away from such a state of misery and misfor- 
 tune. The proprietors are very happy that a pre^ 
 judice in favour of their native soil, or rather 
 the love of their wives and families, prevents 
 them from deserting, or from putting an end to 
 a life of such hardship and misery. They mar- 
 ry as early as their landlords ; but the country is 
 not better peopled on that account; for almost all 
 the children die ; the women have hardly any 
 milk ; the children at one year old eat that black 
 bread of rye I have mentioned ; and a girl of four 
 years old has a belly as big as a woman with 
 child. If these poor people became more en- 
 lightened, the proprietors would find themselves 
 possessing great extent of territory, and reduced 
 to die of hunger ; and taxes, which reduce these 
 people to absolute misery, would be out of the 
 question. The rye was frost-bit this year at 
 Easter, and they have very little wheat. Out of 
 twelve farms which my mother has, there is, per-
 
 458 APPENDIX, NO. XV. 
 
 consequent point d'engrais de bestiaux. La 
 Taille est ici beaucoup plus forte a proportion 
 qu'en Champagne- Tout le monde dit du bien 
 de M, T * * *, mais on sais qu'il n'est pas le 
 maitre de faire tout le bien qu'il dd^ire ; ma 
 mere qui avoit toujours plusieurs de ses greniers 
 pleins, n'y a pas un grain de bled, parceque de- 
 puis deux ans elle nourrit tous ces Metayers et 
 les Pauvres, car elle suit la morale de votre doc- 
 trine, elle donne a manger a ceux qui ont faim, 
 a boire a ceux qni ont soif, pause les blesses, 
 console les affliges, et mene une vie plus douce 
 que les plus grandes Dames delaCour."— (Eph^- 
 merides du Citoyen, 1767, Tome Neuvieme, 
 p. 146.) 
 
 " J*ai parcouru une grande partie des provin- 
 ces de Touraine, de Poitou, du Limosin, de la 
 March, du Berry, de la Xaintonge, de TAngou-
 
 APPENDIX, NO. XY. 459 
 
 haps, a little in four of them. It has not rained 
 since Easter; there is no hay, no pasture, no vege- 
 tables, no fruit ; of course the animals cannot be 
 fattened. Such is the slate of the poor peasant- 
 ry. The poll-tax is higher here than in Cham- 
 paign. All the world speak well of M. Tur- 
 got, but they know he has it not in his power 
 to do all the good he would wish. My mother, 
 who had always several granaries full, has now 
 not a single grain of corn; for during two years 
 she has fed the tenantry and the poor. She, poor 
 woman 1 follows the old maxim, of giving meat 
 to those who are hungry, and drink to those 
 who are thirsty; she takes care of the wounded, 
 comforts the afflicted, and leads a life of greater 
 satisfaction than that of the finest ladies of the 
 Court." — Eph^merides du Ciloyen, 1767, Vol. 
 IX. p. 146. 
 
 Extract from the Apology made for the distinc- 
 tion betwixt the Great and the Little Mode 
 of Cultivation, by M. Butr6, of the Societies 
 of Agriculture of Paris and Orleans. 
 
 " I have gone over a great part of the pro* 
 vinces of Touraine, Poitou, Limosin, Marche, 
 Berry, Xantonge, Angouniois. 1 have measured
 
 460 APPENDIX, NO. ±V. 
 
 mois; j'ai arpente plusieurs Domains, j'ai tir^ 
 des M^moires des autres Provinces, j'ai pris les 
 produits et le prix de plusieurs anndes ; on en 
 verra les resultats dans les articles suivants, et on 
 sera sans doule etonne, que, dans toutes les terres 
 de petite culture, il n'y ait presque aucun prO" 
 duit net; que le Roi soit, maisfort a son ddsavan- 
 tage, le seul proprietaire de plus de la moiti^ 
 des terres de son Royaume. La moisson de ces 
 terres suffit a peine pour la subsistance des Culti- 
 vateurs ; en sorte que ne contribuant point ou 
 tres peu a la nourriture des autres classes d'hom- 
 mes de la Nation, les mauvaises annees sont fort 
 redoubtables en France par la disette, qui s*etend 
 jusqu'aux Colons memes reduits k cette petite 
 culture, d'oii s'en suit, que par rapport a letat^ 
 on peut regarder les terres qui y sont employees 
 a peu pres comme en non valeur; ainsi nous pou- 
 vons en ce sens faire remarquer, qu'il y a dans le 
 Royaume beaucoup plus de terres en friches que 
 Ton ne pense."— (/^^V. p. 9.)
 
 APPENDIX, NO. XV. 46I 
 
 most of the estates in those countries j I have 
 drawn up memorials from the ditierent provin- 
 ces; I made accounts of the produce and the 
 price for several years, and the result will appear 
 from the following articles. It will no doubt ap- 
 pear extraordinary, that from all those estates which 
 are cultivated by poor tenantry, without capi- 
 tal, there is almost no sum to be carried to ac- 
 count after paying the expences and taxes; that 
 the King, very much to his disadvantage, is 
 thus the sole proprietor of half the lands in his 
 kingdom. The produce of these lands being 
 scarcely sufficient to subsist those who cultivate 
 them, can in a manner contribute nothing to the 
 subsistence of the other classes in the kingdom. 
 A bad season must of course afflict France with 
 famine that extends itself to all those who are 
 employed in conducting this sorry species of cul- 
 tivation ; from which it follows, that with re- 
 spect to the State at large, these lands are in 
 a manner of no value, which authorizes us to 
 remark, that there is much more waste land in 
 the kingdom than people think of." — lipid, p. 
 9.
 
 462 APPENDIX, NO. XV. 
 
 Carse of Gowrie. 
 
 ** The Vale orCarse of Gowrie, so much cele. 
 brated for its fertility, merits a particular and 
 separate description, which, however, shall be 
 made as concise as possible. 
 
 *' This valuable tract is situated in the east cor- 
 ner of the county of Perth, and is every where 
 skirted by high hills, except on the south, where 
 it is bounded by the frith and river of Tay, both 
 of which have been long and justly famed for 
 the great numbers of salmon with which they 
 abound. 
 
 *' The Carse of Gowrie, including the sloping 
 lands on the northern boundary, contains about 
 thirty thousand English statute acres. The rent 
 of those farms which have been let within these 
 eight or ten years, may be reckoned at rather 
 above 35?. the English acre. 
 
 " The soil in the vale or plain is a deep rich 
 clay ; on the sides of the hills a hazle-coloured 
 loam most generally prevails. In stating the 
 gross annual produce of the soil, (wliich, it is be- 
 lieved, is equal in quantity and value to any 
 other district of similar extent in Britain, the vi-
 
 APPENDIX, NO. XV. 465 
 
 cinity of large cities or manufacturing towns 
 only excepted,) it may be proper to observe, 
 that the mode of cropping generally approved 
 of, and now for the most part adopted, is, 1. Fal- 
 low ; 2. Wheat; 3. Pease or beans; 4. B.trley 
 with red clover, and a small quantity of rye- 
 grass ; 5. Grass ; and 6. Oats ; and as all the 
 crops are cultivated in equal proportions, the 
 following table will show, not only the average 
 returns, but also the prices at which they have 
 been sold for a number of years bypast ; and 
 may at the same time be depended upon, as be- 
 ing more correct in regard to data than tables of 
 this kind generally are.
 
 464 
 
 APPENDIX, NO. XV. 
 
 " A Table, exhibiting the Extent and Value of the anuuai 
 Gross Produce ct the Carse of Gowrie, supposing it to con- 
 tain 30,000 English Acres, and to be all cultivated agreea- 
 ble to the Rotation above mentioned. 
 
 Rotation 
 and number 
 ' of Acres, 
 
 ^« 
 
 5000 fallow, 
 5000 wheat, 
 5000 peas 
 
 or beans, 
 5000 barley, 
 5000 grass 
 
 which may 
 
 average 
 
 140 stone 
 
 of hay per 
 
 acre, 
 
 5000 oats. 
 Produce of 
 
 orchards, 
 
 30,000 acres 
 
 
 46i 
 
 16,875 
 
 14,375 
 23,750 
 
 29,062i 
 
 43 
 
 27 4 
 21 10 
 
 84,0624 
 
 20 4 
 
 Si 
 
 700,000 
 
 700,000 
 
 7d. 
 
 Value in Mo' 
 ney. 
 
 L. s. d. 
 
 36,281 5 o| 
 
 19,645 16 8 
 
 25,927 1 8 
 
 21,416 13 4 
 29,546 17 O 
 
 1000 O O 
 
 132,817 13 8 
 
 *' By this table, it appears that the annual 
 gross produce of grain in this district may be 
 estimated at upwards of eighty-four thousand 
 "Winchester quarters. But as on many farms ro- 
 tations of cropping are adopted, whereby more 
 than one-sixth part is every year under wheat.
 
 APPENDIX, NO, XV. 465 
 
 it is probable that the value of the crops is ra- 
 ther above than below what is stated. 
 
 " In no part oi the island are more luxuriant 
 crops of red clover to be seen than in the Carse 
 of Gowrie. The second crop is frequently made 
 into hay, and the third is often mown, for the 
 purpose of feeding the horses in the stable, and 
 the cattle in the straw-yards. 
 
 " As the inhabitants of the district do not ex- 
 ceed eight thousand, it is evident that the ex- 
 ports of grain must be very great indeed, Glas- 
 gow is the principal market, though large quan- 
 tities are also sent to London, Leith, and other 
 places on the south-east coast. 
 
 " The size of the farms are in general from 
 one to three hundred acres; but the greatest pro- 
 portion is occupied by farmers who possess up- 
 wards of two hundred acres."
 
 No. IX. 
 
 [ P. 40C. 
 
 aV VCi'OrNT of the TOTAL AMOITNT of tlic NATIONAL DEBT in cncli Vcar, from tlie 1st February 1790 to the Hh .Tnnuary T91« ; utatin)? the Amount 
 of Ucbl cimtraotwl, llio Amount of Debt n-ilecinc<l, ontl uUo the Total Amount of Ilnredccmcd Debt in eacli of tlioHC Years. 
 
 
 GREAT 
 
 BRITAIN. 
 
 IRELAND, 
 funded in Gkeat Britain. 
 
 
 
 Tol«l 
 
 PKHT 
 
 DEIIT wlwmni in 
 
 Total 
 
 ToW 
 
 DEBT 
 
 DEBT 
 
 Total 
 
 
 Amouiil of 
 
 ronunrtnl In Mich 
 
 S|>cHcnli i;!l7|uJil 
 itlT. 
 
 unrclcomcfl 
 
 Amount of 
 
 contracted In each 
 
 rcdeemeil In each 
 
 mnedcemed 
 
 
 UKHT. 
 
 %Mt. 
 
 DKBT. 
 
 DEBT. 
 
 Vciir. 
 
 Vcar. 
 
 DEBT. 
 
 
 (vTi. 
 
 rZi- 
 
 Co. 3. 
 
 Co. <. 
 
 I.o. S. 
 
 Co. 15. 
 
 To. 7. 
 
 '■',. H. 
 
 \monnt »t 1st Aiiinisl - J786 
 
 f «38,-.'.-|,^4S 
 
 
 
 
 
 £ 838,831,218 
 
 
 
 
 
 
 
 
 
 Setvrceu Ut Aug. 1786 and Jsl Feb. 17S7 
 
 S3S,«Jl,-.;iS 
 
 
 
 £ 668,730 
 
 V37,568,498 
 
 
 
 
 
 
 
 
 
 1788 
 
 S38,S3l,'.'l8 
 
 • 
 
 1,456,900 
 
 236,1 11,.598 
 
 
 
 
 
 
 
 
 
 1-Sil 
 
 S38,V3I,»4B 
 
 
 
 1,506,350 
 
 834,60.'>,248 
 
 . 
 
 . 
 
 
 
 
 
 1790 
 
 «38,S31,S48 
 
 ■ 
 
 1,558,850 
 
 833,016,398 
 
 
 
 
 
 
 
 
 
 1791 
 
 *38,t3l,SlS 
 
 
 
 1,587,500 
 
 83l,4.''.ll,898 
 
 
 
 
 
 
 
 
 
 17Pe 
 
 •-'3.S.i3l,24S 
 
 
 
 1,507,100 
 
 829,951,798 
 
 
 
 
 
 
 
 
 
 179.! 
 
 ^.-S,'.'-|,S48 
 
 
 
 1,968,650 
 
 887,989,148 
 
 
 
 
 
 
 
 
 
 17M 
 
 ■.'44,4Sl,.>m 
 
 £ fi,2.S".il00 
 
 «,174,I03 
 
 838,061,743 
 
 
 
 
 
 
 
 
 
 1795 
 
 Sr.0,1. '■7,773 
 
 JA,(;7f.,.i»5 
 
 8,804,945 
 
 844.936,323 
 
 
 
 
 
 
 
 
 
 1796 
 
 31I,Rr.S,47l 
 
 M,70S.d98 
 
 3,0U3,.|.M 
 
 29a,r>r>S, 66 
 
 
 
 
 
 
 
 
 
 1797 
 
 36H,SO'.>,040 
 
 :^l\.9f.,M9 
 
 4,390,670 
 
 346,113,40.'. 
 
 
 
 
 
 
 
 
 
 1798 
 
 394,l39,o4<l 
 
 ■.'.^....HI.OOO 
 
 6,695,585 
 
 364,767,'>80 
 
 £ 2,925,000 
 
 £ 2,985,000 
 
 £15,404 
 
 £ 2,909,596 
 
 1799 
 
 429.7 S3,290 
 
 3j,l'.il,i.50 
 
 7,779,807 
 
 392,612,323 
 
 6,925,000 
 
 4,000,000 
 
 96,530 
 
 6,813,066 
 
 iSOll 
 
 45l.658,«y0 
 
 i.'l,875,<K)0 
 
 80,811,571 
 
 394,i7.'>,752 
 
 18,175,000 
 
 5,850,001) 
 
 130,185 
 
 11,932,881 
 
 1801 
 
 4S(l,7O3,i90 
 
 •J9,n45,000 
 
 10,881,776 
 
 413,038,977 
 
 15,315,000 
 
 3,140,000 
 
 233.360 
 
 14,839,521 
 
 180* 
 
 5Sf..647,(;03 
 
 .')'>.'.'i4,.1l.-| 
 
 9,98S,7S9 
 
 4S9.or.7..1.->I 
 
 : 9,708,750 
 
 4,393,750 
 
 31. ',988 
 
 18,922,343 
 
 180S 
 
 .iC7,<l08,9?8 
 
 3ll,,'55l,375 
 
 8,846,150 
 
 480,572,476 
 
 i2,34S,ooo 
 
 2,639,250 
 
 337,008 
 
 81,124,585 
 
 1804 
 
 583,1108,978 
 
 ir..i)ri(i,nOO 
 
 12,409,854 
 
 48 1,162,682 
 
 2.1,548,000 
 
 3, ,'00,000 
 
 472.856 
 
 23,952,329 
 
 IBOS 
 
 60S,9S.i.79-.' 
 
 20,9li.,M4 
 
 11,951,711 
 
 493,127,786 
 
 33,758,000 
 
 8,1911,000 
 
 579,428 
 
 31,562,901 
 
 1S06 
 
 6*1,7 JS.IOJ 
 
 36,8iC,3ll 
 
 18,673,475 
 
 517,280,561 
 
 38,398,000 
 
 4,660,000 
 
 738,849 
 
 35,484,052 
 
 ■ In lbi« and the foIloniDi; Wars "% 
 Ihe Debt i> shown, after dp. ',.(,. 
 dncliu- Ibe 5 per c.Dts. 1797, ^ ' 
 
 ^ jiaid oli in each Year. J 
 
 
 
 
 
 
 
 
 
 6-o,63e,ia3 
 
 89,880,900 
 
 14,085,017 
 
 533,075,343 
 
 41,718,000 
 
 3,380,000 
 
 807,393 
 
 37,996,659 
 
 
 
 
 
 
 
 
 
 1808 
 
 689,005,303 
 
 18,373.S00 
 
 14,678,717 
 
 536,776,026 
 
 ♦7,139,685 
 
 5,421,623 
 
 907,585 
 
 42,5 10,699 
 
 18i>9 
 
 70i,698,.S5C 
 
 :3fi9.1,8>3 
 
 1 4,728,827 
 
 535,741,052 
 
 50,094,000 
 
 8,954,375 
 
 951.463 
 
 44,513,611 
 
 1810 
 
 72i,975.C78 
 
 <l,«7s,!ii 
 
 15,061,321 
 
 541,957,854 
 
 53,094,000 
 
 3,000,000 
 
 1,013,577 
 
 47,100,034 
 
 I8II 
 
 743,787,785 
 
 r.>,t 11,107 
 
 16,106,263 
 
 545,062,698 
 
 61,874,250 
 
 7,580,851) 
 
 1,135,716 
 
 53,544^568 
 
 Inrlndet Loan IStI, raiwd for") 
 Ir-land, cliargMble on Great JlSlJ 
 BritdiD. \ 
 
 
 
 
 
 
 
 
 
 773,OJ!!,49C 
 
 (.i)«9,w'4t,7ll 
 
 18,682,590 
 
 556,884,819 
 
 61,874,250 
 
 IndutlctliDGr. Britain 
 
 1,356,876 
 
 52,188,292 
 
 
 
 
 
 
 
 
 
 1813 
 
 818,775,527 
 
 40,743.011 
 
 •1,816,457 
 
 .575,811,398 
 
 08,930,850 
 
 7,656,000 
 
 1,567,541 
 
 58,276,751 
 
 1814 
 
 907.495,950 
 
 93,7«0,«3 
 
 24,763,646 
 
 644,168,169 
 
 79,1.30,850 
 
 10,800,000 
 
 1,798,434 
 
 66,678,317 
 
 l»l.^ 
 
 932,a81,«H(l 
 
 V4,7<IX,9MI 
 
 1 9,799,863 
 
 649,074,2 35 
 
 86,472,7.iO 
 
 7,.3^12,500 
 
 1,818,122 
 
 72,208,695 
 
 181C 
 
 1,0U 1,090,282 
 
 70 HUS.Hi 
 
 80,647,188 
 
 699,315 516 
 
 103, i32,7.i0 
 
 16,560,000 
 
 2,316,690 
 
 86,452,005 
 
 1817 
 
 l,0'i6,090,2S2 
 
 3,'iOO,000 
 
 19,546,801 
 
 682,769,314 
 
 103,032,750 
 
 
 
 2,507,101 
 
 83,944,90* 
 
 Great Bnain and tre.) 
 
 l.;ndroii..)liildledliv ;-*illi Jin. lUlu 
 SOCGeo. 11I.P.9S.) 
 
 
 
 
 
 
 
 
 
 1,109,183,032 
 
 
 
 18,512,227 
 
 748,201,991 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 (a) The abr>Te Debt of Irdand is cxclnaive of L.1,900,900 Ifi»li 5 per c»Dl». 
 
 The Snm« in cobinira 3 and 7 iiavc been ridccnied ami i 
 
 
 
 
 payable in England. 
 
 tnii^fcried a\ fullows : 
 
 £ 
 
 
 
 
 By Ihf Sinking l*'iind 
 
 
 328,274,369 
 
 
 
 • By S"tli G-o. III. e. 48. Ibe SinkinR Fund Arronnia Icrniinale nn Ibcilli 
 
 Ijind 'I'ax 
 
 
 25,389,233 
 
 
 
 January in eaeh Year, initead of Ibe l»t Fi-biiiaiy as hcielofure. 
 
 Lite AnniiilieA putcliiiM'd 
 
 - 
 
 4,323,385 
 
 
 
 
 Stuck, the dividends due upon 
 
 wbicli li.ivc ri- ) 
 
 288,037 
 
 
 
 A'<rf<.— The above Roma in colnmm 1, e, and 3, nl^er the year 1806, dffer 
 
 maiiR'il nn 
 
 cUinii d 10 yeaift ai 
 
 lll>:l.>llln d Uitidciu 
 
 d upwarda S 
 
 
 liimns 3 and 7 
 L.360."2 1.010. 
 
 fioni llie Kiinr.r inMli- /loiii Hi.j ortic- on lln- l.iili „f 1 , l„iiaiy lait in 
 
 rurcbustd Willi 
 
 ' 
 
 3ls,(;oo 
 
 f The Slims in c 
 I amount ti) 
 
 
 coiiM q'liiicc of Ihe S per cent*. 1797, paid off, biiii^ included in lib 
 
 
 
 35S,-'.S',02I 
 
 Account. 
 
 per cciiln. 1797 p.tid off 
 
 2,3oS,4l7 
 
 < 'I'br diff.renec aii.«es from 
 
 
 
 
 
 1 Ibe frtirtioii'il parts of a 
 
 
 
 
 ,-t;0,92l,041 
 
 L pound bt'iu): oniitleiL 
 
 
 
 
 
 
 

 
 STATE of the 
 nins at 
 
 I Annual Expence necessarily laid out in the Management of a Farm in the Carse of Gowiie, consisting of 272 Acres ami il t f c v 
 
 July 20, 17cS7. and ending at July '20. 1793 ; the Expence stated being totally unconnected with the Maintenance of the' Farme7and h.s Fam'^' ^^'"" 
 
 Years. 
 
 Rent. 
 
 Seeds of corn 
 anil grass. 
 
 Servants' \V;igcs. 
 
 Meal used. 
 
 Horses' 
 maintenance. 
 
 Smith Work. ' 
 
 Wriglit Work. 
 
 Thresliing 
 mill. 
 
 Saddlery 
 accotmt. 
 
 Lime for 
 manure. 
 
 Ropes 
 bought. 
 
 Petty 
 disbursements. 
 
 Totals of 
 expenditure. 
 
 Farm Servantt. 
 
 Shearers. 
 
 
 Price. 
 
 Iron, 
 nails, &c. 
 
 Smiths' 
 accomits. 
 
 Wood, &c- 
 
 Wrights' 
 accounts. 
 
 1-SS 
 1789 
 1790 
 1791 
 1792 
 1793 
 
 
 L. S. D. 
 
 196 3 6 
 203 2 4 
 237 1 6 
 229 1 1 
 213 11 10 
 253 1 10 
 
 L. s. D. 
 81 10 
 
 77 10 8 
 94 11 8 
 77 19 
 83 10 6 
 72 16 6 
 
 L. S. I'. 
 
 34 14 
 
 36 4 7J 
 40 14 4\ 
 
 37 3 11 
 43 17 
 48 15 2 
 
 B. F. P. 
 
 92 1 
 90 1 3 
 84 3 2 
 89 2 
 78 2 
 75 1 
 
 L. S. D. 
 
 73 l6 
 58 13 6 
 67 12 
 71 12 
 
 62 16 
 
 63 18 9 
 
 L. S. D. 
 
 104 19 3 
 117 1 
 130 9 3 
 137 18 6 
 151 11 
 265 4 10 
 
 L. S. D. 
 
 7 11 6 
 6 16 3i 
 5 14 ll 
 5 9 5 
 11 13 11 
 1 12 4 
 
 L S. D. 
 
 9 17 4^ 
 5 9 5 
 7 17 9 
 9 10 
 9 15 
 18 11 8 
 
 L. S. 1), 
 
 2 7 8 
 
 2 3 6 
 4 19 1 
 
 3 10 7 
 
 8 3 9 
 
 L. S. D. 
 
 8 4 3 
 2 19 8 
 
 9 10 
 6 37 
 
 16 5 4 
 12 7 5 
 
 L. S. 1). 
 
 10 
 10 
 10 
 10 
 10 
 10 
 
 L. S. 11. 
 
 13 5 8 
 
 2 10 
 
 3 17 4 
 1" 10 
 
 
 
 1 9 ■i 
 
 I" S. D. 
 
 37 10 
 40 6 10 
 46 15 8 
 
 none. 
 25 5 
 
 none. 
 
 V. s. D. 
 1 15 
 
 1 4 5 
 
 2 6 3 
 2 2 11 
 2 2 5 
 2 4 9 
 
 L. s. D. 
 31 16 6| 
 
 23 8 10 
 22 7 1 
 
 24 15 2 
 22 14 4 
 31 3 2 
 
 I.. s. D. 
 613 10 9 
 587 2 1 
 683 16 1 
 616 17 5 
 653 2 4 
 789 9 4 
 
 Div. by (S. 
 
 
 1332 2 1 
 
 487 18 4 
 
 241 9 1 
 
 510 3 1 
 
 398 8 3 
 
 907 3 10 
 
 :w 17 7 
 
 61 1 2i 
 
 21 4 7 
 
 56 3 8 
 
 Go 
 
 21 11 
 
 149 17 6 
 
 11 15 9 
 
 156 5 1,1 
 
 ;i91.3 18 
 
 gen. aver. 
 
 
 222 4 1^ 
 
 81 6 4f 
 
 40 4 10 
 
 85 2j., 
 
 66 8 01 
 
 151 4 
 
 6 9 7 
 
 10 3 6^ 
 
 3 10 9 
 
 9 7 3i 
 
 10 
 
 3 11 10 
 
 24 19 6 
 
 1 19 3i 
 
 26 10 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 " As the rent of any particular farm would not apply to the country at large, it was judged proper to avoid slatinir it in this table. 
 
 « The annual expence of the farm, on an average of si.x years, is, by the above state, L, 657, Cs. 4d. exclusive of rent ; and which, divided by 272, the number of acres, gives L. 2, 8s. 4d. as the expence of cul- 
 tivating each acre. 
 
 " The charge made for the maintenance of the farm horses is for corn and hay, which could have been sold at the prices charged. The threshing-mill is charged at L. 10 a-year, which iocludes interest of 
 money and annual repairs. No interest is charged for the money sunk in stocking the farm, which may amount to L. 1500. 
 
 " Petty disbursements comprehend the expence of harvest beer, c-ipcnccs attending the delivery of grain, hiring of servants, and every other charge that can properly apply to the farm.''^View of the Agri- 
 culture of the Carse of Gowrie, by Mr James UoDaldson, p. 38. 
 
 AVERAGE PRODUCE per Acre of each Species of Crop, on a Farm in the C.irse of Gowrie, for Six Years, commencing with Crop 1787, and including Crop 1792 ; 
 
 and also the aveiage Prices at wiiich they were sold in each of these Years. 
 
 Peas and Beans. 
 
 Early Peas. 
 
 Hay. 
 
 Average pro- 
 duce per acre. 
 
 17f7 
 1788 
 1789 
 17"0 
 179! 
 I7!)2 
 
 Average pro- 
 duce per acre. 
 
 Average price 
 per bolL 
 
 Average pro- 
 duce per 
 
 io| 
 
 l)iv.by6.45 2 1 
 
 gen, aver.l 7 2 Ij 
 
 47 2 2J 
 
 F. 
 
 15 5 
 
 18 ()}. 
 
 19 6| 
 
 9 
 
 II 2 
 
 9 1 
 
 II I 
 
 10 
 
 .9 3 2^ 
 
 Average pric 
 per boll. 
 
 Average prO' 
 duce per acre 
 
 14 9 
 12 10 
 15 9 
 
 14 8J 
 15 2 
 16 91 
 
 1 1 
 
 
 
 4 9 Hi 
 
 duce per a 
 
 12 
 10 
 n 14 
 14 
 
 12 
 IS 
 
 none, 
 none, 
 none. 
 
 !0 1 Oi 
 6 3 
 
 Average price 
 per boll. 
 
 Average of 
 
 Average pro- 
 duce per mea- 
 lUred boll. 
 
 Average Average 
 produce price per 
 stone. 
 
 Price same 
 as peas and 
 lieans. 
 14 1 
 12 9 
 IS 6 
 
 
 
 362 3 
 
 3 Ij 
 
 not stated. 
 U 4 
 O 4 
 
 4 2^ 
 
 200 
 100 
 2S6 
 83 
 200 
 187 
 
 Average 
 price per | 
 
 1 7 7J 
 
 1036 
 
 5 6i 
 
 172S 
 
 121i 
 
 20i 
 
 13 
 
 12 
 
 
 
 16 
 
 12 
 
 
 
 26 
 
 12 
 
 
 
 ISj 
 
 12 
 
 
 
 13, 
 
 12 
 
 
 
 34.- 
 
 12 
 
 
 
 " N. B. — It should be remarked here, that the above average return from (he acre, is npon a farm not under a regular rotation of cropping, and therefore the general average of the crops is considerably less than 
 it Trould have been, had the farm been cropped in six parts, as formerly mentioned. 
 
 " The boll of wheat weighs fourteen stone Amsterdam ; barley, eighteen stone ; oats, from fourteen stone (o fourteen stone and a half; and peas and beans, from thirteen to fourteen stone." — 'N lew of the 
 Agricult ure of the Car>ie of Gowrie, by JMr James Donaldson, p. 18. 
 
 Hiinted by c;corge Uanuay and Co. 
 Edinburgh, 181S.
 
 Jcres and that for Six Years, begin. 
 ^i the Farmer and li.s Family. 
 
 icres, gires L. 2, 8s. 4d.as the expence of cul- 
 
 I I
 
 M
 
 la
 
 
 I
 
 M:A 
 
 V 
 
 jt\p 
 
 m'-