Land Rent

Rent, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances of the land. In adjusting the terms of the lease, the landlord endeavours to leave him no greater share of the produce than what is sufficient to keep up the stock from which he furnishes the seed, pays the labour, and purchases and maintains the cattle and other instruments of husbandry, together with the ordinary profits of farming stock in the neighbourhood. This is evidently the smallest share with which the tenant can content himself, without being a loser, and the landlord seldom means to leave him any more. Whatever part of the produce, or, what is the same thing, whatever part of its price, is over and above this share, he naturally endeavours to reserve to himself as the rent of his land, which is evidently the highest the tenant can afford to pay in the actual circumstances of the land. Sometimes, indeed, the liberality, more frequently the ignorance, of the landlord, makes him accept of somewhat less than this portion; and sometimes, too, though more rarely, the ignorance of the tenant makes him undertake to pay somewhat more, or to content himself with somewhat less, than the ordinary profits of farming stock in the neighbourhood. This portion, however, may still be considered as the natural rent of land, or the rent at which it is naturally meant that land should, for the most part, be let.

Rent, as the price paid for the use of land, is naturally the highest amount the tenant can afford to pay, given the land’s actual condition. In setting the lease terms, the landlord tries to leave the tenant only enough of the produce to maintain the tenant’s farming capital. This capital supplies seed, pays for labor, and buys and maintains livestock and other farming equipment. The landlord also leaves the tenant the usual profit on farming capital in the area. This is clearly the smallest share the tenant can accept without taking a loss. The landlord seldom intends to leave the tenant any more. The landlord naturally tries to keep any produce above this share as rent for the land. The same is true of the money received from selling the produce. This rent is clearly the highest amount the tenant can afford to pay, given the land’s actual condition. Sometimes the landlord accepts somewhat less than this amount out of generosity, though more often out of ignorance. Sometimes, though more rarely, the tenant’s ignorance leads the tenant to agree to pay somewhat more. In that case, the tenant settles for somewhat less than the usual profit on farming capital in the area. The amount described above may still be regarded as the natural rent of land. It is the rent for which land is naturally meant, for the most part, to be leased.

The rent of land, it may be thought, is frequently no more than a reasonable profit or interest for the stock laid out by the landlord upon its improvement. This, no doubt, may be partly the case upon some occasions; for it can scarce ever be more than partly the case. The landlord demands a rent even for unimproved land, and the supposed interest or profit upon the expense of improvement is generally an addition to this original rent. Those improvements, besides, are not always made by the stock of the landlord, but sometimes by that of the tenant. When the lease comes to be renewed, however, the landlord commonly demands the same augmentation of rent as if they had been all made by his own.

It might be thought that land rent is often no more than a reasonable profit or interest on the landlord’s investment in improvements. This may sometimes be partly true, but it can hardly ever be more than partly true. The landlord demands rent even for unimproved land. The supposed interest or profit on the cost of improvements is generally added to this original rent. Besides, the landlord does not always pay for the improvements. Sometimes the tenant pays for them. Yet when the lease is renewed, the landlord commonly demands the same rent increase as if he had paid for all the improvements himself.

He sometimes demands rent for what is altogether incapable of human improvements. Kelp is a species of sea-weed, which, when burnt, yields an alkaline salt, useful for making glass, soap, and for several other purposes. It grows in several parts of Great Britain, particularly in Scotland, upon such rocks only as lie within the high-water mark, which are twice every day covered with the sea, and of which the produce, therefore, was never augmented by human industry. The landlord, however, whose estate is bounded by a kelp shore of this kind, demands a rent for it as much as for his corn-fields.

He sometimes demands rent for land that humans cannot improve at all. Kelp is a kind of seaweed that produces an alkaline salt when burned. This salt is useful for making glass and soap, among other things. Kelp grows in several parts of Great Britain, particularly in Scotland. It grows only on rocks below the high-water mark, which the sea covers twice a day. Human labor has therefore never increased the kelp they produce. Yet a landlord whose estate borders such a kelp shore demands rent for it, just as he does for his cornfields.

The sea in the neighbourhood of the islands of Shetland is more than commonly abundant in fish, which makes a great part of the subsistence of their inhabitants. But, in order to profit by the produce of the water, they must have a habitation upon the neighbouring land. The rent of the landlord is in proportion, not to what the farmer can make by the land, but to what he can make both by the land and the water. It is partly paid in sea-fish; and one of the very few instances in which rent makes a part of the price of that commodity, is to be found in that country.

The sea around the islands of Shetland is unusually rich in fish, which provide much of the inhabitants’ food. But to benefit from the fish, the inhabitants must have homes on the nearby land. The landlord’s rent depends on what the farmer can earn from both the land and the sea, not just the land. The rent is partly paid in sea fish. Shetland is one of the very few places where rent forms part of the price of sea fish.

The rent of land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take, but to what the farmer can afford to give.

Therefore, rent, as the price paid for the use of land, is naturally a monopoly price. It is not based on what the landlord may have spent improving the land or what he can afford to accept. Instead, it is based on what the farmer can afford to pay.

Such parts only of the produce of land can commonly be brought to market, of which the ordinary price is sufficient to replace the stock which must be employed in bringing them thither, together with its ordinary profits. If the ordinary price is more than this, the surplus part of it will naturally go to the rent of the land. If it is not more, though the commodity may be brought to market, it can afford no rent to the landlord. Whether the price is, or is not more, depends upon the demand.

Usually, produce from the land can be brought to market only if its ordinary price covers the capital needed to bring it there, along with the ordinary profits on that capital. If the ordinary price is higher than this, the surplus will naturally go toward rent for the land. If the price is no higher, the produce may still be brought to market, but it cannot provide rent for the landlord. Whether the price is higher depends on demand.

There are some parts of the produce of land, for which the demand must always be such as to afford a greater price than what is sufficient to bring them to market; and there are others for which it either may or may not be such as to afford this greater price. The former must always afford a rent to the landlord. The latter sometimes may and sometimes may not, according to different circumstances.

Demand for some products of the land must always be high enough to bring a price above the cost of bringing them to market. For other products, demand may or may not be high enough to bring this higher price. The first group must always provide rent for the landlord. The second group may or may not provide rent, depending on the circumstances.

Rent, it is to be observed, therefore, enters into the composition of the price of commodities in a different way from wages and profit. High or low wages and profit are the causes of high or low price; high or low rent is the effect of it. It is because high or low wages and profit must be paid, in order to bring a particular commodity to market, that its price is high or low. But it is because its price is high or low, a great deal more, or very little more, or no more, than what is sufficient to pay those wages and profit, that it affords a high rent, or a low rent, or no rent at all.

Rent, then, affects the price of goods differently from wages and profit. High or low wages and profit cause high or low prices. High or low rent is the result of those prices. The price of a particular good is high or low because of the wages and profit needed to bring it to market. But the rent depends on how much the price exceeds what is needed to pay those wages and profit. If the price is much higher, the rent is high. If it is only slightly higher, the rent is low. If it is no higher, there is no rent at all.

The particular consideration, first, of those parts of the produce of land which always afford some rent; secondly, of those which sometimes may and sometimes may not afford rent; and, thirdly, of the variations which, in the different periods of improvement, naturally take place in the relative value of those two different sorts of rude produce, when compared both with one another and with manufactured commodities, will divide this chapter into three parts.

This chapter has three parts. The first considers products of the land that always yield some rent. The second considers those that sometimes yield rent and sometimes do not. The third considers how the relative value of these two kinds of raw produce naturally changes at different stages of improvement. It compares their values with each other and with those of manufactured goods.

As men, like all other animals, naturally multiply in proportion to the means of their subsistence, food is always more or less in demand. It can always purchase or command a greater or smaller quantity of labour, and somebody can always be found who is willing to do something in order to obtain it. The quantity of labour, indeed, which it can purchase, is not always equal to what it could maintain, if managed in the most economical manner, on account of the high wages which are sometimes given to labour; but it can always purchase such a quantity of labour as it can maintain, according to the rate at which that sort of labour is commonly maintained in the neighbourhood.

People, like all other animals, naturally multiply according to their means of survival. Food is therefore always in demand to some degree. It can always buy a greater or smaller amount of labor. Someone can always be found who is willing to do something to obtain food. Sometimes wages are high, so food cannot always buy as much labor as it could support if used most economically. But it can always buy as much labor as it can support at the usual local rate for that kind of work.

But land, in almost any situation, produces a greater quantity of food than what is sufficient to maintain all the labour necessary for bringing it to market, in the most liberal way in which that labour is ever maintained. The surplus, too, is always more than sufficient to replace the stock which employed that labour, together with its profits. Something, therefore, always remains for a rent to the landlord.

But land, in almost any location, produces more food than is needed to support all the workers who bring it to market. This is true even when those workers are supported as generously as workers ever are. The surplus is also always more than enough to replace the capital used to employ those workers and provide a profit. Something, therefore, always remains for the landlord as rent.

The most desert moors in Norway and Scotland produce some sort of pasture for cattle, of which the milk and the increase are always more than sufficient, not only to maintain all the labour necessary for tending them, and to pay the ordinary profit to the farmer or the owner of the herd or flock, but to afford some small rent to the landlord. The rent increases in proportion to the goodness of the pasture. The same extent of ground not only maintains a greater number of cattle, but as they are brought within a smaller compass, less labour becomes requisite to tend them, and to collect their produce. The landlord gains both ways; by the increase of the produce, and by the diminution of the labour which must be maintained out of it.

Even the most barren moors in Norway and Scotland provide some pasture for cattle. Their milk and offspring are always more than enough to support all the labor needed to tend them. They also provide the usual profit for the farmer or herd owner, and leave a small rent for the landlord. Rent increases with the quality of the pasture. The same area of better pasture supports more cattle. Because the cattle are kept closer together, less labor is needed to tend them and collect what they produce. The landlord gains in both ways: from the increase in produce and from the reduction in labor that the produce must support.

The rent of land not only varies with its fertility, whatever be its produce, but with its situation, whatever be its fertility. Land in the neighbourhood of a town gives a greater rent than land equally fertile in a distant part of the country. Though it may cost no more labour to cultivate the one than the other, it must always cost more to bring the produce of the distant land to market. A greater quantity of labour, therefore, must be maintained out of it; and the surplus, from which are drawn both the profit of the farmer and the rent of the landlord, must be diminished. But in remote parts of the country, the rate of profit, as has already been shewn, is generally higher than in the neighbourhood of a large town. A smaller proportion of this diminished surplus, therefore, must belong to the landlord.

The rent of land varies with its fertility, whatever it produces. It also varies with its location, whatever its fertility. Land near a town commands a higher rent than equally fertile land in a distant part of the country. Both may cost the same amount of labor to cultivate. But it always costs more to bring produce from distant land to market. More labor must therefore be paid for from that produce. This reduces the surplus from which both the farmer’s profit and the landlord’s rent are drawn. But, as already shown, the rate of profit is generally higher in remote areas than near a large town. The landlord must therefore receive a smaller share of this reduced surplus.

Good roads, canals, and navigable rivers, by diminishing the expense of carriage, put the remote parts of the country more nearly upon a level with those in the neighbourhood of the town. They are upon that account the greatest of all improvements. They encourage the cultivation of the remote, which must always be the most extensive circle of the country. They are advantageous to the town by breaking down the monopoly of the country in its neighbourhood. They are advantageous even to that part of the country. Though they introduce some rival commodities into the old market, they open many new markets to its produce. Monopoly, besides, is a great enemy to good management, which can never be universally established, but in consequence of that free and universal competition which forces every body to have recourse to it for the sake of self defence. It is not more than fifty years ago, that some of the counties in the neighbourhood of London petitioned the parliament against the extension of the turnpike roads into the remoter counties. Those remoter counties, they pretended, from the cheapness of labour, would be able to sell their grass and corn cheaper in the London market than themselves, and would thereby reduce their rents, and ruin their cultivation. Their rents, however, have risen, and their cultivation has been improved since that time.

Good roads, canals, and navigable rivers reduce the cost of transportation. They bring remote parts of the country closer to the level of those near the town. For this reason, they are the greatest of all improvements. They encourage farming in remote areas, which must always make up the largest part of the country. They benefit the town by breaking the monopoly of the countryside nearby. They benefit even that nearby countryside. Though they bring competing goods into its old market, they open many new markets to its produce. Besides, monopoly is a great enemy of good management. Good management can never become universal except through free and universal competition. Such competition forces everyone to manage well in self-defense. Not more than fifty years ago, some counties near London petitioned Parliament against extending turnpike roads into more distant counties. They claimed that cheap labor would let those distant counties sell grass and grain more cheaply in the London market. This, they claimed, would reduce their rents and ruin their farming. Their rents, however, have risen, and their farming has improved since then.

A corn field of moderate fertility produces a much greater quantity of food for man, than the best pasture of equal extent. Though its cultivation requires much more labour, yet the surplus which remains after replacing the seed and maintaining all that labour, is likewise much greater. If a pound of butcher’s meat, therefore, was never supposed to be worth more than a pound of bread, this greater surplus would everywhere be of greater value and constitute a greater fund, both for the profit of the farmer and the rent of the landlord. It seems to have done so universally in the rude beginnings of agriculture.

A field of grain with moderately fertile soil produces much more food for people than the best pasture of the same size. Growing grain requires much more labor. But even after replacing the seed and feeding all the workers, the surplus is much greater. Suppose, then, that a pound of meat was never thought to be worth more than a pound of bread. The greater surplus from grain would be more valuable everywhere. It would provide more for both the farmer’s profit and the landlord’s rent. This seems to have been true everywhere in the early stages of agriculture.

But the relative values of those two different species of food, bread and butcher’s meat, are very different in the different periods of agriculture. In its rude beginnings, the unimproved wilds, which then occupy the far greater part of the country, are all abandoned to cattle. There is more butcher’s meat than bread; and bread, therefore, is the food for which there is the greatest competition, and which consequently brings the greatest price. At Buenos Ayres, we are told by Ulloa, four reals, one-and-twenty pence halfpenny sterling, was, forty or fifty years ago, the ordinary price of an ox, chosen from a herd of two or three hundred. He says nothing of the price of bread, probably because he found nothing remarkable about it. An ox there, he says, costs little more than the labour of catching him. But corn can nowhere be raised without a great deal of labour; and in a country which lies upon the river Plate, at that time the direct road from Europe to the silver mines of Potosi, the money-price of labour could be very cheap. It is otherwise when cultivation is extended over the greater part of the country. There is then more bread than butcher’s meat. The competition changes its direction, and the price of butcher’s meat becomes greater than the price of bread.

The relative values of bread and meat vary greatly at different stages of agriculture. In its early stages, wild, uncultivated land covers most of the country. All of it is left to cattle. There is more meat than bread, so people compete more for bread. As a result, bread brings the higher price. According to Ulloa, an ox in Buenos Ayres usually cost four reals, or twenty-one and a half pence sterling, forty or fifty years ago. The ox could be chosen from a herd of two or three hundred. Ulloa says nothing about the price of bread, probably because he found nothing remarkable about it. An ox there, he says, costs little more than the labor of catching it. But grain cannot be grown anywhere without a great deal of labor. And in a country on the river Plate, the money price of labor could be very cheap. At that time, the river Plate was on the direct route from Europe to the silver mines of Potosi. The situation changes when most of the country is cultivated. There is then more bread than meat. People compete more for meat, and its price rises above the price of bread.

By the extension, besides, of cultivation, the unimproved wilds become insufficient to supply the demand for butcher’s meat. A great part of the cultivated lands must be employed in rearing and fattening cattle; of which the price, therefore, must be sufficient to pay, not only the labour necessary for tending them, but the rent which the landlord, and the profit which the farmer, could have drawn from such land employed in tillage. The cattle bred upon the most uncultivated moors, when brought to the same market, are, in proportion to their weight or goodness, sold at the same price as those which are reared upon the most improved land. The proprietors of those moors profit by it, and raise the rent of their land in proportion to the price of their cattle. It is not more than a century ago, that in many parts of the Highlands of Scotland, butcher’s meat was as cheap or cheaper than even bread made of oatmeal. The Union opened the market of England to the Highland cattle. Their ordinary price, at present, is about three times greater than at the beginning of the century, and the rents of many Highland estates have been tripled and quadrupled in the same time. In almost every part of Great Britain, a pound of the best butcher’s meat is, in the present times, generally worth more than two pounds of the best white bread; and in plentiful years it is sometimes worth three or four pounds.

As cultivation expands, the remaining wild land cannot supply enough meat to meet demand. Much of the cultivated land must be used to raise and fatten cattle. The price of cattle must therefore cover more than the labor of tending them. It must also cover the rent the landlord and the profit the farmer could have earned by growing crops on that land. Cattle bred on the wildest moors are brought to the same market as cattle raised on the most improved land. They sell for the same price according to their weight or quality. The owners of the moors profit from this and raise their rents in proportion to cattle prices. Less than a century ago, meat was as cheap as or cheaper than oatmeal bread in many parts of the Highlands of Scotland. The Union opened the English market to Highland cattle. Their usual price is now about three times what it was at the beginning of the century. Over the same period, rents on many Highland estates have tripled or quadrupled. In almost every part of Great Britain, a pound of the best meat is now generally worth more than two pounds of the best white bread. In plentiful years, it is sometimes worth three or four pounds.

It is thus that, in the progress of improvement, the rent and profit of unimproved pasture come to be regulated in some measure by the rent and profit of what is improved, and these again by the rent and profit of corn. Corn is an annual crop; butcher’s meat, a crop which requires four or five years to grow. As an acre of land, therefore, will produce a much smaller quantity of the one species of food than of the other, the inferiority of the quantity must be compensated by the superiority of the price. If it was more than compensated, more corn-land would be turned into pasture; and if it was not compensated, part of what was in pasture would be brought back into corn.

Thus, as agriculture improves, the rent and profit from unimproved pasture come to depend partly on those from improved pasture. In turn, the rent and profit from improved pasture depend on those from grain. Grain is an annual crop, while livestock raised for meat takes four or five years to grow. An acre of land therefore produces much less meat than grain. This smaller quantity must be compensated for by a higher price. If the higher price more than compensated for the difference, more grain fields would be turned into pasture. If it did not compensate for the difference, some pasture would be turned back into grain fields.

This equality, however, between the rent and profit of grass and those of corn; of the land of which the immediate produce is food for cattle, and of that of which the immediate produce is food for men, must be understood to take place only through the greater part of the improved lands of a great country. In some particular local situations it is quite otherwise, and the rent and profit of grass are much superior to what can be made by corn.

This equality between the rent and profit from grass and corn applies only across most improved land in a large country. Grassland produces food directly for cattle, while cornfields produce food directly for people. But in some particular places, the situation is quite different. There, the rent and profit from grass are much higher than those from corn.

Thus, in the neighbourhood of a great town, the demand for milk, and for forage to horses, frequently contribute, together with the high price of butcher’s meat, to raise the value of grass above what may be called its natural proportion to that of corn. This local advantage, it is evident, cannot be communicated to the lands at a distance.

Near a large town, demand for milk and horse feed often combines with high meat prices to raise the value of grass. Its value rises above what might be called its natural proportion to the value of grain. Clearly, this local advantage cannot extend to land farther away.

Particular circumstances have sometimes rendered some countries so populous, that the whole territory, like the lands in the neighbourhood of a great town, has not been sufficient to produce both the grass and the corn necessary for the subsistence of their inhabitants. Their lands, therefore, have been principally employed in the production of grass, the more bulky commodity, and which cannot be so easily brought from a great distance; and corn, the food of the great body of the people, has been chiefly imported from foreign countries. Holland is at present in this situation; and a considerable part of ancient Italy seems to have been so during the prosperity of the Romans. To feed well, old Cato said, as we are told by Cicero, was the first and most profitable thing in the management of a private estate; to feed tolerably well, the second; and to feed ill, the third. To plough, he ranked only in the fourth place of profit and advantage. Tillage, indeed, in that part of ancient Italy which lay in the neighbour hood of Rome, must have been very much discouraged by the distributions of corn which were frequently made to the people, either gratuitously, or at a very low price. This corn was brought from the conquered provinces, of which several, instead of taxes, were obliged to furnish a tenth part of their produce at a stated price, about sixpence a-peck, to the republic. The low price at which this corn was distributed to the people, must necessarily have sunk the price of what could be brought to the Roman market from Latium, or the ancient territory of Rome, and must have discouraged its cultivation in that country.

Special circumstances have sometimes made some countries so densely populated that their land could not produce enough grass and grain to feed their inhabitants. This was much like the land around a great town. Their land was therefore used mainly to grow grass, the bulkier commodity, which is harder to bring from far away. Grain, the main food of most people, was chiefly imported from foreign countries. Holland is now in this situation. A considerable part of ancient Italy also seems to have been in this situation during the prosperity of the Romans. Cicero tells us that old Cato ranked good grazing first among the most profitable uses of a private estate. He ranked fairly good grazing second and poor grazing third. He placed ploughing only fourth in profit and advantage. Indeed, grain farming near Rome must have been greatly discouraged by the frequent distributions of grain to the people. The grain was distributed either free or at a very low price. It came from the conquered provinces. Several of these provinces were required, instead of paying taxes, to supply the republic with a tenth of their produce. They received a fixed price of about sixpence a peck. The low price at which this grain was distributed must have lowered the price of grain brought to the Roman market from Latium, the ancient territory of Rome. This must have discouraged grain farming there.

In an open country, too, of which the principal produce is corn, a well-inclosed piece of grass will frequently rent higher than any corn field in its neighbourhood. It is convenient for the maintenance of the cattle employed in the cultivation of the corn; and its high rent is, in this case, not so properly paid from the value of its own produce, as from that of the corn lands which are cultivated by means of it. It is likely to fall, if ever the neighbouring lands are completely inclosed. The present high rent of inclosed land in Scotland seems owing to the scarcity of inclosure, and will probably last no longer than that scarcity. The advantage of inclosure is greater for pasture than for corn. It saves the labour of guarding the cattle, which feed better, too, when they are not liable to be disturbed by their keeper or his dog.

In open countryside where grain is the main crop, a well-fenced pasture will often rent for more than any nearby grain field. It provides a convenient place to keep the cattle used to cultivate the grain. In this case, the high rent comes less from the value of the pasture’s own produce than from the value of the grain fields it helps cultivate. The rent is likely to fall if the neighboring fields are ever completely fenced. The current high rent of fenced land in Scotland seems to result from the scarcity of fencing. It will probably last only as long as that scarcity continues. Fencing is more useful for pasture than for grain. It saves the labor of guarding cattle. The cattle also feed better when they are not likely to be disturbed by their keeper or the keeper’s dog.

But where there is no local advantage of this kind, the rent and profit of corn, or whatever else is the common vegetable food of the people, must naturally regulate upon the land which is fit for producing it, the rent and profit of pasture.

But where there is no such local advantage, the rent and profit from grain naturally govern those from pasture. The same applies to whatever other plant food is common among the people. This holds for land suitable for growing that food.

The use of the artificial grasses, of turnips, carrots, cabbages, and the other expedients which have been fallen upon to make an equal quantity of land feed a greater number of cattle than when in natural grass, should somewhat reduce, it might be expected, the superiority which, in an improved country, the price of butcher’s meat naturally has over that of bread. It seems accordingly to have done so; and there is some reason for believing that, at least in the London market, the price of butcher’s meat, in proportion to the price of bread, is a good deal lower in the present times than it was in the beginning of the last century.

Cultivated grasses, turnips, carrots, cabbages, and other such methods allow the same amount of land to feed more cattle than natural grass would. One might expect these methods to reduce the advantage that meat prices naturally have over bread prices in a developed country. They seem to have done so. There is some reason to believe that, at least in the London market, meat is now considerably cheaper relative to bread than it was at the beginning of the last century.

In the Appendix to the life of Prince Henry, Doctor Birch has given us an account of the prices of butcher’s meat as commonly paid by that prince. It is there said, that the four quarters of an ox, weighing six hundred pounds, usually cost him nine pounds ten shillings, or thereabouts; that is thirty-one shillings and eight-pence per hundred pounds weight. Prince Henry died on the 6th of November 1612, in the nineteenth year of his age.

In the appendix to the life of Prince Henry, Doctor Birch describes the prices the prince usually paid for meat. The four quarters of an ox weighing six hundred pounds usually cost him about nine pounds and ten shillings. That was thirty-one shillings and eight pence per hundred pounds of meat. Prince Henry died on November 6, 1612, at the age of eighteen.

In March 1764, there was a parliamentary inquiry into the causes of the high price of provisions at that time. It was then, among other proof to the same purpose, given in evidence by a Virginia merchant, that in March 1763, he had victualled his ships for twentyfour or twenty-five shillings the hundred weight of beef, which he considered as the ordinary price; whereas, in that dear year, he had paid twenty-seven shillings for the same weight and sort. This high price in 1764 is, however, four shillings and eight-pence cheaper than the ordinary price paid by Prince Henry; and it is the best beef only, it must be observed, which is fit to be salted for those distant voyages.

In March 1764, Parliament investigated the causes of the high price of food at the time. Among other evidence on the subject, a Virginia merchant testified about the price of beef. In March 1763, he had stocked his ships with beef at twenty-four or twenty-five shillings per hundredweight. He considered that the usual price. But in 1764, when prices were high, he had paid twenty-seven shillings for the same weight and quality. Even so, the high price in 1764 was four shillings and eight pence less than the usual price Prince Henry paid. It should also be noted that only the best beef is suitable for salting for such long voyages.

The price paid by Prince Henry amounts to 3d. 4/5ths per pound weight of the whole carcase, coarse and choice pieces taken together; and at that rate the choice pieces could not have been sold by retail for less than 4½d. or 5d. the pound.

Prince Henry paid 3⅘d. per pound for the whole carcass, including both coarse and choice cuts. At that rate, the choice cuts could not have sold at retail for less than 4½d. or 5d. per pound.

In the parliamentary inquiry in 1764, the witnesses stated the price of the choice pieces of the best beef to be to the consumer 4d. and 4½d. the pound; and the coarse pieces in general to be from seven farthings to 2½d. and 2¾d.; and this, they said, was in general one halfpenny dearer than the same sort of pieces had usually been sold in the month of March. But even this high price is still a good deal cheaper than what we can well suppose the ordinary retail price to have been in the time of Prince Henry.

In the parliamentary inquiry in 1764, witnesses gave the prices consumers paid for beef. The choicest cuts of the best beef cost 4d. to 4½d. per pound. The coarse cuts generally cost from seven farthings to 2½d. or 2¾d. per pound. The witnesses said these prices were generally a halfpenny higher than those cuts usually sold for in March. But even these high prices were still much lower than we can reasonably suppose the usual retail prices were in Prince Henry’s time.

During the first twelve years of the last century, the average price of the best wheat at the Windsor market was £ 1:18:3½d. the quarter of nine Winchester bushels.

During the first twelve years of the last century, the best wheat at Windsor market averaged £1:18:3½d. per quarter of nine Winchester bushels.

But in the twelve years preceding 1764 including that year, the average price of the same measure of the best wheat at the same market was £ 2:1:9½d.

But in the 12 years up to and including 1764, the average price at the same market was £2:1:9½d. This was for the same measure of the best wheat.

In the first twelve years of the last century, therefore, wheat appears to have been a good deal cheaper, and butcher’s meat a good deal dearer, than in the twelve years preceding 1764, including that year.

Therefore, wheat appears to have been much cheaper in the first twelve years of the last century. But meat appears to have been much more expensive than in the twelve years leading up to and including 1764.

In all great countries, the greater part of the cultivated lands are employed in producing either food for men or food for cattle. The rent and profit of these regulate the rent and profit of all other cultivated land. If any particular produce afforded less, the land would soon be turned into corn or pasture; and if any afforded more, some part of the lands in corn or pasture would soon be turned to that produce.

In all large countries, most cultivated land produces either food for people or feed for cattle. The rent and profit from this land determine the rent and profit of all other cultivated land. If a particular crop brought in less, the land would soon be used to grow grain or provide pasture. If a crop brought in more, some land used for grain or pasture would soon be used for that crop.

Those productions, indeed, which require either a greater original expense of improvement, or a greater annual expense of cultivation in order to fit the land for them, appear commonly to afford, the one a greater rent, the other a greater profit, than corn or pasture. This superiority, however, will seldom be found to amount to more than a reasonable interest or compensation for this superior expense.

Some crops require greater initial spending to prepare the land for them. Others require greater annual spending on cultivation. The first usually seem to yield higher rent than grain or pasture. The second usually seem to yield higher profit. But these higher returns will rarely amount to more than reasonable interest or compensation for the extra expense.

In a hop garden, a fruit garden, a kitchen garden, both the rent of the landlord, and the profit of the farmer, are generally greater than in acorn or grass field. But to bring the ground into this condition requires more expense. Hence a greater rent becomes due to the landlord. It requires, too, a more attentive and skilful management. Hence a greater profit becomes due to the farmer. The crop, too, at least in the hop and fruit garden, is more precarious. Its price, therefore, besides compensating all occasional losses, must afford something like the profit of insurance. The circumstances of gardeners, generally mean, and always moderate, may satisfy us that their great ingenuity is not commonly over-recompensed. Their delightful art is practised by so many rich people for amusement, that little advantage is to be made by those who practise it for profit; because the persons who should naturally be their best customers, supply themselves with all their most precious productions.

In a hop garden, fruit garden, or vegetable garden, the landlord’s rent and the farmer’s profit are generally greater than in a grain field or pasture. But preparing the land for these uses costs more. The landlord is therefore entitled to a higher rent. Such land also requires more careful and skilled management. The farmer is therefore entitled to a higher profit. The crop is also less reliable, at least in hop and fruit gardens. Its price must therefore compensate for all occasional losses and provide something like an insurance profit. Gardeners are generally poor and always of modest means. This suggests that their great skill is not usually overpaid. So many rich people practice this delightful art for pleasure that professional gardeners can make little profit. Those who would naturally be their best customers supply themselves with all the most valuable produce.

The advantage which the landlord derives from such improvements, seems at no time to have been greater than what was sufficient to compensate the original expense of making them. In the ancient husbandry, after the vineyard, a well-watered kitchen garden seems to have been the part of the farm which was supposed to yield the most valuable produce. But Democritus, who wrote upon husbandry about two thousand years ago, and who was regarded by the ancients as one of the fathers of the art, thought they did not act wisely who inclosed a kitchen garden. The profit, he said, would not compensate the expense of a stone-wall: and bricks (he meant, I suppose, bricks baked in the sun) mouldered with the rain and the winter-storm, and required continual repairs. Columella, who reports this judgment of Democritus, does not controvert it, but proposes a very frugal method of inclosing with a hedge of brambles and briars, which he says he had found by experience to be both a lasting and an impenetrable fence; but which, it seems, was not commonly known in the time of Democritus. Palladius adopts the opinion of Columella, which had before been recommended by Varro. In the judgment of those ancient improvers, the produce of a kitchen garden had, it seems, been little more than sufficient to pay the extraordinary culture and the expense of watering; for in countries so near the sun, it was thought proper, in those times as in the present, to have the command of a stream of water, which could be conducted to every bed in the garden. Through the greater part of Europe, a kitchen garden is not at present supposed to deserve a better inclosure than that recommended by Columella. In Great Britain, and some other northern countries, the finer fruits cannot be brought to perfection but by the assistance of a wall. Their price, therefore, in such countries, must be sufficient to pay the expense of building and maintaining what they cannot be had without. The fruit-wall frequently surrounds the kitchen garden, which thus enjoys the benefit of an inclosure which its own produce could seldom pay for.

The landlord’s benefit from such improvements seems never to have exceeded the amount needed to repay their original cost. In ancient farming, a well-watered kitchen garden seems to have been considered the most valuable part of a farm after the vineyard. But Democritus thought it unwise to enclose a kitchen garden. He wrote about farming some two thousand years ago, and the ancients regarded him as one of the founders of the art. He said the profit would not cover the cost of a stone wall. Bricks crumbled in rain and winter storms and needed constant repairs. I suppose he meant sun-baked bricks. Columella reports this judgment without disputing it. Instead, he proposes a very economical enclosure made from a hedge of brambles and briars. He says experience had shown him that such a hedge made a lasting fence that nothing could get through. But this method seems not to have been widely known in Democritus’s time. Palladius adopts Columella’s view, which Varro had recommended earlier. In the judgment of those ancient agricultural improvers, the produce of a kitchen garden seems to have barely covered the extra cultivation and watering costs. For in countries so near the sun, people then thought it necessary, as they do now, to have a stream that could be directed to every garden bed. In most of Europe today, a kitchen garden is not thought to deserve a better enclosure than the one Columella recommended. In Great Britain and some other northern countries, the finer fruits can only ripen fully with the help of a wall. Their price in those countries must therefore cover the cost of building and maintaining a wall, without which they cannot be grown. The fruit wall often surrounds the kitchen garden. The garden thus benefits from an enclosure that its own produce could seldom pay for.

That the vineyard, when properly planted and brought to perfection, was the most valuable part of the farm, seems to have been an undoubted maxim in the ancient agriculture, as it is in the modern, through all the wine countries. But whether it was advantageous to plant a new vineyard, was a matter of dispute among the ancient Italian husbandmen, as we learn from Columella. He decides, like a true lover of all curious cultivation, in favour of the vineyard; and endeavours to shew, by a comparison of the profit and expense, that it was a most advantageous improvement. Such comparisons, however, between the profit and expense of new projects are commonly very fallacious; and in nothing more so than in agriculture. Had the gain actually made by such plantations been commonly as great as he imagined it might have been, there could have been no dispute about it. The same point is frequently at this day a matter of controversy in the wine countries. Their writers on agriculture, indeed, the lovers and promoters of high cultivation, seem generally disposed to decide with Columella in favour of the vineyard. In France, the anxiety of the proprietors of the old vineyards to prevent the planting of any new ones, seems to favour their opinion, and to indicate a consciousness in those who must have the experience, that this species of cultivation is at present in that country more profitable than any other. It seems, at the same time, however, to indicate another opinion, that this superior profit can last no longer than the laws which at present restrain the free cultivation of the vine. In 1731, they obtained an order of council, prohibiting both the planting of new vineyards, and the renewal of these old ones, of which the cultivation had been interrupted for two years, without a particular permission from the king, to be granted only in consequence of an information from the intendant of the province, certifying that he had examined the land, and that it was incapable of any other culture. The pretence of this order was the scarcity of corn and pasture, and the superabundance of wine. But had this superabundance been real, it would, without any order of council, have effectually prevented the plantation of new vineyards, by reducing the profits of this species of cultivation below their natural proportion to those of corn and pasture. With regard to the supposed scarcity of corn occasioned by the multiplication of vineyards, corn is nowhere in France more carefully cultivated than in the wine provinces, where the land is fit for producing it: as in Burgundy, Guienne, and the Upper Languedoc. The numerous hands employed in the one species of cultivation necessarily encourage the other, by affording a ready market for its produce. To diminish the number of those who are capable of paying it, is surely a most unpromising expedient for encouraging the cultivation of corn. It is like the policy which would promote agriculture, by discouraging manufactures.

In ancient agriculture, a properly planted and fully developed vineyard seems to have been unquestionably the most valuable part of a farm. The same is true today throughout the wine-producing countries. But, as Columella tells us, ancient Italian farmers disputed whether planting a new vineyard was profitable. Like a true lover of all elaborate cultivation, he comes down in favor of vineyards. He compares the profits and expenses and tries to show that planting a vineyard was a highly profitable improvement. Such comparisons of the profits and expenses of new projects are usually very misleading. This is especially true in agriculture. If vineyards had commonly produced the profits he imagined they might, there could have been no dispute. The same question is still often debated in wine-producing countries today. Agricultural writers, who love and promote intensive cultivation, generally seem inclined to agree with Columella. In France, the owners of old vineyards are anxious to prevent new ones from being planted. This seems to support the writers' opinion. It suggests that those who must have experience know that growing vines is currently more profitable there than any other kind of cultivation. At the same time, it seems to suggest that they hold another opinion. They believe this greater profit can last only as long as the laws that now restrict the free cultivation of vines. In 1731, the owners obtained an order of council prohibiting the planting of new vineyards. It also prohibited the restoration of old vineyards that had not been cultivated for two years. Either required special permission from the king. This permission could be granted only after a report from the provincial intendant. The intendant had to certify that he had examined the land and found it unsuitable for any other crop. The stated reason for the order was a shortage of corn and pasture and an excess of wine. But if the excess had been real, it would have effectively prevented the planting of new vineyards without any order of council. It would have reduced the profits from growing vines below their natural proportion to those from corn and pasture. As for the supposed shortage of corn caused by the increase in vineyards, corn is cultivated most carefully in France's wine provinces. This is true where the land is suitable for it, as in Burgundy, Guienne, and the Upper Languedoc. The many workers employed in growing vines necessarily encourage the cultivation of corn by providing a ready market for it. Reducing the number of people able to pay for corn is surely a most unpromising way to encourage its cultivation. It is like trying to promote agriculture by discouraging manufactures.

The rent and profit of those productions, therefore, which require either a greater original expense of improvement in order to fit the land for them, or a greater annual expense of cultivation, though often much superior to those of corn and pasture, yet when they do no more than compensate such extraordinary expense, are in reality regulated by the rent and profit of those common crops.

Some products require greater initial expense to prepare the land, or greater yearly expense to cultivate it. Their rent and profit are therefore often much higher than those of grain and pasture. But when they only cover the extra expense, they are really governed by the rent and profit of those common crops.

It sometimes happens, indeed, that the quantity of land which can be fitted for some particular produce, is too small to supply the effectual demand. The whole produce can be disposed of to those who are willing to give somewhat more than what is sufficient to pay the whole rent, wages, and profit, necessary for raising and bringing it to market, according to their natural rates, or according to the rates at which they are paid in the greater part of other cultivated land. The surplus part of the price which remains after defraying the whole expense of improvement and cultivation, may commonly, in this case, and in this case only, bear no regular proportion to the like surplus in corn or pasture, but may exceed it in almost any degree; and the greater part of this excess naturally goes to the rent of the landlord.

Sometimes, the land suitable for a particular crop is too limited to meet the effective demand for it. The entire crop can be sold to buyers willing to pay somewhat more than its full cost. That cost includes the rent, wages, and profit needed to produce the crop and bring it to market. These are calculated at their natural rates, or the rates paid on most other cultivated land. In this case, and only in this case, the surplus may commonly bear no regular proportion to the surplus from grain or pasture. This surplus is the amount left from the price after all costs of improving and cultivating the land are paid. It may exceed the surplus from grain or pasture by almost any amount. Most of this excess naturally goes to the landlord as rent.

The usual and natural proportion, for example, between the rent and profit of wine, and those of corn and pasture, must be understood to take place only with regard to those vineyards which produce nothing but good common wine, such as can be raised almost anywhere, upon any light, gravelly, or sandy soil, and which has nothing to recommend it but its strength and wholesomeness. It is with such vineyards only, that the common land of the country can be brought into competition; for with those of a peculiar quality it is evident that it cannot.

For example, the usual and natural relationship between rents and profits from wine, grain, and pasture applies only to certain vineyards. These vineyards produce nothing but good, ordinary wine. Such wine can be produced almost anywhere on light, gravelly, or sandy soil. It has nothing to recommend it except its strength and wholesomeness. Only such vineyards can compete with ordinary land in the country. Clearly, ordinary land cannot compete with vineyards that produce wine of a special quality.

The vine is more affected by the difference of soils than any other fruit-tree. From some it derives a flavour which no culture or management can equal, it is supposed, upon any other. This flavour, real or imaginary, is sometimes peculiar to the produce of a few vineyards; sometimes it extends through the greater part of a small district, and sometimes through a considerable part of a large province. The whole quantity of such wines that is brought to market falls short of the effectual demand, or the demand of those who would be willing to pay the whole rent, profit, and wages, necessary for preparing and bringing them thither, according to the ordinary rate, or according to the rate at which they are paid in common vineyards. The whole quantity, therefore, can be disposed of to those who are willing to pay more, which necessarily raises their price above that of common wine. The difference is greater or less, according as the fashionableness and scarcity of the wine render the competition of the buyers more or less eager. Whatever it be, the greater part of it goes to the rent of the landlord. For though such vineyards are in general more carefully cultivated than most others, the high price of the wine seems to be, not so much the effect, as the cause of this careful cultivation. In so valuable a produce, the loss occasioned by negligence is so great, as to force even the most careless to attention. A small part of this high price, therefore, is sufficient to pay the wages of the extraordinary labour bestowed upon their cultivation, and the profits of the extraordinary stock which puts that labour into motion.

The vine is more affected by differences in soil than any other fruit tree. Some soils give its grapes a flavor that, supposedly, no cultivation or management can match in any other soil. This flavor, real or imaginary, is sometimes found only in the produce of a few vineyards. Sometimes it extends through most of a small district, or through a considerable part of a large province. The total supply of such wines brought to market falls short of the effective demand for them. This is the demand from those willing to pay the full rent, profit, and wages needed to prepare and transport them. These costs are calculated at the usual rates, or the rates paid in ordinary vineyards. The entire supply can therefore be sold to people willing to pay more. This necessarily raises the price above that of ordinary wine. The difference varies according to how fashionable and scarce the wine is, and how eagerly buyers compete for it. Whatever the difference, most of it goes to the landlord as rent. These vineyards are generally cultivated more carefully than most others. But the high price of the wine seems to be the cause of this care, rather than its effect. With such a valuable product, the loss caused by neglect is so great that even the most careless must pay attention. Only a small part of the high price is therefore needed to pay wages for the extra labor of cultivation. It also covers the profits on the extra capital that employs this labor.

The sugar colonies possessed by the European nations in the West Indies may be compared to those precious vineyards. Their whole produce falls short of the effectual demand of Europe, and can be disposed of to those who are willing to give more than what is sufficient to pay the whole rent, profit, and wages, necessary for preparing and bringing it to market, according to the rate at which they are commonly paid by any other produce. In Cochin China, the finest white sugar generally sells for three piastres the quintal, about thirteen shillings and sixpence of our money, as we are told by Mr Poivre {Voyages d’un Philosophe.}, a very careful observer of the agriculture of that country. What is there called the quintal, weighs from a hundred and fifty to two hundred Paris pounds, or a hundred and seventy-five Paris pounds at a medium, which reduces the price of the hundred weight English to about eight shillings sterling; not a fourth part of what is commonly paid for the brown or muscovada sugars imported from our colonies, and not a sixth part of what is paid for the finest white sugar. The greater part of the cultivated lands in Cochin China are employed in producing corn and rice, the food of the great body of the people. The respective prices of corn, rice, and sugar, are there probably in the natural proportion, or in that which naturally takes place in the different crops of the greater part of cultivated land, and which recompenses the landlord and farmer, as nearly as can be computed, according to what is usually the original expense of improvement, and the annual expense of cultivation. But in our sugar colonies, the price of sugar bears no such proportion to that of the produce of a rice or corn field either in Europe or America. It is commonly said that a sugar planter expects that the rum and the molasses should defray the whole expense of his cultivation, and that his sugar should be all clear profit. If this be true, for I pretend not to affirm it, it is as if a corn farmer expected to defray the expense of his cultivation with the chaff and the straw, and that the grain should be all clear profit. We see frequently societies of merchants in London, and other trading towns, purchase waste lands in our sugar colonies, which they expect to improve and cultivate with profit, by means of factors and agents, notwithstanding the great distance and the uncertain returns, from the defective administration of justice in those countries. Nobody will attempt to improve and cultivate in the same manner the most fertile lands of Scotland, Ireland, or the corn provinces of North America, though, from the more exact administration of justice in these countries, more regular returns might be expected.

The sugar colonies that European nations possess in the West Indies may be compared to those precious vineyards. Their total output falls short of Europe’s effective demand. It can therefore be sold to buyers willing to pay more than the full rent, profit, and wages needed to prepare it and bring it to market. They pay more than the usual rates for other products. In Cochin China, the finest white sugar generally sells for three piastres per quintal, or about thirteen shillings and sixpence in our money. Mr Poivre reports this in {Voyages d’un Philosophe.}. He observed the country’s agriculture with great care. A quintal there weighs from 150 to 200 Paris pounds, or 175 Paris pounds on average. This brings the price to about eight shillings sterling per English hundredweight. That is less than a fourth of the usual price of brown or muscovada sugar imported from our colonies. It is less than a sixth of the price of the finest white sugar. Most cultivated land in Cochin China is used to grow corn and rice, the food of the great majority of the people. The prices of corn, rice, and sugar there are probably in their natural proportion to one another. This is the proportion that naturally arises among the crops grown on most cultivated land. As nearly as can be calculated, it compensates the landlord and farmer according to the usual initial cost of improvements and annual cost of cultivation. But in our sugar colonies, the price of sugar bears no such proportion to the price of a rice or corn crop in Europe or America. People commonly say that a sugar planter expects rum and molasses to cover all his cultivation costs. He expects his sugar to be pure profit. If this is true, though I do not claim that it is, it is like a corn farmer expecting chaff and straw to cover his cultivation costs and the grain to be pure profit. We often see groups of merchants in London and other trading towns buy uncultivated land in our sugar colonies. They expect to improve and cultivate it profitably through factors and agents. They do so despite the great distance and the uncertain returns caused by the defective administration of justice in those countries. Nobody will try to improve and cultivate the most fertile lands of Scotland, Ireland, or the corn provinces of North America in the same way. Yet the more reliable administration of justice in those countries might lead one to expect more regular returns.

In Virginia and Maryland, the cultivation of tobacco is preferred, as most profitable, to that of corn. Tobacco might be cultivated with advantage through the greater part of Europe; but, in almost every part of Europe, it has become a principal subject of taxation; and to collect a tax from every different farm in the country where this plant might happen to be cultivated, would be more difficult, it has been supposed, than to levy one upon its importation at the custom-house. The cultivation of tobacco has, upon this account, been most absurdly prohibited through the greater part of Europe, which necessarily gives a sort of monopoly to the countries where it is allowed; and as Virginia and Maryland produce the greatest quantity of it, they share largely, though with some competitors, in the advantage of this monopoly. The cultivation of tobacco, however, seems not to be so advantageous as that of sugar. I have never even heard of any tobacco plantation that was improved and cultivated by the capital of merchants who resided in Great Britain; and our tobacco colonies send us home no such wealthy planters as we see frequently arrive from our sugar islands. Though, from the preference given in those colonies to the cultivation of tobacco above that of corn, it would appear that the effectual demand of Europe for tobacco is not completely supplied, it probably is more nearly so than that for sugar; and though the present price of tobacco is probably more than sufficient to pay the whole rent, wages, and profit, necessary for preparing and bringing it to market, according to the rate at which they are commonly paid in corn land, it must not be so much more as the present price of sugar. Our tobacco planters, accordingly, have shewn the same fear of the superabundance of tobacco, which the proprietors of the old vineyards in France have of the superabundance of wine. By act of assembly, they have restrained its cultivation to six thousand plants, supposed to yield a thousand weight of tobacco, for every negro between sixteen and sixty years of age. Such a negro, over and above this quantity of tobacco, can manage, they reckon, four acres of Indian corn. To prevent the market from being overstocked, too, they have sometimes, in plentiful years, we are told by Dr Douglas {Douglas’s Summary, vol. ii. p. 379, 373.} (I suspect he has been ill informed), burnt a certain quantity of tobacco for every negro, in the same manner as the Dutch are said to do of spices. If such violent methods are necessary to keep up the present price of tobacco, the superior advantage of its culture over that of corn, if it still has any, will not probably be of long continuance.

In Virginia and Maryland, tobacco is preferred to corn because it is more profitable. Tobacco could be grown profitably across most of Europe. But in almost every part of Europe, it has become a major subject of taxation. Collecting a tax from every farm that grows tobacco would supposedly be harder than taxing imports at the customs house. For this reason, tobacco cultivation has been most absurdly prohibited across most of Europe. This necessarily gives countries where it is allowed a kind of monopoly. Virginia and Maryland produce the most tobacco, so they enjoy a large share of this advantage, though they have competitors. Growing tobacco, however, does not seem as profitable as growing sugar. I have never even heard of a tobacco plantation developed and cultivated with capital from merchants living in Great Britain. Nor do our tobacco colonies send us wealthy planters like those who often arrive from our sugar islands. Those colonies prefer growing tobacco to corn. This suggests that Europe's effective demand for tobacco is not completely met. But that demand is probably closer to being met than the demand for sugar. Tobacco's current price is probably more than enough to cover all the rent, wages, and profit needed to prepare it and bring it to market, at the rates usually paid for corn land. But the price must not exceed those costs by as much as the current price of sugar does. Our tobacco planters have accordingly shown the same fear of a tobacco surplus as owners of old vineyards in France have shown of a wine surplus. By an act of assembly, they have limited cultivation to six thousand plants for every negro between sixteen and sixty. Those plants are supposed to yield a thousand pounds of tobacco. They reckon that such a negro can also manage four acres of Indian corn. Dr Douglas tells us that planters have sometimes burned a certain quantity of tobacco for every negro in plentiful years {Douglas’s Summary, vol. ii. p. 379, 373.}. I suspect he has been misinformed. They supposedly did this to prevent a surplus, just as the Dutch are said to burn spices. If such extreme measures are necessary to maintain the current price of tobacco, its greater profitability over corn, if it still has any, will probably not last long.

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

In this way, the rent of cultivated land that produces food for people determines the rent of most other cultivated land. No crop can yield less rent for long, because the land would immediately be put to another use. If a particular crop usually yields more rent, it is because too little land is suitable for growing it. There is not enough suitable land to supply the demand of those willing and able to pay.

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

In Europe, grain is the main crop grown for people to eat. So, except in particular situations, the rent for grain land determines the rent for all other cultivated land in Europe. Britain need envy neither the vineyards of France nor the olive plantations of Italy. Except in particular situations, their value is determined by the value of grain. Britain’s land is nearly as fertile for growing grain as the land in either of those countries.

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

Suppose that, in a country, people’s usual and favorite plant food comes from a particular crop. With the same or nearly the same cultivation, ordinary land produces much more of this crop than the most fertile land produces of grain. In that case, the landlord’s rent would necessarily be much greater. His rent is the surplus food left after paying for labor and replacing the farmer’s capital, together with its usual profits. Whatever the usual cost of supporting a worker in that country, this greater surplus could always support more workers. It would therefore enable the landlord to buy or command more labor. The real value of his rent, and his real power and authority, would necessarily be much greater. So too would be his command over the necessities and comforts of life that other people’s labor could supply.

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

A rice field produces much more food than the most fertile cornfield. An acre is said to ordinarily produce two crops a year, each yielding thirty to sixty bushels. Growing rice therefore requires more labor, but a much larger surplus remains after supporting all the workers. In rice-growing countries, rice is the people’s common and favorite plant food, and farmers live chiefly on it. In those countries, landlords should receive a greater share of this larger surplus than landlords in corn-growing countries. In Carolina, as in other British colonies, planters are generally both farmers and landlords. Rent is therefore mixed up with profit. There, growing rice is more profitable than growing corn, though the fields produce only one crop a year. European customs also prevail there, so rice is not the people’s common and favorite plant food.

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

A good rice field is a bog all year round, and for part of the year it is covered with water. It is unsuitable for grain, pasture, vineyards, or any other crops that are very useful to people. And land suitable for those uses is unsuitable for rice. So even in countries where rice is grown, the rent of rice fields cannot determine the rent of other farmland. That other land can never be used to grow rice.

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

A field of potatoes produces at least as much food as a field of rice and much more than a field of wheat. A yield of 12,000 pounds of potatoes per acre is no greater than a yield of 2,000 pounds of wheat. The food, or solid nourishment, obtained from each plant is not quite proportional to its weight, because potatoes contain water. Even if we allow half the weight of potatoes for water, which is a very generous allowance, an acre will still produce 6,000 pounds of solid nourishment. That is three times the amount produced by an acre of wheat. An acre of potatoes costs less to cultivate than an acre of wheat. The fallow period that generally comes before wheat is sown more than offsets the hoeing and other extra cultivation that potatoes always receive. In some rice-growing countries, rice is the people's common and favorite plant food. Suppose potatoes were ever to become the same in any part of Europe. Suppose, too, that potatoes came to occupy the same share of cultivated land now used for wheat and other grains grown for human food. Then the same amount of cultivated land would support many more people. If laborers were generally fed potatoes, a larger surplus would remain after replacing all the stock used in cultivation and supporting all the laborers employed in it. A larger share of this surplus would also belong to the landlord. The population would increase, and rents would rise far above their present level.

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

Land suitable for potatoes is also suitable for almost every other useful vegetable. Suppose potatoes took up the same share of cultivated land that corn does now. They would similarly determine the rent of most other cultivated land.

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

I have been told that, in some parts of Lancashire, people claim oatmeal bread is heartier food for laborers than wheat bread. I have often heard the same claim in Scotland. I am, however, somewhat doubtful that it is true. Ordinary people in Scotland eat oatmeal. They are generally neither as strong nor as handsome as people of the same rank in England, who eat wheat bread. They neither work as well nor look as well. There is no such difference between fashionable people in the two countries. Experience would therefore seem to show that the food of ordinary people in Scotland is less suited to the human body than the food of their English neighbors of the same rank. But potatoes seem to be different. London’s sedan chair carriers, porters, and coal heavers may be the strongest men in the British dominions. The unfortunate women there who live by prostitution may be the most beautiful women in those dominions. Most of them are said to come from the lowest rank of people in Ireland, who generally eat potatoes. No food could offer more decisive proof that it is nourishing and especially suited to human health.

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

Potatoes are difficult to preserve for a full year. Unlike grain, they cannot be stored for two or three years. The fear of being unable to sell potatoes before they rot discourages people from growing them. This is perhaps the main reason potatoes have never become the principal vegetable food of all social ranks in any large country, as bread has.

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

Food for humans seems to be the only product of land that always and necessarily provides some rent to the landlord. Other products may or may not provide rent, depending on the circumstances.

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

After food, clothing and shelter are humanity's two greatest needs.

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

In its natural, undeveloped state, land can provide clothing and shelter materials for far more people than it can feed. Once developed, it can sometimes feed more people than it can supply with those materials. At least, it cannot always supply them in the forms people want and are willing to pay for. Undeveloped land therefore always has an abundance of these materials, which are often worth little or nothing as a result. Developed land, on the other hand, often has a shortage of them, which necessarily increases their value. On undeveloped land, much of this material is thrown away as useless. The price of what is used is thought to cover only the labor and expense of preparing it for use. It can therefore provide no rent for the landlord. On developed land, all the material is used, and demand often exceeds the available supply. Someone is always willing to pay more for every part of it than the cost of bringing it to market. Its price can therefore always provide some rent for the landlord.

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

The skins of larger animals were the first materials used for clothing. Hunters and shepherds live chiefly on the flesh of these animals. So, by providing his own food, each man also provides more clothing material than he can wear. Without foreign trade, most of the skins would be thrown away as worthless. This was probably the case among the hunting nations of North America before Europeans discovered their country. They now exchange their surplus animal skins with Europeans for blankets, firearms, and brandy. This trade gives the skins some value. In the present commercial state of the known world, I believe even the most barbarous nations have some foreign trade of this kind, provided that land ownership is established among them. Their land produces clothing materials that cannot be made into goods or consumed at home. Their wealthier neighbours demand all these materials, raising their price above the cost of sending them there. The materials therefore provide some rent for the landlord. When most Highland cattle were eaten on their own hills, the export of their hides was the largest part of that country’s trade. The goods received in exchange added something to the rent of Highland estates. In old times, England’s wool could not all be consumed or made into goods at home. It found a market in Flanders, which was then wealthier and more industrious. The price of the wool added something to the rent of the land that produced it. Some countries were no better cultivated than England was then, or than the Highlands of Scotland are now. Without foreign trade, such countries would clearly have a great surplus of clothing materials. Much of it would be thrown away as useless, and none of it could provide any rent for the landlord.

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

Building materials cannot always be transported as far as materials for clothing. They are also less easily traded abroad. When a country has more building materials than it needs, they are often worthless to the landowner. This happens even in the present commercial state of the world. A good stone quarry near London would bring its owner a considerable rent. In many parts of Scotland and Wales, it would bring none. Timber from trees that bear no fruit is valuable in a populous, well cultivated country. Land that produces it brings a considerable rent. But in many parts of North America, a landowner would be grateful to anyone who removed most of his large trees. In some parts of the Highlands of Scotland, only the bark can be sent to market. There are no roads or means of transport by water, so the timber is left to rot on the ground. When building materials are so abundant, the materials used are worth only the labor and expense of preparing them for use. They bring no rent to the landowner, who generally lets anyone use them if they bother to ask. Demand from wealthier nations, however, sometimes allows the landowner to earn rent from them. Paving the streets of London has allowed the owners of some barren rocks on the coast of Scotland to earn rent from them for the first time. The woods of Norway and the Baltic coasts find a market in many parts of Great Britain. They could find no such market at home, and so they bring some rent to their owners.

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

A country’s population depends not on how many people its produce can clothe and house, but on how many it can feed. Once food is available, it is easy to find the necessary clothing and shelter. But even when clothing and shelter are available, food may often be difficult to find. In some parts of the British dominions, one man can build what is called a house in a day’s work. The simplest kind of clothing, animal skins, takes somewhat more work to prepare for use. Even so, it does not take much. Among savage or barbarous nations, a hundredth or little more of a year’s labor is enough to provide clothing and shelter that satisfy most people. All the other ninety-nine parts of that labor are often only just enough to provide them with food.

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

But when land is improved and cultivated, one family’s labor can provide food for two families. Then the labor of half of society is enough to feed everyone. The other half, or at least most of them, can work to provide other things. They can satisfy humanity’s other needs and desires. Most of these needs and desires concern clothing, housing, household furniture, and what is called equipage, such as carriages. A rich man consumes no more food than his poor neighbor. The quality may be very different, and selecting and preparing it may require more labor and skill. But the quantity is nearly the same. Compare the spacious palace and large wardrobe of the rich man with the hovel and few rags of the poor man. You will see that the difference in their clothing, housing, and furniture is almost as great in quantity as in quality. Each person’s desire for food is limited by the small capacity of the human stomach. But the desire for comforts and decorations in buildings, clothing, equipage, and household furniture seems to have no definite limit. So those who control more food than they can consume are always willing to exchange the surplus for these other pleasures. Or they may exchange the price of that surplus, which amounts to the same thing. After satisfying their limited desire for food, they use what remains to entertain desires that cannot be satisfied. These desires seem to be altogether endless. To obtain food, the poor work to satisfy these desires of the rich. To obtain food more certainly, they compete to make their work cheaper and more perfect. The number of workers increases as the food supply grows, or as land is increasingly improved and cultivated. Their work allows the greatest possible division of labor. So the quantity of materials they can work up increases much faster than their numbers. This creates demand for every kind of material that human ingenuity can use. These materials may serve useful or decorative purposes in buildings, clothing, equipage, or household furniture. They include the fossils and minerals found deep in the earth, precious metals, and precious stones.

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

In this way, food is not only the original source of rent. Every other product of the land that later yields rent derives that part of its value from improvements in workers’ ability to produce food. Those improvements come from improving and cultivating the land.

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

Other products of the land that later yield rent, however, do not always do so. Even in developed and cultivated countries, demand for them is not always high enough to bring a greater price. The price may be only enough to pay for the labor and replace the capital needed to bring them to market, along with its usual profit. Whether demand is high enough depends on various circumstances.

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

Whether a coal mine can yield any rent, for example, depends partly on its productivity and partly on its location.

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

A mine of any kind may be called fertile or barren based on how much mineral a given amount of labor extracts from it. A fertile mine yields more mineral for the same labor than most other mines of the same kind. A barren mine yields less.

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

Some coal mines are well located but cannot be worked because they yield too little coal. The coal produced does not cover the cost of mining it. These mines can provide neither profit nor rent.

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

Some produce barely enough to pay for the labor and replace the capital used to work them, with its usual profit. They provide some profit for the person running the work, but no rent for the landlord. Only the landlord can work them profitably. By running the work himself, he earns the usual profit on the capital he invests. Many coal mines in Scotland are worked this way and cannot be worked any other way. The landlord will not allow anyone else to work them without paying rent, and no one can afford to pay any.

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

Other coal mines in the same country have enough coal, but cannot be worked because of their location. Enough coal to cover the cost of mining could be extracted with the usual amount of labor, or even less. But that much coal could not be sold in a sparsely populated inland area without good roads or water transport.

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

Coal is a less pleasant fuel than wood. It is also said to be less healthy. Coal must therefore generally cost somewhat less than wood where it is used.

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

The price of wood also varies with the state of agriculture, much as the price of cattle does, and for exactly the same reason. In the earliest stages of agriculture, woods cover most of every country. They are then merely a burden, of no value to the landlord, who would gladly give the wood to anyone willing to cut it. As agriculture advances, cultivation clears some of the woods. Others decay because of the growing number of cattle. Cattle do not increase as much as corn, which is entirely the product of human labor. Yet they multiply under human care and protection. People store up food in times of plenty to sustain cattle in times of scarcity. Throughout the year, they provide cattle with more food than uncultivated nature supplies. They also kill and wipe out the cattle's enemies, so the animals can freely enjoy all the food nature provides. When large herds are allowed to wander through the woods, they do not destroy the old trees, but they prevent young ones from growing. As a result, the whole forest is ruined over a century or two. The resulting scarcity of wood raises its price. Woodland brings in a good rent. The landlord sometimes finds that he can hardly use his best land more profitably than by growing timber from trees that bear no fruit. The large profit often makes up for the long wait for a return. This seems to be roughly the situation today in several parts of Great Britain. There, planting trees is found to be as profitable as growing corn or keeping pasture. Nowhere can the landlord's gain from planting trees exceed the rent from corn or pasture for any considerable time. In a highly cultivated inland area, it will often fall not much short of that rent. On the coast of a well-developed country, however, coal may be readily available for fuel. If so, it may sometimes be cheaper to import timber for building from less cultivated foreign countries than to grow it at home. In the new town of Edinburgh, built within the last few years, there is perhaps not a single piece of Scotch timber.

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

Whatever the price of wood, the cost of a coal fire may be nearly equal to that of a wood fire. If so, we can be sure that coal is as expensive as it can be in that place and under those circumstances. This seems to be true in some inland parts of England, particularly in Oxfordshire. There, even common people usually mix coal and wood in their fires. The cost of the two fuels cannot, therefore, be very different. In coal-producing regions, coal is everywhere much cheaper than this highest price. If it were not, it could not bear the cost of transport over long distances, whether by land or water. Only a small quantity could be sold. Coal operators and mine owners find it more profitable to sell a large quantity at a price somewhat above the lowest possible price. This serves their interests better than selling a small quantity at the highest price. The most productive coal mine also sets the price of coal at all the other mines in its neighborhood. Both its owner and its operator find it worthwhile to sell somewhat below their neighbors’ prices. The owner can get more rent, and the operator can make more profit. Their neighbors are soon forced to sell at the same price, though they can less easily afford to do so. This always reduces their rent and profit, and sometimes eliminates both altogether. Some mines are abandoned. Others cannot pay any rent and can be worked only by their owners.

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

Like all other goods, coal has a lowest price at which it can be sold for any considerable time. That price is just enough to recover the capital needed to bring it to market, along with the usual profit. A mine owner may be unable to get any rent for a coal mine. In that case, the owner must either work the mine personally or leave it idle. The price of coal from such a mine must generally be close to this minimum price.

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

Even where coal yields rent, rent generally makes up a smaller share of its price than of most other raw products of the land. Rent for an aboveground estate usually amounts to what is estimated to be a third of its gross produce. The rent is generally fixed, regardless of occasional changes in the crop. For coal mines, a fifth of the gross produce is a very high rent, while a tenth is common. The rent is seldom fixed, but depends on occasional changes in output. These changes are so great that a coal mine selling for ten years' rent is regarded as fetching a good price. In the same country, an estate selling for thirty years' rent would be considered moderately priced.

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

The value of a coal mine to its owner often depends as much on its location as on its productivity. The value of a metal mine depends more on its productivity and less on its location. Once separated from the ore, common metals, and especially precious metals, are very valuable. They can generally be transported over long distances by land and even the greatest distances by sea. Their market is not limited to countries near the mine, but extends across the whole world. Copper from Japan is traded in Europe, and iron from Spain is traded in Chili and Peru. Silver from Peru reaches not only Europe but also China by way of Europe.

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

The price of coal in Westmoreland or Shropshire can have little effect on its price in Newcastle. The price in the Lionnois can have no effect at all. Coal from mines so far apart can never compete with one another. But metals from even the most distant mines can often compete, and in fact commonly do.

The price, therefore, of the coarse, and still more that of the precious metals, at the most fertile mines in the world, must necessarily more or less affect their price at every other in it. The price of copper in Japan must have some influence upon its price at the copper mines in Europe. The price of silver in Peru, or the quantity either of labour or of other goods which it will purchase there, must have some influence on its price, not only at the silver mines of Europe, but at those of China. After the discovery of the mines of Peru, the silver mines of Europe were, the greater part of them, abandoned. The value of silver was so much reduced, that their produce could no longer pay the expense of working them, or replace, with a profit, the food, clothes, lodging, and other necessaries which were consumed in that operation. This was the case, too, with the mines of Cuba and St. Domingo, and even with the ancient mines of Peru, after the discovery of those of Potosi. The price of every metal, at every mine, therefore, being regulated in some measure by its price at the most fertile mine in the world that is actually wrought, it can, at the greater part of mines, do very little more than pay the expense of working, and can seldom afford a very high rent to the landlord. Rent accordingly, seems at the greater part of mines to have but a small share in the price of the coarse, and a still smaller in that of the precious metals. Labour and profit make up the greater part of both.

The price of base metals, and even more so of precious metals, at the world’s most productive mines must therefore affect their price at every other mine. The price of copper in Japan must have some influence on its price at European copper mines. The price of silver in Peru must also have some influence on its price at silver mines in Europe and China. In other words, the amount of labor or other goods that silver can buy in Peru must have some influence on its price at those mines. After the discovery of the mines of Peru, most European silver mines were abandoned. The value of silver had fallen so much that their output could no longer cover the cost of working them. It could not replace, with a profit, the food, clothes, lodging, and other necessities consumed in the work. The same happened to the mines of Cuba and St. Domingo, and even to the ancient mines of Peru, after the discovery of those of Potosi. The price of each metal at every mine is therefore regulated to some extent by its price at the world’s most productive mine in operation. At most mines, that price can do little more than cover the cost of working the mine. It can seldom provide the landlord with a very high rent. Accordingly, at most mines, rent seems to make up only a small part of the price of base metals, and an even smaller part of the price of precious metals. Labor and profit make up most of the price of both.

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

The average rent for Cornwall’s tin mines may be estimated at one sixth of their total output. The Rev. Mr. Borlace, vice-warden of the stannaries, says these mines are the most productive known in the world. He says some yield more rent and some less. Several highly productive lead mines in Scotland also pay one sixth of their total output as rent.

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

Frezier and Ulloa tell us about the silver mines of Peru. The owner often asks the mine operator for only one payment. The operator must grind the ore at the owner’s mill and pay the usual grinding fee. Until 1736, however, the king of Spain’s tax amounted to one fifth of the standard silver. That tax could be regarded as the real rent of most silver mines in Peru, the richest ever known. Without the tax, this fifth would naturally have gone to the landowner. Many mines could also have been worked that could not be worked then because they could not afford the tax. The duke of Cornwall’s tax on tin is thought to be more than five percent, or one twentieth of its value. Whatever his share, it too would naturally go to the mine owner if tin were free of duty. Adding one twentieth to one sixth gives thirteen twelfths of one fifth. So the average total rent of Cornwall’s tin mines was to that of Peru’s silver mines as thirteen to twelve. But Peru’s silver mines can no longer pay even this low rent. In 1736, the tax on silver was reduced from one fifth to one tenth. Even this silver tax gives more temptation to smuggle than the tax of one twentieth on tin. Smuggling must also be much easier with the precious metal than with the bulky one. Accordingly, the king of Spain’s tax is said to be very poorly paid, while the duke of Cornwall’s is very well paid. Rent therefore probably makes up a greater part of the price of tin at the most productive tin mines than it does of silver at the most productive silver mines in the world. The capital used to work the mines must first be replaced, along with its ordinary profits. What remains for the owner is apparently greater for the coarse metal than for the precious one.

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

The profits of those who operate silver mines in Peru are not usually very great either. The same highly respected and well-informed authors tell us that anyone who opens a new mine in Peru is universally seen as destined for bankruptcy and ruin. For that reason, everyone shuns and avoids them. Mining, it seems, is regarded there much as it is here: as a lottery in which the prizes do not make up for the losing tickets. Yet some prizes are so large that they tempt many adventurers to throw away their fortunes on such unsuccessful projects.

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

The sovereign, however, receives a considerable part of his revenue from silver mines. For this reason, the law in Peru gives every possible encouragement to discovering and working new mines. Anyone who discovers a new mine may mark out a claim 246 feet long and half as wide. The length follows what the discoverer believes to be the direction of the vein. The discoverer owns this portion of the mine and can work it without paying anything to the landowner. The interests of the duke of Cornwall have led to a similar regulation in that ancient duchy. Anyone who discovers a tin mine on waste or unenclosed land may mark out its limits to a certain extent. This is called bounding a mine. The bounder becomes the legal owner of the mine and may work it or lease it to someone else. The bounder needs no consent from the landowner, but must pay the owner a very small fee when the mine is worked. In both regulations, the sacred rights of private property are sacrificed to the supposed interests of public revenue.

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

Peru offers the same encouragement for discovering and working new gold mines. The king’s tax on gold amounts to only one twentieth of the standard rent. It was once a fifth, and later a tenth, as with silver. But even the lower of those two taxes proved too great for the mines to bear. Frezier and Ulloa say it is rare to find someone who has made a fortune from a silver mine. But it is even rarer to find someone who has done so from a gold mine. This one twentieth seems to be the entire rent paid by most gold mines in Chili and Peru. Gold is also much more likely to be smuggled than silver. This is partly because gold is worth more for its size, but also because of how nature produces it. Silver is very seldom found in its pure state. Like most other metals, it is generally combined with another substance. Separating enough silver to cover the expense requires a very laborious and lengthy process. This process can hardly be carried out except in workshops built for that purpose. The workshops are therefore open to inspection by the king’s officers. Gold, by contrast, is almost always found in its pure state. It is sometimes found in fairly large pieces. Even when tiny, almost invisible particles of gold are mixed with sand, earth, and other matter, they can be separated quickly and easily. Anyone with a little mercury can do this in a private house. So if the king’s tax on silver is poorly paid, the tax on gold is likely to be even less well paid. Rent must therefore make up a much smaller part of the price of gold than of silver.

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

The lowest price at which precious metals can be sold for any considerable time is governed by the same principles that fix the lowest ordinary price of all other goods. The same is true of the smallest quantity of other goods for which the metals can be exchanged. This price is determined by the capital normally needed to bring the metals from the mine to the market. It is also determined by the food, clothing, and lodging normally consumed in the process. The price must at least be enough to replace that capital and provide the usual profits.

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

Their highest price, however, seems to depend only on how scarce or plentiful these metals themselves are. It does not depend on the supply of any other commodity. The price of coal, by contrast, depends on the supply of wood. No shortage of coal can ever raise its price above that of wood. But if gold becomes scarce enough, the smallest piece may become more precious than a diamond. It may then be exchanged for a greater quantity of other goods.

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

Demand for these metals comes partly from their usefulness and partly from their beauty. Apart from iron, they are perhaps more useful than any other metals. They are less likely to rust or become impure, so they are easier to keep clean. For this reason, tableware and kitchen utensils are often more pleasant when made from them. A silver boiler is cleaner than one made of lead, copper, or tin. For the same reason, a gold boiler would be even better than a silver one. Their chief merit, however, comes from their beauty. This makes them especially suitable for decorating clothing and furniture. No paint or dye can produce a color as brilliant as gilding. Their scarcity greatly increases the value of their beauty. For most rich people, the chief pleasure of wealth lies in displaying it. In their eyes, that display is most complete when they possess unmistakable signs of wealth that nobody else can possess. They value a useful or beautiful object much more if it is scarce. They also value it more if collecting a substantial amount requires labor that only they can afford to pay for. They are willing to pay more for such objects than for much more beautiful and useful things that are more common. These qualities of usefulness, beauty, and scarcity are the original foundation of these metals' high price. They explain why the metals can be exchanged everywhere for large quantities of other goods. The metals had this value before they were used as coins, and independently of that use. It was this value that made them suitable for use as coins. However, their use as coins created new demand and reduced the amount available for other uses. This may later have helped maintain or increase their value.

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

The demand for precious stones comes entirely from their beauty. They are useful only as ornaments. Their beauty is valued much more because they are scarce and difficult and expensive to extract from mines. As a result, wages and profit usually account for almost all of their high price. Rent accounts for very little, and often none at all. Only the most productive mines yield any substantial rent. When Tavernier, a jeweller, visited the diamond mines of Golconda and Visiapour, he was told that the ruler had ordered all but the mines yielding the largest and finest stones to be closed. The mines were worked for the ruler’s benefit. The others, it seems, were not worth working for their owner.

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

The worldwide prices of precious metals and stones are set by their prices at the most productive mines. So the rent a mine can yield its owner depends on its relative productivity, not its absolute productivity. In other words, it depends on how much more productive the mine is than others of the same kind. Suppose new mines were discovered that surpassed those of Potosi as much as Potosi surpassed those of Europe. The value of silver might fall so much that even the Potosi mines would no longer be worth working. Before the discovery of the Spanish West Indies, Europe's most productive mines may have yielded their owners as much rent as Peru's richest mines do now. Although they produced much less silver, that silver might have exchanged for an equal quantity of other goods. The owner's share might have bought or commanded an equal amount of labor or goods.

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

The value of both the produce and the rent might have been the same. So might the real income they provided to the public and the owner.

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

Even the richest mines of precious metals or gemstones could add little to the world’s wealth. A product valued mainly for its scarcity necessarily loses value when it becomes abundant. A set of silverware and other frivolous ornaments for clothing and furnishings could be purchased with fewer goods. This would be the only advantage the world could gain from that abundance.

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

It is different with land above ground. The value of its produce and its rent depends on its absolute fertility, not its fertility relative to other land. Land that produces a certain amount of food, clothing, and shelter can always feed, clothe, and house a certain number of people. Whatever the landlord's share, it will always give him a proportionate command of those people's labor and the goods that labor can supply. The value of the least fertile land is not reduced by the presence of the most fertile land nearby. On the contrary, it is generally increased. The many people supported by the fertile land provide a market for much of the less fertile land's produce. That produce could never have found a market among the people it could support on its own.

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

Anything that makes land more fertile for growing food increases the value of the improved land. It also helps increase the value of many other lands by creating new demand for their produce. Improved land gives many people more food than they can consume themselves. This abundance of food is the main cause of demand for precious metals and stones. It also creates demand for every other convenience and ornament of clothing, housing, household furniture, and carriages. Food makes up the principal part of the world’s wealth. And it is the abundance of food that gives many other kinds of wealth most of their value. When the Spaniards first discovered Cuba and St. Domingo, their poor inhabitants wore small pieces of gold as ornaments. They wore them in their hair and on other parts of their clothing. They seemed to value these pieces as we would value unusually pretty pebbles. They thought them worth picking up, but not worth refusing to anyone who asked for them. They gave them to their new guests at the first request. They did not seem to think they had given them a very valuable present. They were astonished by the Spaniards’ eagerness to get the gold. Food was always scarce among them. They had no idea that there could be a country where many people had so much food to spare. For a very small quantity of those glittering baubles, such people would willingly give enough to support a whole family for many years. If the inhabitants had understood this, the Spaniards’ passion would not have surprised them.

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

As land is increasingly improved and cultivated, food must become more abundant. This must increase demand for all nonfood products of the land that can be used or serve as ornaments. As improvement progresses, we might therefore expect just one change in the relative values of these two kinds of produce. Produce that sometimes yields rent and sometimes does not should steadily rise in value compared with produce that always yields some rent. As crafts and industry advance, demand should gradually increase for materials used in clothing and housing, useful minerals and other materials from the earth, precious metals, and precious stones. These things should gradually exchange for greater and greater quantities of food. In other words, they should gradually become more and more expensive. This has indeed been the case for most of these things on most occasions. It would have been the case for all of them on every occasion, if particular accidents had not sometimes increased the supply of some of them even more than demand increased.

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

The value of a building stone quarry, for example, will necessarily rise as the surrounding country develops and its population grows. This is especially true if it is the only quarry in the area. But the value of a silver mine will not necessarily rise as its country develops. This is true even if there is no other silver mine within a thousand miles. The market for a building stone quarry’s products can seldom extend more than a few miles around it. Demand will generally be proportional to the development and population of that small district. But the market for a silver mine’s products may extend throughout the known world. Unless the world in general is developing and its population growing, demand for silver might not increase at all. This could be true even if a large country near the mine develops. Even if the world in general were developing, new mines might be discovered during that development. These might be far more productive than any previously known mines. Demand for silver would necessarily increase, but supply might increase by a much greater proportion. As a result, the real price of silver might gradually fall. For example, a given quantity of silver, such as a pound, might gradually buy or command less and less labour. Or it might exchange for less and less grain, the principal part of a labourer’s subsistence.

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

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

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

If general economic progress increased demand in this market, while supply did not increase as much, silver’s value would gradually rise relative to corn. A given amount of silver would buy more and more corn. In other words, the average price of corn in money would gradually fall.

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

If, on the other hand, the supply happened to grow faster than demand for many years, that metal would gradually become cheaper. In other words, despite all improvements, the average money price of grain would gradually rise.

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

But if the supply of that metal increased at nearly the same rate as demand, it would still buy nearly the same amount of corn. The average money price of corn would therefore remain nearly the same, despite all improvements.

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

These three seem to cover all the possible combinations of events that can occur as improvement progresses. If we can judge by what happened in France and Great Britain, all three seem to have occurred in the European market during the four centuries before the present. They also seem to have occurred almost in the order in which I have listed them.

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

A Digression on Changes in the Value of Silver over the Past Four Centuries.

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

First Period. In 1350, and for some time before, the average price of a quarter of wheat in England seems to have been estimated at no less than four ounces of silver by Tower weight. This was equal to about twenty shillings in our present money. The price seems to have fallen gradually to two ounces of silver, equal to about ten shillings in our present money. We find it estimated at that price in the early sixteenth century. It seems to have remained at that estimated price until about 1570.

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

In 1350, the 25th year of Edward III’s reign, Parliament enacted what is called the Statute of Labourers. Its preamble complains bitterly about the insolence of servants who tried to get higher wages from their masters. The statute therefore ordered all servants and labourers to accept the same wages and liveries they had received before. In those days, liveries meant not only clothes but also provisions. The statute set wages and liveries at the levels customary in the king’s 20th year and the four preceding years. For this purpose, the wheat supplied as part of their livery was not to be valued anywhere above tenpence a bushel. Masters could always choose whether to give their servants the wheat or the money. Tenpence a bushel must therefore have been regarded as a very moderate price for wheat in the 25th year of Edward III. A special statute was needed to make servants accept that amount in exchange for their usual livery of provisions. It must also have been regarded as a reasonable price ten years earlier, in the king’s 16th year. That was the earliest year to which the statute referred. But in Edward III’s 16th year, tenpence contained about half an ounce of silver, Tower weight. It was nearly equal to half a crown in our present money. Four ounces of silver, Tower weight, must therefore have been regarded as a moderate price for a quarter of eight bushels. That amount of silver was equal to six shillings and eightpence in the money of those times. It is equal to nearly twenty shillings in present money.

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

This law surely gives better evidence of what was then thought a moderate price for grain than prices from particular years. Historians and other writers generally recorded those prices because they were unusually high or low. They therefore make it difficult to judge the ordinary price. There are also other reasons to believe that wheat normally cost at least four ounces of silver per quarter in the early fourteenth century and for some time before. The prices of other grains were in proportion.

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

In 1309, Ralph de Born, prior of St Augustine’s, Canterbury, gave a feast on the day of his installation. William Thorn preserved not only the menu but also the prices of many items. The feast consumed, first, fifty-three quarters of wheat, which cost nineteen pounds, or seven shillings and twopence a quarter. That was equal to about twenty-one shillings and sixpence in our present money. Second, it consumed fifty-eight quarters of malt, which cost seventeen pounds and ten shillings, or six shillings a quarter. That was equal to about eighteen shillings in our present money. Third, it consumed twenty quarters of oats, which cost four pounds, or four shillings a quarter. That was equal to about twelve shillings in our present money. The prices of malt and oats here seem higher than usual in proportion to the price of wheat.

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

These prices were not recorded because they were unusually high or low. They were mentioned in passing as the prices paid for large quantities of grain consumed at a feast famous for its splendor.

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

In 1262, the 51st year of Henry III’s reign, an ancient statute called the assize of bread and ale was revived. In its preamble, the king says that the statute had been made in the days of his ancestors, former kings of England. It is therefore probably at least as old as the reign of his grandfather, Henry II. It may date back to the Conquest. The statute regulates the price of bread according to the price of wheat. It covers wheat prices ranging from one shilling to twenty shillings per quarter, in the money of those times. But statutes of this kind are generally assumed to provide equally for prices above and below the middle price. On this assumption, ten shillings must have been considered the middle price of a quarter of wheat when the statute was first enacted. Ten shillings contained six ounces of silver by Tower weight and equaled about thirty shillings in our present money. The middle price must also have remained at ten shillings in the 51st year of Henry III’s reign. We cannot, therefore, be very wrong in supposing that the middle price was at least one-third of the highest wheat price covered by the statute. That would be six shillings and eightpence in the money of those times, containing four ounces of silver by Tower weight.

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

These facts therefore give us some reason to draw a conclusion about the average price of a quarter of wheat. Around the middle of the fourteenth century, and for a long time before, it was thought to be at least four ounces of silver, Tower weight.

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

From about the middle of the fourteenth century to the beginning of the sixteenth, wheat’s ordinary or average price seems to have gradually fallen to about half this price. It eventually fell to about two ounces of silver, Tower weight, equal to about ten shillings in our present money. The price continued to be estimated at this level until about 1570.

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

The household book of Henry, the fifth earl of Northumberland, was drawn up in 1512. It gives two different estimates for the price of wheat. One puts it at six shillings and eightpence per quarter, and the other at only five shillings and eightpence. In 1512, six shillings and eightpence contained only two ounces of silver by Tower weight. That was equal to about ten shillings in today’s money.

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

From the 25th year of Edward III’s reign to the beginning of Elizabeth’s reign, more than two hundred years passed. Several statutes show that, throughout this period, six shillings and eightpence was considered the moderate and reasonable price of wheat. In other words, it was considered the ordinary or average price. However, changes to the coinage steadily reduced the amount of silver in that nominal sum. But the value of silver seems to have increased enough to compensate for the reduced quantity. The legislature therefore did not think this change worth its attention.

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

In 1436, a law allowed wheat to be exported without a licence when its price was as low as six shillings and eightpence. In 1463, another law forbade wheat imports unless the price was above six shillings and eightpence per quarter. The legislature believed that exports could cause no harm when the price was so low. But it thought that allowing imports was prudent when the price rose higher. Six shillings and eightpence contained about the same amount of silver as thirteen shillings and fourpence in our present money. That sum in present money contains one-third less silver than the same nominal sum did in Edward III’s time. In those days, six shillings and eightpence was therefore regarded as what is called the moderate and reasonable price of wheat.

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

In 1554, an act passed in the first and second years of Philip and Mary again prohibited wheat exports whenever the price exceeded six shillings and eightpence per quarter. Another act passed in the first year of Elizabeth did the same in 1558. At that time, six shillings and eightpence contained less than two pennyworth more silver than the same sum does now. But it was soon found that restricting wheat exports until the price was so low effectively prohibited them altogether. Therefore, in 1562, an act passed in the fifth year of Elizabeth allowed wheat exports from certain ports whenever the price did not exceed ten shillings per quarter. Ten shillings then contained nearly the same amount of silver as the same sum does now. This price was therefore regarded at the time as the moderate and reasonable price of wheat. It is close to the estimate in the Northumberland book of 1512.

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

Mr Dupré de St Maur and the elegant author of the Essay on the Policy of Grain have both observed a similar pattern in France. There, the average price of grain was much lower in the late fifteenth and early sixteenth centuries than in the previous two centuries. Grain prices probably fell in the same way across most of Europe during that period.

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

The rise in the value of silver relative to corn may have been entirely due to increased demand for silver. As land was improved and cultivated, demand may have risen while the supply stayed the same. Or demand may have stayed the same, while the supply gradually decreased. Most of the mines then known in the world were much depleted, and working them had therefore become much more expensive. The rise in silver’s value may also have been partly due to each of these circumstances. In the late fifteenth and early sixteenth centuries, most of Europe was moving toward more stable government than it had enjoyed for several centuries. Greater security would naturally encourage industry and improvement. As wealth increased, demand for precious metals would naturally rise, as would demand for other luxuries and ornaments. A larger annual output would require more coin to circulate it. More wealthy people would also require more silver plate and other ornaments. It is natural to suppose, too, that most of the mines then supplying silver to the European market might have been greatly depleted and become more expensive to work. Many had been worked since Roman times.

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

However, most writers who have studied ancient commodity prices believed that the value of silver continually declined. They believed this decline lasted from the Conquest, perhaps even from Julius Caesar's invasion, until the discovery of the American mines. They seem to have reached this view partly through their observations of grain prices and the prices of other raw products of the land. They were also influenced by a popular belief about silver. According to this belief, the amount of silver naturally increases as a country grows wealthier, and its value falls as its quantity increases.

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

Three different factors seem to have often misled them when they observed grain prices.

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

First, in ancient times, almost all rents were paid in kind, with a certain quantity of grain, cattle, poultry, and so on. Sometimes, however, the landlord would reserve the right to demand either the annual payment in kind or a fixed sum of money instead. In Scotland, the price used to exchange the payment in kind for money is called the conversion price. The landlord can always choose either the goods or the money. To protect the tenant, therefore, the conversion price must be below rather than above the average market price. In many places, it is accordingly not much more than half the market price. This custom still continues for poultry throughout most of Scotland, and for cattle in some places. It might probably have continued for grain too, had the public fiars not put an end to it. The public fiars are annual valuations of the average price of every kind and quality of grain. A jury makes the valuations according to the actual market prices in each county. This system made it safe enough for the tenant to convert the grain rent into money at each year's fiars price. It was also much more convenient for the landlord than using a fixed price. But writers who have collected ancient grain prices seem often to have mistaken the Scottish conversion price for the actual market price. Fleetwood admits on one occasion that he made this mistake. However, he wrote his book for a particular purpose, and he does not see fit to admit the mistake until he has listed the conversion price fifteen times. The price is eight shillings per quarter of wheat. In 1423, the year with which he begins, this sum contained as much silver as sixteen shillings in our present money. But in 1562, the year with which he ends, it contained no more silver than the same nominal sum does today.

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

Secondly, they have been misled by the careless way some ancient assize laws were copied by lazy scribes. Perhaps the legislature itself sometimes wrote them just as carelessly.

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

The old price-setting laws seem always to have begun by setting prices for bread and ale when wheat and barley were cheapest. They then set prices for bread and ale as the prices of those two grains gradually rose above their lowest levels. But the people who copied these laws often seem to have thought it enough to copy the rules for the first three or four lowest grain prices. This saved them work. I suppose they judged that those rules showed what proportion should be followed at all higher prices.

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

Thus, the assize of bread and ale from the 51st year of Henry III's reign regulated bread prices according to wheat prices. These ranged from one to twenty shillings per quarter, in the money of the time. But copyists had never transcribed the regulation beyond the price of twelve shillings in the manuscripts. All editions of the statutes before Mr Ruffhead's were printed from these manuscripts. Several writers were misled by this faulty transcription. They therefore naturally concluded that the middle price, six shillings per quarter, was the usual or average wheat price at the time. This was equal to about eighteen shillings in our present money.

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

The statute of Tumbrel and Pillory was enacted at nearly the same time. It regulates the price of ale for every sixpence increase in the price of barley, from two shillings to four shillings a quarter. But four shillings was not considered the highest price barley might frequently reach in those times. The prices were only examples of the proportion that should be followed at all other prices, whether higher or lower. We may infer this from the statute’s final words: “Et sic deinceps crescetur vel diminuetur per sex denarios.” The wording is very sloppy, but the meaning is plain enough: “the price of ale is to be increased or decreased in this way for every sixpence rise or fall in the price of barley.” In writing this statute, the legislature itself seems to have been as careless as the copyists who transcribed the other one.

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

An ancient manuscript of the Regiam Majestatem, an old Scottish law book, contains a statute of assize. It sets the price of bread for different wheat prices, from tenpence to three shillings per Scotch boll. A Scotch boll is equal to about half an English quarter. When this assize is thought to have been enacted, three shillings Scotch equaled about nine shillings sterling in our present money. Mr Ruddiman seems to draw a conclusion from this. {See his Preface to Anderson’s Diplomata Scotiae.} He concludes that three shillings was the highest price wheat ever reached in those times. He also concludes that tenpence, a shilling, or at most two shillings, were the usual prices. But the manuscript clearly shows that all these prices are only examples. They show the proportion that should be observed between the prices of wheat and bread. The statute’s final words are “reliqua judicabis secundum praescripta, habendo respectum ad pretium bladi.” They mean: “You shall judge the remaining cases according to what is written above, taking the price of corn into account.”

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

Thirdly, they also seem to have been misled by the very low prices sometimes charged for wheat in ancient times. They seem to have assumed that its ordinary price must also have been much lower than in later times. They drew this conclusion because its lowest price was much lower. Yet they might have found that wheat’s highest price in ancient times was just as far above any later price as its lowest was below it. For 1270, Fleetwood gives two prices for a quarter of wheat. One was four pounds sixteen shillings in the money of that time, equal to fourteen pounds eight shillings in present money. The other was six pounds eight shillings, equal to nineteen pounds four shillings in present money. No recorded price from the late fifteenth or early sixteenth century comes close to these extreme prices. The price of corn is always subject to change. But it varies most in turbulent and disorderly societies. There, interruptions to commerce and communication prevent a plentiful supply in one part of the country from relieving scarcity elsewhere. England was disorderly under the Plantagenets, who ruled from about the middle of the twelfth century until near the end of the fifteenth. One district might have plenty, while another not far away suffered all the horrors of famine. Its crop might have been destroyed by some accident of the weather or by an attack from a neighboring baron. Yet if the lands of a hostile lord lay between the two districts, the first might not be able to give the second any help at all. Under the vigorous rule of the Tudors, no baron was powerful enough to dare disturb public security. The Tudors ruled England during the latter part of the fifteenth century and throughout the sixteenth.

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

At the end of this chapter, the reader will find all the wheat prices Fleetwood collected from 1202 through 1597. I have converted them into present-day money and arranged them chronologically in seven groups of twelve years each. At the end of each group, the reader will also find the average price for those twelve years. From that long period, Fleetwood was able to collect prices for only eighty years. So four years are missing from the final group of twelve. I have therefore added the prices for 1598, 1599, 1600, and 1601 from the accounts of Eton college. This is the only addition I have made. The reader will see that, from the beginning of the thirteenth century until after the middle of the sixteenth, the average price for each twelve-year group gradually falls. Toward the end of the sixteenth century, it begins to rise again. The prices Fleetwood collected, however, seem to have been chiefly those remarkable for extraordinary high or low prices. I do not claim that any very certain conclusion can be drawn from them. But insofar as they prove anything at all, they confirm the account I have been trying to give. Fleetwood himself, however, seems to have shared the belief of most other writers. He believed that throughout this period, the value of silver was continually falling because silver was becoming more abundant. The grain prices he collected certainly do not agree with this opinion. They agree perfectly with the opinion of Mr Dupré de St Maur and with the one I have been trying to explain. Bishop Fleetwood and Mr Dupré de St Maur seem to be the two authors who collected ancient prices most diligently and faithfully. It is somewhat curious that their opinions differ so greatly, yet their facts agree so exactly, at least as far as grain prices are concerned.

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

However, the most perceptive writers have inferred the great value of silver in ancient times mainly from other raw products of land, not from the low price of corn. Corn, they have said, involved a kind of manufacturing. In those early ages, it was therefore much more expensive in proportion than most other goods. I suppose they mean most unmanufactured goods, such as cattle, poultry, and game of all kinds. In those times of poverty and barbarism, these goods were undoubtedly much cheaper than corn in relative terms. But their low price was not caused by the high value of silver. It was caused by the low value of the goods themselves. Silver did not purchase or represent a greater quantity of labor in those times. Rather, those goods purchased or represented much less labor than they did in times of greater wealth and development. Silver must certainly be cheaper in Spanish America than in Europe. It must be cheaper where it is produced than where it is brought after a long journey by land and sea, with freight and insurance costs. Yet Ulloa tells us that, not many years ago, an ox chosen from a herd of three or four hundred cost twenty-one and a half pence sterling in Buenos Ayres. Mr Byron tells us that a good horse cost sixteen shillings sterling in the capital of Chili. The country is naturally fertile, but most of it is entirely uncultivated. Cattle, poultry, and game of all kinds can therefore be obtained with very little labor, and they can purchase or command very little labor in return. Their low price in money does not prove that silver has a very high real value there. It proves that the real value of those goods is very low.

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

We must always remember that labor is the true measure of the value of silver and all other commodities. No particular commodity or group of commodities is the true measure.

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

But in countries that are largely unsettled or thinly populated, cattle, poultry, game of all kinds, and so on occur naturally. Nature often produces far more of them than the inhabitants need for consumption. In such conditions, supply usually exceeds demand. Therefore, at different stages of society and development, such goods will be equivalent to very different amounts of labor.

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

In every state of society and at every stage of progress, grain is produced by human labor. But the average output of every kind of work always matches average consumption more or less closely. In other words, average supply matches average demand. Also, at every stage of progress, growing equal quantities of grain in the same soil and climate requires nearly equal amounts of labor on average. Or, what amounts to the same thing, it requires nearly equal spending on labor. As farming improves, labor becomes more productive. But the continually rising price of cattle, the main tools of agriculture, more or less offsets this gain. For all these reasons, we can be sure that equal quantities of grain represent nearly equal amounts of labor. This holds in every state of society and at every stage of progress. Grain represents equal amounts of labor more closely than equal quantities of any other raw produce of the land. As already noted, grain is therefore a more accurate measure of value than any other commodity or group of commodities. This holds at every stage of wealth and progress. At all these stages, we can therefore better judge the real value of silver by comparing it with grain than by comparing it with any other commodity or group of commodities.

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

Grain, or whatever other plant food people commonly prefer, is the main food of workers in every civilized country. As agriculture expands, every country’s land produces much more plant food than animal food. Workers everywhere therefore live mainly on the wholesome food that is cheapest and most plentiful. Meat from butchers makes up only a small part of their diet, except in the most prosperous countries or where workers are paid the most. Poultry makes up an even smaller part, and wild game makes up none at all. In France, the working poor seldom eat meat from butchers except on holidays and other special occasions. The same is true in Scotland, even though workers are paid somewhat better there than in France. The money price of labor therefore depends much more on the average money price of grain, the worker’s main food, than on the price of meat from butchers or any other raw product of the land. The real value of gold and silver is the actual amount of labor they can buy or command. Their real value therefore depends much more on the amount of grain they can buy or command than on the amount of meat from butchers or any other raw product of the land.

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

However, these brief observations about the prices of grain and other goods would probably not have misled so many intelligent authors on their own. Those authors were also influenced by a popular belief about silver and wealth. According to this belief, the amount of silver naturally grows as a country becomes wealthier. And as the amount of silver grows, its value falls. This belief, however, seems to be entirely groundless.

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

The amount of precious metals in a country may increase for two reasons. First, the mines that supply it may become more productive. Second, the people may become wealthier as their annual labour produces more. The first cause is certainly linked to a decrease in the value of precious metals, but the second is not.

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

When richer mines are discovered, more precious metals are brought to market. But the amount of necessities and comforts available in exchange remains the same. As a result, the same quantity of precious metals must be exchanged for fewer goods. So, when the quantity of precious metals in a country increases because mines are richer, their value necessarily falls somewhat.

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

When a country's wealth increases, by contrast, its labor produces more and more each year. More coins are needed to circulate the growing quantity of goods. As people can afford it, and have more goods to exchange for it, they will naturally buy more and more gold and silver plate. The quantity of coins will increase out of necessity. The quantity of plate will increase out of vanity and display. It will increase for the same reason that fine statues, paintings, and other luxuries and curiosities are likely to become more plentiful. But sculptors and painters are not likely to be paid less in times of wealth and prosperity than in times of poverty and hardship. Likewise, gold and silver are not likely to fetch a lower price.

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

The price of gold and silver naturally rises as a country grows wealthier, unless the chance discovery of richer mines keeps it down. Whatever the state of the mines, their price is always naturally higher in a rich country than in a poor one. Gold and silver, like all other commodities, naturally seek the market that offers the best price. And the best price for anything is usually offered by the country best able to afford it. We must remember that labour is the ultimate price paid for everything. Where labour is equally well rewarded, its price in money will reflect the price of the worker's necessities. But gold and silver will naturally exchange for more necessities in a rich country than in a poor one. They will exchange for more where necessities are plentiful than where supplies are only moderate. If two countries are far apart, the difference may be very great. The metals naturally flow from the worse market to the better one. But it may be difficult to transport enough of them to make their prices nearly equal in both countries. If the countries are close together, the difference will be smaller and may sometimes be barely noticeable. In that case, transportation will be easy. China is much richer than any part of Europe, and the difference in the price of necessities is very great. Rice in China is much cheaper than wheat anywhere in Europe. England is much richer than Scotland, but the difference in the money price of grain is much smaller and barely noticeable. By quantity or measure, Scottish grain generally appears much cheaper than English grain. But considering its quality, it is certainly somewhat more expensive. Scotland receives very large supplies from England almost every year. Any commodity must usually cost somewhat more in the country it is brought to than in the country it comes from. English grain must therefore be more expensive in Scotland than in England. Yet, considering its quality, it cannot usually be sold there for more than the Scottish grain it competes with. Its quality means the quantity and quality of the flour or meal that can be made from it.

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

The difference in money wages between China and Europe is even greater than the difference in the money cost of necessities. This is because workers receive more in real terms in Europe than in China. Most of Europe is growing wealthier, while China seems to be standing still. Money wages are lower in Scotland than in England because workers receive much less in real terms. Although Scotland is growing wealthier, it is advancing much more slowly than England. People often emigrate from Scotland, but rarely from England. This is sufficient proof that the demand for labor differs greatly between the two countries. We must remember that differences in workers’ real pay across countries are naturally determined by whether those countries are advancing, standing still, or declining, not by their actual wealth or poverty.

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

Gold and silver naturally have the greatest value among the richest nations and the least value among the poorest. Among savages, the poorest of all nations, gold and silver have hardly any value.

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

In large towns, grain is always more expensive than in remote parts of the country. This is not because silver is really cheaper, but because grain is really more expensive. Bringing silver to a large town takes no less labor than bringing it to remote parts of the country. But bringing grain to a large town takes much more labor.

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

In some very rich trading countries, such as Holland and the territory of Genoa, grain is expensive for the same reason it is expensive in large towns. They do not produce enough to feed their inhabitants. They are rich in the industry and skill of their craftspeople and manufacturers. They have all kinds of machinery to make work easier and faster. They also have ships and all the other tools and means of transport and trade. But they are poor in grain, which must be brought from distant countries. Its price must therefore include the cost of transporting it. It takes no less labor to bring silver to Amsterdam than to Dantzic. But it takes a great deal more labor to bring grain. The real cost of silver must be nearly the same in both places, but the real cost of grain must be very different. Suppose the real wealth of Holland or the territory of Genoa declines, while its population remains the same. Its ability to obtain supplies from distant countries would decline too. The amount of silver it possessed would necessarily fall, either as a cause or an effect of this decline. But instead of falling along with the amount of silver, the price of grain would rise to famine levels. When we lack necessities, we must give up all luxuries. The value of luxuries rises in times of wealth and prosperity, but falls in times of poverty and distress. Necessities are different. Their real price, the amount of labor they can buy or command, rises in times of poverty and distress. It falls in times of wealth and prosperity. Such times are always times of great abundance, because otherwise they could not be times of wealth and prosperity. Grain is a necessity, but silver is only a luxury.

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

Therefore, wealth and economic progress may have increased the quantity of precious metals between the mid-fourteenth and mid-sixteenth centuries. But any such increase could not have tended to reduce their value in Great Britain or anywhere else in Europe. Those who collected records of ancient prices may have found no reason to infer that silver’s value fell during this period. If their observations of grain or other commodity prices gave them no such reason, then supposed increases in wealth and economic progress gave them even less reason to draw that conclusion.

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

Second Period. Scholars may have held different opinions about how the value of silver changed during the first period. But they agree about how it changed during the second.

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

From about 1570 to about 1640, roughly seventy years, the relative values of silver and corn moved in the opposite direction. Silver fell in real value, meaning that it could be exchanged for less labor than before. Corn rose in nominal price. Instead of commonly selling for about two ounces of silver per quarter, it came to sell for six to eight ounces. In our present money, its price rose from about ten shillings to about thirty to forty shillings per quarter.

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

The discovery of America’s abundant mines seems to have been the only cause of silver’s decline in value compared with corn. Everyone explains the decline in the same way. No one has ever disputed either the fact or its cause. During this period, industry and economic development were advancing across most of Europe. Demand for silver must therefore have been increasing. But the supply seems to have increased so much faster than demand that silver’s value fell considerably. It is worth noting that the discovery of the American mines seems to have had no noticeable effect on prices in England until after 1570. Yet even the mines of Potosi had been discovered more than twenty years earlier.

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

Eton college’s accounts show the average price of the best wheat at Windsor market from 1595 through 1620. Over those years, a quarter of nine bushels cost £2:1:6 9/13. Ignoring the fraction and deducting one ninth, or 4s. 7 1/3d., gives a price of £1:16:10 2/3 for a quarter of eight bushels. Again, ignoring the fraction and deducting one ninth, or 4s. 1 1/9d., accounts for the difference between the prices of the best and middle wheat. This puts the price of the middle wheat at about £1:12:8 8/9, or about six and one-third ounces of silver.

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

The same accounts show that, from 1621 through 1636, the same measure of the best wheat averaged £2:10s. at the same market. Making the same deductions as in the previous case, the average price of a quarter of eight bushels of middle wheat was £1:19:6, or about seven and two-thirds ounces of silver.

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

Third Period. Between 1630 and 1640, around 1636, the discovery of mines in America appears to have finished lowering silver’s value. Silver’s value relative to corn seems never to have fallen below its level at that time. It seems to have risen somewhat during the present century. It had probably begun to rise even before the end of the previous century.

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

From 1637 through 1700, the last 64 years of the previous century, the same accounts show the average price at Windsor market. A quarter of nine bushels of the best wheat cost £2:11:0 1/3. This was only 1s. 0 1/3d. more than during the previous sixteen years. But two events occurred during those 64 years. They must have caused a much greater scarcity of grain than the seasons alone would have caused. These events more than explain the very small rise in price, without assuming any further fall in silver’s value.

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

The first of these events was the civil war. By discouraging farming and disrupting trade, it must have raised the price of grain well above what the seasons alone would have caused. The war must have had this effect to some degree in every market in the kingdom. But it must have had a greater effect in markets near London, which had to be supplied from the greatest distances. The same records show that the best wheat cost £4 and 5 shillings per quarter of nine bushels at Windsor market in 1648. In 1649, it cost £4 per quarter. For the sixteen years before 1637, the average price had been £2 and 10 shillings. The amounts by which the prices in those two years exceeded that average add up to £3 and 5 shillings. Spread over the last sixty-four years of the previous century, that excess alone would nearly account for the small price increase that appears to have occurred during those years. These were the highest prices, but they were by no means the only high prices apparently caused by the civil wars.

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

The second event was the bounty on grain exports, granted in 1688. Many people have thought that the bounty encouraged cultivation. Over many years, it may therefore have increased the supply of grain and lowered its price at home. I will examine later how far the bounty could produce this effect at any time. For now, I will only observe that it had no time to do so between 1688 and 1700. During this short period, its only effect must have been to raise grain prices at home. It encouraged the export of each year's surplus, preventing abundance in one year from making up for scarcity in another. England suffered scarcity from 1693 through 1699. This was no doubt mainly due to bad weather, and the scarcity extended across a considerable part of Europe. But the bounty must have made it somewhat worse. Accordingly, in 1699, further grain exports were prohibited for nine months.

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

A third event occurred during the same period. It could not have caused a shortage of corn. Nor, perhaps, could it have increased the actual amount of silver usually paid for corn. But it must have increased the nominal sum paid. This event was the serious debasement of silver coins through clipping and wear. The problem began during the reign of Charles II and grew steadily worse until 1695. By then, as Mr Lowndes tells us, silver coins in circulation were worth almost 25 percent below their standard value on average. But the nominal sum that makes up the market price of any commodity is necessarily regulated by actual experience. It depends less on the amount of silver the coins should contain by the standard than on the amount they actually contain. Therefore, the nominal sum is necessarily higher when coins are badly debased by clipping and wear than when they are close to their standard value.

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

During this century, silver coins have never been further below their standard weight than they are now. But although they are badly worn, their value has been supported by the gold coins exchanged for them. Before the recent recoinage, gold coins were also badly worn, but less so than silver coins. In 1695, by contrast, gold coins did not support the value of silver coins. A guinea then commonly exchanged for thirty shillings in worn and clipped silver coins. Before the recent recoinage of gold, silver bullion seldom cost more than five shillings and sevenpence an ounce. That was only fivepence above the mint price. But in 1695, the usual price of silver bullion was six shillings and fivepence an ounce, {Lowndes’s Essay on the Silver Coin, 68.} or fifteen pence above the mint price. Even before the recent recoinage of gold, therefore, gold and silver coins together were thought to be no more than eight percent below their standard value, compared with silver bullion. In 1695, by contrast, they were thought to be nearly twenty-five percent below that value. But at the beginning of this century, immediately after the great recoinage in King William’s time, most silver coins in circulation must still have been closer to their standard weight than they are now. During this century, there has also been no great public calamity, such as a civil war, to discourage farming or interrupt trade within the country. The bounty in effect for most of the century must always raise the price of corn somewhat above what it would otherwise be, given the existing state of farming. But the bounty has had enough time to produce all the good effects commonly attributed to it. These are encouraging farming and thereby increasing the quantity of corn in the home market. On the principles of a system I will explain and examine later, the bounty may therefore be supposed to have lowered the price somewhat in this way, while raising it in the other. Many people suppose that it has done more. According to Eton college’s records, the average price of a quarter of nine bushels of the best wheat at Windsor market was £2:0:6 10/32 during the first sixty-four years of this century. This was about ten shillings and sixpence, or more than twenty-five percent, cheaper than during the last sixty-four years of the previous century. It was about nine shillings and sixpence cheaper than during the sixteen years before 1636. By then, the discovery of the abundant mines of America may be supposed to have had its full effect. It was also about one shilling cheaper than during the twenty-six years before 1620. The discovery can hardly be supposed to have had its full effect before then. According to this account, the average price of middle-quality wheat during the first sixty-four years of this century was about thirty-two shillings per quarter of eight bushels.

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

The value of silver therefore seems to have risen somewhat relative to corn during this century. It probably began to rise before the end of the last century.

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

In 1687, a quarter of nine bushels of the best wheat cost £1:5:2 at Windsor market. This was its lowest price since 1595.

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

In 1688, Mr Gregory King was famous for his knowledge of such matters. He estimated the average price of wheat paid to growers in years of moderate abundance. It was 3 shillings and 6 pence per bushel, or 28 shillings per quarter. I understand the grower’s price to be the same as what is sometimes called the contract price. This is the price at which a farmer agrees to deliver a fixed quantity of grain to a dealer over a set number of years. Such a contract saves the farmer the expense and trouble of selling at market. The contract price is therefore generally lower than the estimated average market price. Mr King judged that 28 shillings per quarter was then the usual contract price in years of moderate abundance. I have been assured that, before the scarcity caused by the recent extraordinary run of bad seasons, it was the usual contract price in all ordinary years.

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

In 1688, Parliament granted a bounty on exported corn. Country gentlemen then made up an even greater share of the legislature than they do now. They had noticed that the money price of corn was falling. The bounty was a way to raise it artificially. It aimed to restore the high prices often paid in the reigns of Charles I. and II. The bounty was therefore to remain in effect until wheat reached 48 shillings a quarter. That was 20 shillings, or 5-7ths, higher than Mr King’s estimate that same year. He had estimated what growers received in times of moderate plenty. His calculations have won widespread respect. If they deserve any part of that reputation, a price of 48 shillings a quarter could not then have been expected without some measure like the bounty, except in years of extraordinary scarcity. But King William’s government was not yet firmly established. It could not afford to refuse the country gentlemen anything. At that very time, it was asking them to establish the annual land tax for the first time.

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

The value of silver relative to corn had therefore probably risen somewhat before the end of the last century. It seems to have continued rising through most of the present century. But the bounty must have made that rise less noticeable than it otherwise would have been, given the actual state of farming.

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

In years of abundant harvests, the bounty causes unusually large exports. This necessarily raises the price of grain above what it would otherwise be in those years. The stated aim of the bounty was to encourage farming by keeping grain prices up, even in the most abundant years.

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

In years of severe scarcity, the bounty was generally suspended. Even so, it must have affected prices in many of those years. In years of plenty, the bounty causes unusually large exports. This must often prevent the abundance of one year from making up for the scarcity of another.

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

In both plentiful and scarce years, therefore, the bounty raises grain prices above their natural level under current farming conditions. Suppose, then, that the average price was lower during the first 64 years of this century than during the last 64 years of the previous century. If farming conditions had remained the same, the price would have been much lower still without the bounty.

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

But it may be said that, without the bounty, the state of farming would not have been the same. I will try to explain the bounty’s effects on the country’s agriculture later, when I discuss bounties in particular. For now, I will only note that the rise in the value of silver relative to corn was not unique to England. Three very reliable, diligent, and hardworking collectors of corn prices observed the same rise in France. It occurred during the same period and in nearly the same proportion. They were Mr Dupré de St Maur, Mr Messance, and the author of the Essay on the Police of Grain. But until 1764, French law prohibited the export of grain. Despite this prohibition, the price fell in France by nearly as much as it did in England. It is somewhat difficult to suppose that, in England, the fall was due to the extraordinary encouragement given to exports.

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

Perhaps it would be more accurate to explain this change in the average money price of corn another way. It may have resulted from a gradual rise in the real value of silver in the European market, rather than a fall in the real average value of corn. As already noted, corn is a more accurate measure of value over long periods than silver. It may also be more accurate than any other commodity. After the discovery of the abundant mines of America, the money price of corn rose to three or four times its former level. Everyone attributed this change not to a rise in the real value of corn, but to a fall in the real value of silver. During the first sixty-four years of the present century, the average money price of corn fell somewhat below its level for most of the last century. If so, we should similarly attribute the change not to a fall in the real value of corn, but to some rise in the real value of silver in the European market.

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

The high price of grain over the past ten or twelve years has raised a suspicion. Some suspect that the real value of silver is still falling in the European market. But the high price of grain seems clearly to have resulted from extraordinarily bad weather. It should therefore be regarded as a temporary and occasional event, not a permanent one. For the past ten or twelve years, the weather has been unfavorable across most of Europe. The disturbances in Poland have greatly increased the scarcity in countries that used to obtain grain from that market in expensive years. Such a long run of bad seasons is not very common, but it is by no means unique. Anyone who has studied grain prices in earlier times will readily recall several similar examples. Ten years of extraordinary scarcity are no more remarkable than ten years of extraordinary abundance. The low price of grain from 1741 to 1750, inclusive, offers a useful contrast to its high price over the last eight or ten years. According to Eton college’s records, the average price of a nine-bushel quarter of the best wheat at Windsor market was only £1:13:9 4/5 from 1741 to 1750. That is nearly 6s.3d. below the average price for the first sixty-four years of the present century. According to the same records, the average price of an eight-bushel quarter of medium-quality wheat during those ten years was only £1:6:8.

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

Between 1741 and 1750, however, the export bounty must have kept the price of corn in the home market higher than it would naturally have been. Customs records show that, during those ten years, exports of all kinds of grain amounted to at least 8,029,156 quarters and one bushel. The bounty paid for these exports amounted to £1,514,962:17:4 1/2. Accordingly, in 1749, Mr Pelham, then prime minister, told the House of Commons that an extraordinarily large sum had been paid in corn export bounties over the preceding three years. He had good reason to make this observation, and he would have had even better reason the following year. In that single year, the bounty paid amounted to no less than £324,176:10:6. {See Tracts on the Corn Trade, Tract 3,} It is unnecessary to point out how much these forced exports must have raised the price of corn in the home market above what it otherwise would have been.

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

At the end of the accounts attached to this chapter, the reader will find a separate account of those ten years. There is also a separate account of the preceding ten years. Their average is also below the general average for the first sixty-four years of the century, though not as far below it. The year 1740, however, was a year of extraordinary scarcity. The twenty years before 1750 can reasonably be compared with the twenty years before 1770. The first twenty years were well below the general average for the century, despite one or two expensive years. The second twenty years were well above it, despite one or two cheap years, such as 1759. If the first period was not as far below the general average as the second was above it, we should probably attribute the difference to the bounty. The change was evidently too sudden to be attributed to a change in the value of silver. Such changes are always slow and gradual. The sudden effect can be explained only by a cause that can act suddenly: accidental variations in the seasons.

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

The money price of labour in Great Britain has indeed risen during this century. But this seems to be due less to a fall in the value of silver in the European market than to increased demand for labour in Great Britain. That demand has arisen from the country’s great and almost universal prosperity. France is not altogether as prosperous. There, since the middle of the last century, the money price of labour has been observed to fall gradually along with the average money price of grain. In both the last century and this one, the daily wages of ordinary labourers in France are said to have remained fairly consistently at about one twentieth of the average price of a septier of wheat. A septier is a measure containing a little more than four Winchester bushels. As already shown, the real reward for labour in Great Britain has increased considerably during this century. Labourers receive larger quantities of the necessities and conveniences of life. The rise in the money price of labour seems to be the result of a rise in its real price in the particular market of Great Britain. It does not seem to be due to a fall in the value of silver in the general European market. The rise in the real price of labour is due to the country’s especially fortunate circumstances.

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

For some time after America was first discovered, silver would continue to sell at or near its former price. Mining profits would remain very high for a time, well above their natural rate. But those who imported silver into Europe would soon find that they could not sell the entire annual supply at this high price. Silver would gradually exchange for smaller and smaller quantities of goods. Its price would continue to fall until it reached its natural price. That price would be just enough to pay the wages of labor, profits on capital, and rent on land, all at their natural rates, needed to bring silver from the mine to the market. As already noted, the tax imposed by the king of Spain consumes the entire rent of the land at most silver mines in Peru. The tax amounts to a tenth of the total output. Originally, it was half. Soon afterward it fell to a third, then to a fifth, and finally to a tenth, where it remains. At most silver mines in Peru, this tax seems to be all that remains after the mine operator's capital and ordinary profits have been paid. These profits were once very high. Now, everyone seems to agree that they are as low as they can be while the mines remain in operation.

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

In 1504, the king of Spain’s tax was reduced to one-fifth of the registered silver {Solorzano, vol, ii.}. This was 41 years before the mines of Potosi were discovered in 1545. By 1636, these mines had 90 years to produce their full effect. They were the most productive mines in all America. In that time, they could have reduced silver’s value in the European market to its lowest possible level while the tax remained in place. Ninety years is enough time to bring any commodity not subject to a monopoly down to its natural price. This is the lowest price at which the commodity can continue to be sold for any considerable time while subject to a particular tax.

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

The price of silver in the European market might perhaps have fallen even lower. It might then have become necessary to reduce the tax on silver. The tax had been reduced to one tenth in 1736, but it might have needed to fall to one twentieth, as with gold. Otherwise, most American mines now in operation might have had to be abandoned. The gradual increase in demand for silver, or the gradual expansion of the market for silver from American mines, probably prevented this. It has not only maintained the value of silver in the European market. It has perhaps even raised the value somewhat above its level around the middle of the last century.

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

Since America was first discovered, the market for silver from its mines has gradually expanded.

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

First, Europe’s market has gradually grown larger. Since the discovery of America, most of Europe has made great progress. England, Holland, France, and Germany have advanced considerably in both agriculture and manufacturing. Even Sweden, Denmark, and Russia have done the same. Italy does not seem to have declined. Its decline came before the conquest of Peru. Since then, Italy seems instead to have recovered a little. Spain and Portugal, however, are thought to have declined. Portugal is only a very small part of Europe, though. And Spain’s decline is perhaps not as great as people commonly imagine. In the early sixteenth century, Spain was a very poor country, even compared with France. France has improved greatly since then. Emperor Charles V, who traveled frequently through both countries, made a well-known remark. He said that France had plenty of everything, while Spain lacked everything. Europe’s growing agricultural and manufactured output must have required a gradual increase in silver coin to circulate it. The growing number of wealthy people must also have required more silver plate and other silver ornaments.

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

Secondly, America is itself a new market for the output of its own silver mines. Its agriculture, industry, and population are growing much faster than those of the most thriving countries in Europe. Its demand for silver must therefore increase much faster too. The English colonies are an entirely new market. Across a great continent where there was no demand for silver before, they need an ever-growing supply, partly for coins and partly for silverware. Most of the Spanish and Portuguese colonies are also entirely new markets. Before Europeans discovered New Granada, the Yucatan, Paraguay, and the Brazils, savage nations inhabited them. These nations had neither arts nor agriculture. Both have now been introduced to a considerable degree in all of those places. Even Mexico and Peru, though not entirely new markets, are certainly much larger markets than they ever were before. Many wonderful tales have been published about their splendid state in ancient times. Yet anyone who reads the history of their first discovery and conquest with sober judgment will see something quite different. Their inhabitants were much more ignorant of arts, agriculture, and commerce than the Tartars of the Ukraine are today. Even the Peruvians, the more civilized of the two nations, had no coined money of any kind. They used gold and silver as ornaments, but carried on all their commerce by barter. As a result, there was hardly any division of labour among them. Those who farmed the land had to build their own houses and make their own household furniture. They also had to make their own clothes, shoes, and farming tools. The few craftspeople among them were said to be supported entirely by the sovereign, the nobles, and the priests. They were probably their servants or slaves. The ancient arts of Mexico and Peru have never supplied Europe with a single manufactured product. The Spanish armies hardly ever exceeded five hundred men and often had fewer than half that number. Yet almost everywhere they found it very difficult to obtain food. They are said to have caused famines almost wherever they went, even in countries described as populous and well cultivated. These famines sufficiently show that the account of their large populations and advanced cultivation is largely a fable. The government of the Spanish colonies is in many respects less favourable to agriculture, improvement, and population growth than that of the English colonies. Yet the Spanish colonies seem to be advancing in all these respects much faster than any country in Europe. In a fertile soil and favourable climate, land is abundant and cheap, as it is in all new colonies. This advantage seems great enough to make up for many defects in civil government. Frezier, who visited Peru in 1713, reported that Lima had between twenty-five and twenty-eight thousand inhabitants. Ulloa, who lived in the same country between 1740 and 1746, reported that it had more than fifty thousand. Their accounts of the populations of several other principal towns in Chili and Peru differ by nearly the same proportion. There seems to be no reason to doubt that either was well informed. Their accounts therefore indicate growth hardly less than that of the English colonies. America is therefore a new market for the output of its own silver mines. Its demand for silver must increase much faster than that of the most thriving country in Europe.

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

Thirdly, the East Indies is another market for the silver produced by the American mines. Since those mines were first discovered, the East Indies has absorbed increasing quantities of silver. Direct trade between America and the East Indies, carried on by the Acapulco ships, has continually grown since then. Indirect trade through Europe has grown in an even greater proportion. During the sixteenth century, the Portuguese were the only European nation to trade regularly with the East Indies. In the final years of that century, the Dutch began to challenge this monopoly. Within a few years, they drove the Portuguese out of their principal settlements in India. For most of the last century, these two nations shared the largest part of the East India trade. Dutch trade grew continually, and in a greater proportion than Portuguese trade declined. The English and French carried on some trade with India in the last century. But their trade has greatly increased during the present century. The Swedes and Danes also began trading with the East Indies during the present century. Even the Muscovites now trade regularly with China. They do so by means of caravans that travel overland through Siberia and Tartary to Pekin. The East India trade of all these nations has grown almost continually, except for that of the French. The last war nearly destroyed French trade. Europe’s consumption of East India goods seems to be growing enough to provide gradually increasing employment for them all. Tea, for example, was a drug used very little in Europe before the middle of the last century. At present, the English East India company imports more than a million and a half worth of tea annually for its own countrymen. Even this is not enough. Much more is constantly smuggled into the country from ports in Holland and from Gottenburgh in Sweden. Tea was also smuggled from the coast of France as long as the French East India company prospered. Consumption of Chinese porcelain, Moluccas spices, Bengal piece goods, and countless other articles has increased in almost the same proportion. Accordingly, the tonnage of all European ships engaged in the East India trade at any one time during the last century was perhaps not much greater than that of the English East India company before its recent reduction in shipping.

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

But in the East Indies, especially in China and Indostan, precious metals were worth much more than in Europe when Europeans first began trading with those countries. They are still worth more there. Rice-growing countries generally produce two crops a year, and sometimes three. Each crop is more plentiful than any ordinary crop of grain. So these countries must have much more food than grain-growing countries of the same size. They are therefore much more populous. The rich in these countries also have a greater surplus of food beyond what they can consume themselves. So they can afford to buy much more of other people's labor. By all accounts, a grandee in China or Indostan has a much larger and more splendid retinue than the richest subjects in Europe. The same surplus of food also lets the rich offer more for rare and exceptional products that nature supplies in very small quantities. These include precious metals and precious stones, which the rich compete so eagerly to acquire. So even if the mines supplying the Indian market had been as plentiful as those supplying Europe, these commodities would naturally have exchanged for more food in India than in Europe. But the mines supplying the Indian market with precious metals seem to have been considerably less plentiful than those supplying Europe. The mines supplying it with precious stones seem to have been considerably more plentiful. Precious metals would therefore naturally exchange in India for somewhat more precious stones and much more food than in Europe. The money price of diamonds, the greatest of all luxuries, would be somewhat lower in India than in Europe. The money price of food, the first of all necessities, would be much lower. But as already noted, the real price of labor is lower in both China and Indostan, the two great markets of India, than in most of Europe. By real price, I mean the actual quantity of necessities given to the worker. A worker's wages there will buy less food. And because the money price of food is much lower in India than in Europe, the money price of labor is lower there for two reasons. Wages buy less food, and that food costs less. But in countries with equal skill and industry, the money price of most manufactured goods will be proportional to the money price of labor. China and Indostan seem to be inferior to Europe in manufacturing skill and industry, but not by much. The money price of most manufactured goods will therefore naturally be much lower in those great empires than anywhere in Europe. In most of Europe, too, the cost of transport by land greatly increases both the real and the money price of most manufactured goods. It takes more labor, and therefore more money, to bring the raw materials to the manufacturer and then the finished goods to market. In China and Indostan, the extensive and varied inland waterways save most of this labor and consequently most of this money. They thus reduce both the real and the money price of most manufactured goods even further. For all these reasons, precious metals have always been, and still are, extremely profitable to carry from Europe to India. There is hardly any commodity that brings a better price there. Nor is there hardly any that, for the labor and goods it costs in Europe, will buy or command more labor and goods in India. It is also more profitable to carry silver there than gold. In China and most other Indian markets, the ratio of pure silver to pure gold is only ten to one, or at most twelve to one. In Europe, it is fourteen or fifteen to one. In China and most other Indian markets, ten or at most twelve ounces of silver will buy an ounce of gold. In Europe, it takes fourteen to fifteen ounces. Silver has therefore generally been one of the most valuable items in the cargoes of most European ships sailing to India. It is the most valuable item on the Acapulco ships sailing to Manilla. In this way, silver from the new continent seems to be one of the main commodities used in trade between the two ends of the old continent. It is largely through silver that these distant parts of the world are connected.

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

To supply such a vast market, the silver brought from mines each year must meet two needs. It must be enough to support the continuing increase in coins and silverware needed in all thriving countries. It must also replace the silver continually lost or used up in all countries where silver is used.

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

The continual loss of precious metals from coins through wear is considerable. So is the loss from plate through wear and cleaning. These metals are so widely used that this gradual loss alone would require a very large annual supply. Some manufactures also consume precious metals, perhaps no more in total than this gradual loss. But their consumption is much more noticeable because it is much faster. Birmingham manufactures alone are said to use more than fifty thousand pounds sterling worth of gold and silver annually for gilding and plating. Once used this way, the metals can never again appear as gold and silver. From this we can form some idea of the annual consumption throughout the world. Metals are used in manufactures like those of Birmingham, as well as in lace, embroidery, gold and silver fabrics, and the gilding of books, furniture, and other things. A considerable quantity must also be lost each year while being transported from place to place by sea and land. Moreover, in most countries of Asia, the almost universal custom of burying treasure must cause an even greater loss. Knowledge of where the treasure is buried often dies with the person who hid it.

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

According to the best accounts, about six million pounds' worth of gold and silver is imported annually through Cadiz and Lisbon. This includes both registered imports and what may be smuggled in.

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

According to Mr Meggens {Postscript to the Universal Merchant, pp. 15 and 16. This postscript was not printed until 1756, three years after the book was published. The book has never had a second edition. The postscript is therefore found in few copies. It corrects several errors in the book.}, the annual imports of precious metals into Spain and Portugal averaged 1,101,107 pounds of silver and 49,940 pounds of gold. The Spanish average covers six years, from 1748 through 1753. The Portuguese average covers seven years, from 1747 through 1753. At sixty-two shillings per pound troy, the silver amounts to £3,413,431:10s. sterling. At forty-four and a half guineas per pound troy, the gold amounts to £2,333,446:14s. sterling. Together, they amount to £5,746,878:4s. sterling. He assures us that the record of registered imports is exact. He details the places from which the gold and silver came. He also gives the registered quantity of each metal supplied by each place. He makes an allowance for the quantity of each metal he thinks may have been smuggled. This judicious merchant's great experience gives his opinion considerable weight.

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

The author of the Philosophical and Political History of the Establishment of the Europeans in the two Indies is eloquent and sometimes well informed. He says that Spain’s registered imports of gold and silver averaged 13,984,185 3/5 piastres of ten reals a year. This average covers the eleven years from 1754 through 1764. But he supposes that the total annual imports may have reached seventeen million piastres, including what may have been smuggled. At 4s. 6d. per piastre, this equals £3,825,000 sterling. He also lists the places from which the gold and silver came. For each place, he gives the quantities of each metal recorded in the register. He also tells us how much gold was imported annually from the Brazils to Lisbon, judging by the tax paid to the king of Portugal. The tax, it seems, is one-fifth of the standard metal. On that basis, we might value the gold at eighteen million cruzadoes, or forty-five million French livres, equal to about twenty million pounds sterling. But he says we may safely add another eighth, or £250,000 sterling, to account for what may have been smuggled. This brings the total to £2,250,000 sterling. According to this account, then, the total annual imports of precious metals into Spain and Portugal amount to about £6,075,000 sterling.

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

I have been told that several other well-verified accounts, though handwritten, agree on the total annual imports. They put the average at about six million pounds sterling, sometimes a little more and sometimes a little less.

The annual importation of the precious metals into Cadiz and Lisbon, indeed, is not equal to the whole annual produce of the mines of America. Some part is sent annually by the Acapulco ships to Manilla; some part is employed in a contraband trade, which the Spanish colonies carry on with those of other European nations; and some part, no doubt, remains in the country. The mines of America, besides, are by no means the only gold and silver mines in the world. They, are, however, by far the most abundant. The produce of all the other mines which are known is insignificant, it is acknowledged, in comparison with theirs; and the far greater part of their produce, it is likewise acknowledged, is annually imported into Cadiz and Lisbon. But the consumption of Birmingham alone, at the rate of fifty thousand pounds a-year, is equal to the hundred-and-twentieth part of this annual importation, at the rate of six millions a-year. The whole annual consumption of gold and silver, therefore, in all the different countries of the world where those metals are used, may, perhaps, be nearly equal to the whole annual produce. The remainder may be no more than sufficient to supply the increasing demand of all thriving countries. It may even have fallen so far short of this demand, as somewhat to raise the price of those metals in the European market.

The precious metals imported each year into Cadiz and Lisbon do not, in fact, equal the entire annual output of the American mines. Some is sent each year to Manilla on ships from Acapulco. Some is used in the illegal trade between the Spanish colonies and those of other European nations. And some, no doubt, remains in the country. Besides, the American mines are by no means the only gold and silver mines in the world. They are, however, by far the most productive. It is agreed that the output of all other known mines is insignificant by comparison. It is also agreed that by far the greater part of the American mines’ output is imported annually into Cadiz and Lisbon. But Birmingham alone consumes fifty thousand pounds a year in gold and silver. That is one hundred and twentieth of the annual imports, which amount to six million pounds a year. The total annual consumption of gold and silver in all countries where they are used may therefore be nearly equal to the total annual output. The remainder may be just enough to meet the growing demand of all thriving countries. It may even have fallen so far short of that demand that it has raised the price of those metals somewhat in the European market.

The quantity of brass and iron annually brought from the mine to the market, is out of all proportion greater than that of gold and silver. We do not, however, upon this account, imagine that those coarse metals are likely to multiply beyond the demand, or to become gradually cheaper and cheaper. Why should we imagine that the precious metals are likely to do so? The coarse metals, indeed, though harder, are put to much harder uses, and, as they are of less value, less care is employed in their preservation. The precious metals, however, are not necessarily immortal any more than they, but are liable, too, to be lost, wasted, and consumed, in a great variety of ways.

Each year, far more brass and iron are brought from mines to market than gold and silver. Yet we do not think these common metals will exceed demand or become cheaper and cheaper. Why should we think precious metals will? Common metals are harder, but they are also put to much harder uses. Because they are less valuable, less care is taken to preserve them. Precious metals, however, are no more necessarily indestructible than common metals. They too can be lost, wasted, and consumed in many ways.

The price of all metals, though liable to slow and gradual variations, varies less from year to year than that of almost any other part of the rude produce of land: and the price of the precious metals is even less liable to sudden variations than that of the coarse ones. The durableness of metals is the foundation of this extraordinary steadiness of price. The corn which was brought to market last year will be all, or almost all, consumed, long before the end of this year. But some part of the iron which was brought from the mine two or three hundred years ago, may be still in use, and, perhaps, some part of the gold which was brought from it two or three thousand years ago. The different masses of corn, which, in different years, must supply the consumption of the world, will always be nearly in proportion to the respective produce of those different years. But the proportion between the different masses of iron which may be in use in two different years, will be very little affected by any accidental difference in the produce of the iron mines of those two years; and the proportion between the masses of gold will be still less affected by any such difference in the produce of the gold mines. Though the produce of the greater part of metallic mines, therefore, varies, perhaps, still more from year to year than that of the greater part of corn fields, those variations have not the same effect upon the price of the one species of commodities as upon that of the other.

The prices of all metals can change slowly and gradually. But they vary less from year to year than the prices of almost any other raw products of the land. Precious metal prices are even less likely to change suddenly than those of common metals. Metals last a long time, and this is the basis of their remarkably steady prices. All, or almost all, of the grain brought to market last year will be consumed well before this year ends. But some of the iron mined two or three hundred years ago may still be in use. Perhaps some of the gold mined two or three thousand years ago is still in use too. The amounts of grain available to feed the world in different years will always be roughly proportional to those years’ harvests. But accidental differences in iron mine output between two years will have very little effect on the relative amounts of iron in use in those years. Such differences in gold mine output will have even less effect on the relative amounts of gold in use. The output of most metal mines may therefore vary even more from year to year than the harvests of most grain fields. Even so, these variations do not have the same effect on metal prices as variations in harvests have on grain prices.

Variations in the Proportion between the respective Values of Gold and Silver.

Changes in the Relative Values of Gold and Silver.

Before the discovery of the mines of America, the value of fine gold to fine silver was regulated in the different mines of Europe, between the proportions of one to ten and one to twelve; that is, an ounce of fine gold was supposed to be worth from ten to twelve ounces of fine silver. About the middle of the last century, it came to be regulated, between the proportions of one to fourteen and one to fifteen; that is, an ounce of fine gold came to be supposed worth between fourteen and fifteen ounces of fine silver. Gold rose in its nominal value, or in the quantity of silver which was given for it. Both metals sunk in their real value, or in the quantity of labour which they could purchase; but silver sunk more than gold. Though both the gold and silver mines of America exceeded in fertility all those which had ever been known before, the fertility of the silver mines had, it seems, been proportionally still greater than that of the gold ones.

Before the discovery of the mines of America, the value of fine gold relative to fine silver was set at different European mines. It ranged from one to ten to one to twelve. In other words, an ounce of fine gold was thought to be worth ten to twelve ounces of fine silver. Around the middle of the last century, the ratio came to range from one to fourteen to one to fifteen. An ounce of fine gold was then thought to be worth between fourteen and fifteen ounces of fine silver. Gold rose in nominal value, meaning the quantity of silver given for it. Both metals fell in real value, meaning the quantity of labor they could purchase. But silver fell more than gold. Both the gold and silver mines of America were more productive than any mines previously known. Even so, the silver mines seem to have been proportionally more productive than the gold mines.

The great quantities of silver carried annually from Europe to India, have, in some of the English settlements, gradually reduced the value of that metal in proportion to gold. In the mint of Calcutta, an ounce of fine gold is supposed to be worth fifteen ounces of fine silver, in the same manner as in Europe. It is in the mint, perhaps, rated too high for the value which it bears in the market of Bengal. In China, the proportion of gold to silver still continues as one to ten, or one to twelve. In Japan, it is said to be as one to eight.

Every year, large quantities of silver are carried from Europe to India. This has gradually reduced the value of silver relative to gold in some English settlements. At the mint of Calcutta, one ounce of pure gold is valued at fifteen ounces of pure silver, just as in Europe. The mint perhaps values gold too highly compared with its market value in Bengal. In China, the ratio of gold to silver remains one to ten or one to twelve. In Japan, it is said to be one to eight.

The proportion between the quantities of gold and silver annually imported into Europe, according to Mr Meggens’ account, is as one to twenty-two nearly; that is, for one ounce of gold there are imported a little more than twenty-two ounces of silver. The great quantity of silver sent annually to the East Indies reduces, he supposes, the quantities of those metals which remain in Europe to the proportion of one to fourteen or fifteen, the proportion of their values. The proportion between their values, he seems to think, must necessarily be the same as that between their quantities, and would therefore be as one to twenty-two, were it not for this greater exportation of silver.

According to Mr Meggens, the gold and silver imported into Europe each year are in a ratio of nearly one to twenty-two. That is, for every ounce of gold, a little more than twenty-two ounces of silver are imported. He believes that large annual shipments of silver to the East Indies reduce the ratio of gold to silver remaining in Europe. The ratio becomes one to fourteen or fifteen, the same as the ratio of their values. He seems to think that the ratio of their values must necessarily match the ratio of their quantities. Without these greater exports of silver, he therefore believes the ratio of their values would be one to twenty-two.

But the ordinary proportion between the respective values of two commodities is not necessarily the same as that between the quantities of them which are commonly in the market. The price of an ox, reckoned at ten guineas, is about three score times the price of a lamb, reckoned at 3s. 6d. It would be absurd, however, to infer from thence, that there are commonly in the market three score lambs for one ox; and it would be just as absurd to infer, because an ounce of gold will commonly purchase from fourteen or fifteen ounces of silver, that there are commonly in the market only fourteen or fifteen ounces of silver for one ounce of gold.

But the usual ratio between the values of two goods is not necessarily the same as the ratio between their quantities in the market. An ox priced at ten guineas costs about sixty times as much as a lamb priced at 3 shillings and 6 pence. But it would be absurd to conclude that there are usually sixty lambs in the market for every ox. Likewise, an ounce of gold will usually buy fourteen or fifteen ounces of silver. But it would be just as absurd to conclude that there are usually only fourteen or fifteen ounces of silver in the market for every ounce of gold.

The quantity of silver commonly in the market, it is probable, is much greater in proportion to that of gold, than the value of a certain quantity of gold is to that of an equal quantity of silver. The whole quantity of a cheap commodity brought to market is commonly not only greater, but of greater value, than the whole quantity of a dear one. The whole quantity of bread annually brought to market, is not only greater, but of greater value, than the whole quantity of butcher’s meat; the whole quantity of butcher’s meat, than the whole quantity of poultry; and the whole quantity of poultry, than the whole quantity of wild fowl. There are so many more purchasers for the cheap than for the dear commodity, that, not only a greater quantity of it, but a greater value can commonly be disposed of. The whole quantity, therefore, of the cheap commodity, must commonly be greater in proportion to the whole quantity of the dear one, than the value of a certain quantity of the dear one, is to the value of an equal quantity of the cheap one. When we compare the precious metals with one another, silver is a cheap, and gold a dear commodity. We ought naturally to expect, therefore, that there should always be in the market, not only a greater quantity, but a greater value of silver than of gold. Let any man, who has a little of both, compare his own silver with his gold plate, and he will probably find, that not only the quantity, but the value of the former, greatly exceeds that of the latter. Many people, besides, have a good deal of silver who have no gold plate, which, even with those who have it, is generally confined to watch-cases, snuff-boxes, and such like trinkets, of which the whole amount is seldom of great value. In the British coin, indeed, the value of the gold preponderates greatly, but it is not so in that of all countries. In the coin of some countries, the value of the two metals is nearly equal. In the Scotch coin, before the union with England, the gold preponderated very little, though it did somewhat {See Ruddiman’s Preface to Anderson’s Diplomata, etc. Scotiae.}, as it appears by the accounts of the mint. In the coin of many countries the silver preponderates. In France, the largest sums are commonly paid in that metal, and it is there difficult to get more gold than what is necessary to carry about in your pocket. The superior value, however, of the silver plate above that of the gold, which takes place in all countries, will much more than compensate the preponderancy of the gold coin above the silver, which takes place only in some countries.

The quantity of silver usually on the market is probably much greater than the quantity of gold. The difference in quantity is probably much greater than the difference in value between equal amounts of gold and silver. The total quantity of a cheap commodity brought to market is usually greater than that of an expensive one. Its total value is usually greater too. The total quantity of bread brought to market each year is greater than the total quantity of butcher’s meat. It is also worth more. The same is true of butcher’s meat compared with poultry, and of poultry compared with wild birds. There are so many more buyers for the cheap commodity than for the expensive one. As a result, sellers can usually sell not only a greater quantity of it, but a greater total value. The total quantity of the cheap commodity must therefore usually be greater than that of the expensive one. The difference in quantity must be greater than the difference in value between equal amounts of the two commodities. Among the precious metals, silver is cheap and gold is expensive. We should therefore naturally expect the market always to contain more silver than gold, both in quantity and in value. Let anyone who owns a little of both compare their silver plate with their gold plate. They will probably find that their silver greatly exceeds their gold in both quantity and value. Many people also have a good deal of silver but no gold plate. Even among those who own gold plate, it is generally limited to watch cases, snuffboxes, and similar trinkets. These are seldom worth much in total. In British coinage, the value of gold greatly exceeds that of silver. But this is not true of every country. In some countries’ coinage, the values of the two metals are nearly equal. Before Scotland’s union with England, the value of gold in Scottish coinage exceeded that of silver by only a little. This appears from the mint’s accounts {See Ruddiman’s Preface to Anderson’s Diplomata, etc. Scotiae.}. In many countries’ coinage, the value of silver is greater. In France, large sums are usually paid in silver. It is difficult to get more gold there than one needs to carry in a pocket. In all countries, however, the value of silver plate exceeds that of gold plate. This difference will more than make up for the greater value of gold coin over silver coin in some countries.

Though, in one sense of the word, silver always has been, and probably always will be, much cheaper than gold; yet, in another sense, gold may perhaps, in the present state of the Spanish market, be said to be somewhat cheaper than silver. A commodity may be said to be dear or cheap not only according to the absolute greatness or smallness of its usual price, but according as that price is more or less above the lowest for which it is possible to bring it to market for any considerable time together. This lowest price is that which barely replaces, with a moderate profit, the stock which must be employed in bringing the commodity thither. It is the price which affords nothing to the landlord, of which rent makes not any component part, but which resolves itself altogether into wages and profit. But, in the present state of the Spanish market, gold is certainly somewhat nearer to this lowest price than silver. The tax of the king of Spain upon gold is only one-twentieth part of the standard metal, or five per cent.; whereas his tax upon silver amounts to one-tenth part of it, or to ten per cent. In these taxes, too, it has already been observed, consists the whole rent of the greater part of the gold and silver mines of Spanish America; and that upon gold is still worse paid than that upon silver. The profits of the undertakers of gold mines, too, as they more rarely make a fortune, must, in general, be still more moderate than those of the undertakers of silver mines. The price of Spanish gold, therefore, as it affords both less rent and less profit, must, in the Spanish market, be somewhat nearer to the lowest price for which it is possible to bring it thither, than the price of Spanish silver. When all expenses are computed, the whole quantity of the one metal, it would seem, cannot, in the Spanish market, be disposed of so advantageously as the whole quantity of the other. The tax, indeed, of the king of Portugal upon the gold of the Brazils, is the same with the ancient tax of the king of Spain upon the silver of Mexico and Peru; or one-fifth part of the standard metal. It may therefore be uncertain, whether, to the general market of Europe, the whole mass of American gold comes at a price nearer to the lowest for which it is possible to bring it thither, than the whole mass of American silver.

In one sense, silver has always been much cheaper than gold and probably always will be. Yet, in another sense, gold may perhaps be somewhat cheaper than silver in the present Spanish market. A commodity can be called expensive or cheap based on how high or low its usual price is. But it can also be called expensive or cheap based on how far that price is above the lowest sustainable price. That is the lowest price at which it can be brought to market for any considerable time. This price just covers the capital needed to bring the commodity to market, with a moderate profit. It provides nothing for the landlord and includes no rent. It consists entirely of wages and profit. In the present Spanish market, however, gold is certainly somewhat closer to this lowest price than silver. The king of Spain's tax on gold is only one twentieth of the standard metal, or five percent. His tax on silver, however, amounts to one tenth, or ten percent. As already noted, these taxes make up the entire rent from most gold and silver mines in Spanish America. And the tax on gold is paid even less reliably than the tax on silver. Gold mine operators also make fortunes less often than silver mine operators. Their profits must therefore generally be even more moderate. The price of Spanish gold thus provides both less rent and less profit. So, in the Spanish market, it must be somewhat closer than the price of Spanish silver to the lowest price at which it can be brought there. When all expenses are counted, it seems that the entire quantity of one metal cannot be sold in the Spanish market as profitably as the entire quantity of the other. The king of Portugal's tax on gold from the Brazils, however, is the same as the king of Spain's former tax on silver from Mexico and Peru. It is one fifth of the standard metal. So it may be uncertain whether all American gold reaches the general European market at a price closer to the lowest possible price than all American silver.

The price of diamonds and other precious stones may, perhaps, be still nearer to the lowest price at which it is possible to bring them to market, than even the price of gold.

The price of diamonds and other precious stones may be even closer than gold’s price to the lowest possible cost of bringing them to market.

Though it is not very probable that any part of a tax, which is not only imposed upon one of the most proper subjects of taxation, a mere luxury and superfluity, but which affords so very important a revenue as the tax upon silver, will ever be given up as long as it is possible to pay it; yet the same impossibility of paying it, which, in 1736. made it necessary to reduce it from one-fifth to one-tenth, may in time make it necessary to reduce it still further; in the same manner as it made it necessary to reduce the tax upon gold to one-twentieth. That the silver mines of Spanish America, like all other mines, become gradually more expensive in the working, on account of the greater depths at which it is necessary to carry on the works, and of the greater expense of drawing out the water, and of supplying them with fresh air at those depths, is acknowledged by everybody who has inquired into the state of those mines.

The tax on silver is imposed on a mere luxury, one of the most suitable things to tax. It also provides a very important revenue. So it is unlikely that any part of the tax will ever be given up while it can be paid. Yet it became impossible to pay the tax at its previous rate in 1736. This made it necessary to reduce the rate from one-fifth to one-tenth. The same inability to pay may eventually make a further reduction necessary. It also made it necessary to reduce the tax on gold to one-twentieth. Everyone who has investigated the silver mines of Spanish America agrees that, like all mines, they gradually become more expensive to work. This is because mining must be carried on at greater depths. At those depths, it also costs more to pump out water and supply fresh air.

These causes, which are equivalent to a growing scarcity of silver (for a commodity may be said to grow scarcer when it becomes more difficult and expensive to collect a certain quantity of it), must, in time, produce one or other of the three following events: The increase of the expense must either, first, be compensated altogether by a proportionable increase in the price of the metal; or, secondly, it must be compensated altogether by a proportionable diminution of the tax upon silver; or, thirdly, it must be compensated partly by the one and partly by the other of those two expedients. This third event is very possible. As gold rose in its price in proportion to silver, notwithstanding a great diminution of the tax upon gold, so silver might rise in its price in proportion to labour and commodities, notwithstanding an equal diminution of the tax upon silver.

These causes amount to a growing scarcity of silver. A commodity can be said to grow scarcer when collecting a given quantity becomes more difficult and expensive. In time, the rising expense must lead to one of three outcomes. First, a proportional increase in the price of silver might cover the whole expense. Second, a proportional reduction in the tax on silver might cover it all. Third, the two measures might cover the expense between them. This third outcome is quite possible. Gold rose in price relative to silver, despite a large reduction in the tax on gold. Likewise, silver might rise in price relative to labor and goods, despite an equal reduction in the tax on silver.

Such successive reductions of the tax, however, though they may not prevent altogether, must certainly retard, more or less, the rise of the value of silver in the European market. In consequence of such reductions, many mines may be wrought which could not be wrought before, because they could not afford to pay the old tax; and the quantity of silver annually brought to market, must always be somewhat greater, and, therefore, the value of any given quantity somewhat less, than it otherwise would have been. In consequence of the reduction in 1736, the value of silver in the European market, though it may not at this day be lower than before that reduction, is, probably, at least ten per cent. lower than it would have been, had the court of Spain continued to exact the old tax. That, notwithstanding this reduction, the value of silver has, during the course of the present century, begun to rise somewhat in the European market, the facts and arguments which have been alleged above, dispose me to believe, or more properly to suspect and conjecture; for the best opinion which I can form upon this subject, scarce, perhaps, deserves the name of belief. The rise, indeed, supposing there has been any, has hitherto been so very small, that after all that has been said, it may, perhaps, appear to many people uncertain, not only whether this event has actually taken place, but whether the contrary may not have taken place, or whether the value of silver may not still continue to fall in the European market.

These successive tax reductions may not completely prevent silver’s value from rising in the European market. But they must certainly slow the rise to some extent. Because of these reductions, many mines can now be worked that could not be worked before. They could not afford to pay the old tax. The amount of silver brought to market each year must therefore always be somewhat greater than it otherwise would have been. As a result, the value of any given quantity must be somewhat lower. The value of silver in the European market may not now be lower than it was before the 1736 tax reduction. But because of that reduction, it is probably at least ten percent lower than it would have been. This is what would have happened if the Spanish court had continued to collect the old tax. Despite this reduction, silver’s value in the European market may have begun to rise somewhat during the present century. The facts and arguments presented above incline me to believe this, or rather to suspect and conjecture it. For the best opinion I can form on the subject perhaps hardly deserves to be called a belief. Indeed, if silver’s value has risen, the rise has so far been very small. After all that has been said, many people may perhaps still find it uncertain whether any rise has occurred. They may even wonder whether the opposite has happened, or whether silver’s value may still be falling in the European market.

It must be observed, however, that whatever may be the supposed annual importation of gold and silver, there must be a certain period at which the annual consumption of those metals will be equal to that annual importation. Their consumption must increase as their mass increases, or rather in a much greater proportion. As their mass increases, their value diminishes. They are more used, and less cared for, and their consumption consequently increases in a greater proportion than their mass. After a certain period, therefore, the annual consumption of those metals must, in this manner, become equal to their annual importation, provided that importation is not continually increasing; which, in the present times, is not supposed to be the case.

However much gold and silver may be imported each year, annual consumption must eventually equal annual imports. Consumption must increase as the supply increases, or rather, increase much faster. As the supply grows, the metals lose value. People use them more and take less care of them. As a result, consumption increases faster than the supply. Eventually, then, annual consumption of these metals must equal annual imports, provided imports do not keep increasing. At present, imports are not thought to be continually increasing.

If, when the annual consumption has become equal to the annual importation, the annual importation should gradually diminish, the annual consumption may, for some time, exceed the annual importation. The mass of those metals may gradually and insensibly diminish, and their value gradually and insensibly rise, till the annual importation becoming again stationary, the annual consumption will gradually and insensibly accommodate itself to what that annual importation can maintain.

Suppose annual consumption has become equal to annual imports, and imports then gradually decline. For some time, annual consumption may exceed annual imports. The total amount of these metals may gradually and imperceptibly decrease, while their value gradually and imperceptibly rises. Once annual imports stop declining, annual consumption will gradually and imperceptibly adjust to what those imports can sustain.

Grounds of the suspicion that the Value of Silver still continues to decrease.

Reasons to suspect that the value of silver is still decreasing.

The increase of the wealth of Europe, and the popular notion, that as the quantity of the precious metals naturally increases with the increase of wealth, so their value diminishes as their quantity increases, may, perhaps, dispose many people to believe that their value still continues to fall in the European market; and the still gradually increasing price of many parts of the rude produce of land may confirm them still farther in this opinion.

Europe’s growing wealth may lead many people to believe that the value of precious metals is still falling in the European market. A common belief may also encourage this view. People believe that the quantity of precious metals naturally increases as wealth grows, and that their value falls as their quantity increases. The gradually rising prices of many raw products of the land may reinforce this belief.

That that increase in the quantity of the precious metals, which arises in any country from the increase of wealth, has no tendency to diminish their value, I have endeavoured to shew already. Gold and silver naturally resort to a rich country, for the same reason that all sorts of luxuries and curiosities resort to it; not because they are cheaper there than in poorer countries, but because they are dearer, or because a better price is given for them. It is the superiority of price which attracts them; and as soon as that superiority ceases, they necessarily cease to go thither.

I have already tried to show that an increase in precious metals caused by a country’s growing wealth does not tend to reduce their value. Gold and silver naturally flow to a rich country for the same reason as all kinds of luxuries and curiosities. They go there not because they are cheaper than in poorer countries, but because they are more expensive. People pay a better price for them. This higher price attracts them. As soon as the price is no longer higher, they necessarily stop flowing there.

If you except corn, and such other vegetables as are raised altogether by human industry, that all other sorts of rude produce, cattle, poultry, game of all kinds, the useful fossils and minerals of the earth, etc. naturally grow dearer, as the society advances in wealth and improvement, I have endeavoured to shew already. Though such commodities, therefore, come to exchange for a greater quantity of silver than before, it will not from thence follow that silver has become really cheaper, or will purchase less labour than before; but that such commodities have become really dearer, or will purchase more labour than before. It is not their nominal price only, but their real price, which rises in the progress of improvement. The rise of their nominal price is the effect, not of any degradation of the value of silver, but of the rise in their real price.

I have already tried to show that almost all raw products naturally become more expensive as society grows wealthier and more advanced. The exceptions are grain and other crops grown entirely through human labor. Other raw products include cattle, poultry, game of all kinds, and useful substances and minerals from the earth. These goods therefore come to exchange for more silver than before. But this does not mean that silver has become less valuable or can buy less labor than before. Instead, the goods have become more expensive and can buy more labor than before. As society advances, it is not only their price in silver that rises, but their real price. Their price in silver rises not because silver has lost value, but because their real price has risen.

Different Effects of the Progress of Improvement upon three different sorts of rude Produce.

The Different Effects of Progress on Three Kinds of Raw Produce.

These different sorts of rude produce may be divided into three classes. The first comprehends those which it is scarce in the power of human industry to multiply at all. The second, those which it can multiply in proportion to the demand. The third, those in which the efficacy of industry is either limited or uncertain. In the progress of wealth and improvement, the real price of the first may rise to any degree of extravagance, and seems not to be limited by any certain boundary. That of the second, though it may rise greatly, has, however, a certain boundary, beyond which it cannot well pass for any considerable time together. That of the third, though its natural tendency is to rise in the progress of improvement, yet in the same degree of improvement it may sometimes happen even to fall, sometimes to continue the same, and sometimes to rise more or less, according as different accidents render the efforts of human industry, in multiplying this sort of rude produce, more or less successful.

These different kinds of raw produce can be divided into three classes. The first includes those that human effort can hardly increase at all. The second includes those that human effort can increase in proportion to demand. The third includes those for which human effort has limited or uncertain results. As wealth and economic development advance, the real price of the first class may rise to any extraordinary level. It seems to have no definite limit. The real price of the second class may rise greatly, but it has a definite limit. It can hardly remain above that limit for any considerable time. The real price of the third class naturally tends to rise as economic development advances. Yet at the same level of development, it may sometimes fall, stay the same, or rise by varying amounts. The result depends on whether different circumstances make human efforts to increase this kind of raw produce more or less successful.

First Sort.—The first sort of rude produce, of which the price rises in the progress of improvement, is that which it is scarce in the power of human industry to multiply at all. It consists in those things which nature produces only in certain quantities, and which being of a very perishable nature, it is impossible to accumulate together the produce of many different seasons. Such are the greater part of rare and singular birds and fishes, many different sorts of game, almost all wild-fowl, all birds of passage in particular, as well as many other things. When wealth, and the luxury which accompanies it, increase, the demand for these is likely to increase with them, and no effort of human industry may be able to increase the supply much beyond what it was before this increase of the demand. The quantity of such commodities, therefore, remaining the same, or nearly the same, while the competition to purchase them is continually increasing, their price may rise to any degree of extravagance, and seems not to be limited by any certain boundary. If woodcocks should become so fashionable as to sell for twenty guineas a-piece, no effort of human industry could increase the number of those brought to market, much beyond what it is at present. The high price paid by the Romans, in the time of their greatest grandeur, for rare birds and fishes, may in this manner easily be accounted for. These prices were not the effects of the low value of silver in those times, but of the high value of such rarities and curiosities as human industry could not multiply at pleasure. The real value of silver was higher at Rome, for sometime before, and after the fall of the republic, than it is through the greater part of Europe at present. Three sestertii equal to about sixpence sterling, was the price which the republic paid for the modius or peck of the tithe wheat of Sicily. This price, however, was probably below the average market price, the obligation to deliver their wheat at this rate being considered as a tax upon the Sicilian farmers. When the Romans, therefore, had occasion to order more corn than the tithe of wheat amounted to, they were bound by capitulation to pay for the surplus at the rate of four sestertii, or eightpence sterling the peck; and this had probably been reckoned the moderate and reasonable, that is, the ordinary or average contract price of those times; it is equal to about one-and-twenty shillings the quarter. Eight-and-twenty shillings the quarter was, before the late years of scarcity, the ordinary contract price of English wheat, which in quality is inferior to the Sicilian, and generally sells for a lower price in the European market. The value of silver, therefore, in those ancient times, must have been to its value in the present, as three to four inversely; that is, three ounces of silver would then have purchased the same quantity of labour and commodities which four ounces will do at present. When we read in Pliny, therefore, that Seius {Lib. X, c. 29.} bought a white nightingale, as a present for the empress Agrippina, at the price of six thousand sestertii, equal to about fifty pounds of our present money; and that Asinius Celer {Lib. IX, c. 17.} purchased a surmullet at the price of eight thousand sestertii, equal to about sixty-six pounds thirteen shillings and fourpence of our present money; the extravagance of those prices, how much soever it may surprise us, is apt, notwithstanding, to appear to us about one third less than it really was. Their real price, the quantity of labour and subsistence which was given away for them, was about one-third more than their nominal price is apt to express to us in the present times. Seius gave for the nightingale the command of a quantity of labour and subsistence, equal to what £ 66:13: 4d. would purchase in the present times; and Asinius Celer gave for a surmullet the command of a quantity equal to what £ 88:17: 9d. would purchase. What occasioned the extravagance of those high prices was, not so much the abundance of silver, as the abundance of labour and subsistence, of which those Romans had the disposal, beyond what was necessary for their own use. The quantity of silver, of which they had the disposal, was a good deal less than what the command of the same quantity of labour and subsistence would have procured to them in the present times.

First Sort. The first kind of raw produce whose price rises as an economy improves is produce that human effort can hardly increase at all. Nature produces these things only in certain quantities. They also perish so quickly that the produce of many different seasons cannot be stored together. They include most rare and unusual birds and fish, many kinds of game, almost all wildfowl, and especially all migratory birds, as well as many other things. As wealth and the luxury that accompanies it increase, demand for these things is likely to grow. Yet no human effort may be able to increase the supply much beyond its level before demand rose. The quantity of these goods therefore remains the same, or nearly so, while competition to buy them keeps growing. Their price may consequently rise to any extravagant level, with no apparent limit. If woodcocks became so fashionable that they sold for twenty guineas each, no human effort could greatly increase the number brought to market beyond its present level. This easily explains the high prices the Romans paid for rare birds and fish at the height of their grandeur. Those prices resulted not from the low value of silver at the time, but from the high value of rarities and curiosities that human effort could not multiply at will. For some time before and after the fall of the republic, silver's real value was higher in Rome than it is now in most of Europe. The republic paid three sestertii, equal to about sixpence sterling, for a modius, or peck, of Sicily's tithe wheat. This price was probably below the average market price, however. The obligation to deliver wheat at that rate was considered a tax on Sicilian farmers. When the Romans needed to order more grain than the wheat tithe supplied, an agreement required them to pay four sestertii, or eightpence sterling, per peck for the extra grain. This was probably reckoned a moderate and reasonable price, meaning the ordinary or average contract price of the time. It equals about twenty-one shillings per quarter. Before the recent years of scarcity, the ordinary contract price of English wheat was twenty-eight shillings per quarter. English wheat is inferior in quality to Sicilian wheat and generally sells for less on the European market. The value of silver in ancient times must therefore have been higher than it is now in the inverse ratio of three to four. In other words, three ounces of silver would then have bought as much labor and goods as four ounces buy now. Pliny tells us that Seius {Lib. X, c. 29.} bought a white nightingale as a present for the empress Agrippina. He paid six thousand sestertii, equal to about fifty pounds in our present money. Pliny also tells us that Asinius Celer {Lib. IX, c. 17.} bought a surmullet for eight thousand sestertii, equal to about sixty-six pounds thirteen shillings and fourpence in our present money. However surprising these extravagant prices may seem, they are still likely to appear about one-third less extravagant than they really were. Their real price was the amount of labor and subsistence given up for them. That was about one-third more than their nominal price tends to suggest to us today. For the nightingale, Seius gave up command of as much labor and subsistence as £66:13:4d. would buy today. For the surmullet, Asinius Celer gave up command of as much as £88:17:9d. would buy. These extravagant prices resulted not so much from an abundance of silver as from the abundance of labor and subsistence these Romans could command beyond what they needed for their own use. The amount of silver at their disposal was much less than command of the same amount of labor and subsistence would obtain for them today.

Second sort.—The second sort of rude produce, of which the price rises in the progress of improvement, is that which human industry can multiply in proportion to the demand. It consists in those useful plants and animals, which, in uncultivated countries, nature produces with such profuse abundance, that they are of little or no value, and which, as cultivation advances, are therefore forced to give place to some more profitable produce. During a long period in the progress of improvement, the quantity of these is continually diminishing, while, at the same time, the demand for them is continually increasing. Their real value, therefore, the real quantity of labour which they will purchase or command, gradually rises, till at last it gets so high as to render them as profitable a produce as any thing else which human industry can raise upon the most fertile and best cultivated land. When it has got so high, it cannot well go higher. If it did, more land and more industry would soon be employed to increase their quantity.

Second sort. The second sort of raw produce whose price rises as a country develops is what people can produce in proportion to demand. It consists of useful plants and animals that nature provides in great abundance in uncultivated countries. There, they have little or no value. As cultivation advances, they are therefore forced out by more profitable produce. For a long time during this development, their supply keeps falling while demand for them keeps rising. Their real value, or the actual amount of labor they can purchase or command, therefore gradually rises. Eventually, it rises so high that they become as profitable as anything people can produce on the most fertile and best cultivated land. Once their value reaches that level, it can hardly rise further. If it did, more land and labor would soon be used to increase their supply.

When the price of cattle, for example, rises so high, that it is as profitable to cultivate land in order to raise food for them as in order to raise food for man, it cannot well go higher. If it did, more corn land would soon be turned into pasture. The extension of tillage, by diminishing the quantity of wild pasture, diminishes the quantity of butcher’s meat, which the country naturally produces without labour or cultivation; and, by increasing the number of those who have either corn, or, what comes to the same thing, the price of corn, to give in exchange for it, increases the demand. The price of butcher’s meat, therefore, and, consequently, of cattle, must gradually rise, till it gets so high, that it becomes as profitable to employ the most fertile and best cultivated lands in raising food for them as in raising corn. But it must always be late in the progress of improvement before tillage can be so far extended as to raise the price of cattle to this height; and, till it has got to this height, if the country is advancing at all, their price must be continually rising. There are, perhaps, some parts of Europe in which the price of cattle has not yet got to this height. It had not got to this height in any part of Scotland before the Union. Had the Scotch cattle been always confined to the market of Scotland, in a country in which the quantity of land, which can be applied to no other purpose but the feeding of cattle, is so great in proportion to what can be applied to other purposes, it is scarce possible, perhaps, that their price could ever have risen so high as to render it profitable to cultivate land for the sake of feeding them. In England, the price of cattle, it has already been observed, seems, in the neighbourhood of London, to have got to this height about the beginning of the last century; but it was much later, probably, before it got through the greater part of the remoter counties, in some of which, perhaps, it may scarce yet have got to it. Of all the different substances, however, which compose this second sort of rude produce, cattle is, perhaps, that of which the price, in the progress of improvement, rises first to this height.

When cattle prices rise high enough, it becomes as profitable to grow feed for cattle as to grow food for people. The price can hardly rise higher. If it did, more grain fields would soon be turned into pasture. As cultivation spreads, it reduces the amount of wild pasture. This reduces the meat a country naturally produces without labor or cultivation. Cultivation also increases the number of people who have grain, or its equivalent in money, to exchange for meat. This increases demand. The price of meat, and therefore of cattle, must gradually rise. It will rise until using the most fertile and best cultivated land to grow feed becomes as profitable as growing grain. But cultivation can spread this far only late in the course of economic development. Until cattle prices reach this level, they must keep rising if the country is making any progress at all. Perhaps cattle prices have not yet reached this level in some parts of Europe. They had not reached it anywhere in Scotland before the Union. Suppose Scottish cattle had always been sold only in the Scottish market. Scotland has a great deal of land that can be used only for feeding cattle, compared with the land that can be put to other uses. In that case, cattle prices could perhaps hardly ever have risen high enough to make it profitable to cultivate land to feed them. In England, as already noted, cattle prices near London seem to have reached this level around the beginning of the last century. But they probably reached it much later across most of the more distant counties. In some of those counties, prices may perhaps barely have reached it even now. Of all the different goods that make up this second kind of raw produce, however, cattle are perhaps the first whose price rises to this level as a country develops.

Till the price of cattle, indeed, has got to this height, it seems scarce possible that the greater part, even of those lands which are capable of the highest cultivation, can be completely cultivated. In all farms too distant from any town to carry manure from it, that is, in the far greater part of those of every extensive country, the quantity of well cultivated land must be in proportion to the quantity of manure which the farm itself produces; and this, again, must be in proportion to the stock of cattle which are maintained upon it. The land is manured, either by pasturing the cattle upon it, or by feeding them in the stable, and from thence carrying out their dung to it. But unless the price of the cattle be sufficient to pay both the rent and profit of cultivated land, the farmer cannot afford to pasture them upon it; and he can still less afford to feed them in the stable. It is with the produce of improved and cultivated land only that cattle can be fed in the stable; because, to collect the scanty and scattered produce of waste and unimproved lands, would require too much labour, and be too expensive. If the price of the cattle, therefore, is not sufficient to pay for the produce of improved and cultivated land, when they are allowed to pasture it, that price will be still less sufficient to pay for that produce, when it must be collected with a good deal of additional labour, and brought into the stable to them. In these circumstances, therefore, no more cattle can with profit be fed in the stable than what are necessary for tillage. But these can never afford manure enough for keeping constantly in good condition all the lands which they are capable of cultivating. What they afford, being insufficient for the whole farm, will naturally be reserved for the lands to which it can be most advantageously or conveniently applied; the most fertile, or those, perhaps, in the neighbourhood of the farm-yard. These, therefore, will be kept constantly in good condition, and fit for tillage. The rest will, the greater part of them, be allowed to lie waste, producing scarce any thing but some miserable pasture, just sufficient to keep alive a few straggling, half-starved cattle; the farm, though much overstocked in proportion to what would be necessary for its complete cultivation, being very frequently overstocked in proportion to its actual produce. A portion of this waste land, however, after having been pastured in this wretched manner for six or seven years together, may be ploughed up, when it will yield, perhaps, a poor crop or two of bad oats, or of some other coarse grain; and then, being entirely exhausted, it must be rested and pastured again as before, and another portion ploughed up, to be in the same manner exhausted and rested again in its turn. Such, accordingly, was the general system of management all over the low country of Scotland before the Union. The lands which were kept constantly well manured and in good condition seldom exceeded a third or fourth part of the whole farm, and sometimes did not amount to a fifth or a sixth part of it. The rest were never manured, but a certain portion of them was in its turn, notwithstanding, regularly cultivated and exhausted. Under this system of management, it is evident, even that part of the lands of Scotland which is capable of good cultivation, could produce but little in comparison of what it may be capable of producing. But how disadvantageous soever this system may appear, yet, before the Union, the low price of cattle seems to have rendered it almost unavoidable. If, notwithstanding a great rise in the price, it still continues to prevail through a considerable part of the country, it is owing in many places, no doubt, to ignorance and attachment to old customs, but, in most places, to the unavoidable obstructions which the natural course of things opposes to the immediate or speedy establishment of a better system: first, to the poverty of the tenants, to their not having yet had time to acquire a stock of cattle sufficient to cultivate their lands more completely, the same rise of price, which would render it advantageous for them to maintain a greater stock, rendering it more difficult for them to acquire it; and, secondly, to their not having yet had time to put their lands in condition to maintain this greater stock properly, supposing they were capable of acquiring it. The increase of stock and the improvement of land are two events which must go hand in hand, and of which the one can nowhere much outrun the other. Without some increase of stock, there can be scarce any improvement of land, but there can be no considerable increase of stock, but in consequence of a considerable improvement of land; because otherwise the land could not maintain it. These natural obstructions to the establishment of a better system, cannot be removed but by a long course of frugality and industry; and half a century or a century more, perhaps, must pass away before the old system, which is wearing out gradually, can be completely abolished through all the different parts of the country. Of all the commercial advantages, however, which Scotland has derived from the Union with England, this rise in the price of cattle is, perhaps, the greatest. It has not only raised the value of all highland estates, but it has, perhaps, been the principal cause of the improvement of the low country.

Until cattle prices reach this level, it seems hardly possible to cultivate fully most land capable of the highest cultivation. Most farms in any large country are too far from a town to bring manure from it. On such farms, the amount of well cultivated land must depend on how much manure the farm itself produces. That, in turn, must depend on how many cattle the farm supports. The land is manured either by grazing cattle on it or by feeding them in a stable and carrying their dung out. But cattle prices must be high enough to cover both the rent and profit of cultivated land. Otherwise, the farmer cannot afford to graze cattle on it, and can still less afford to feed them in a stable. Only the produce of improved and cultivated land can be used to feed cattle in a stable. Gathering the scanty, scattered produce of waste and unimproved land would take too much labor and cost too much. Suppose cattle prices cannot cover the cost of the produce they eat while grazing on cultivated land. Then those prices will be even less able to cover the cost when the produce must be gathered and brought to the stable. Under these circumstances, a farmer can profitably feed in the stable only as many cattle as are needed for tillage. But these cattle can never supply enough manure to keep all the land they can cultivate in good condition. Since their manure is not enough for the whole farm, it will naturally be reserved for land where it can be used most profitably or conveniently. This will be the most fertile land, or perhaps the land near the farmyard. That land will therefore be kept in good condition and ready for tillage. Most of the remaining land will be left waste. It will produce hardly anything but miserable pasture, just enough to keep a few scattered, half-starved cattle alive. The farm will have far fewer cattle than it needs for complete cultivation. Yet it will very often have too many for what the land actually produces. After six or seven years of such poor grazing, however, a portion of this waste land may be plowed. It may then yield one or two poor crops of bad oats or some other coarse grain. Once the land is completely exhausted, it must be rested and grazed again as before. Another portion is then plowed, exhausted, and rested in its turn. This was the general system of farming throughout the low country of Scotland before the Union. The land kept well manured and in good condition was seldom more than a third or a fourth of the farm. Sometimes it was less than a fifth or a sixth. The rest was never manured, though a portion was regularly cultivated and exhausted in turn. Under this system, even the land in Scotland capable of good cultivation clearly produced little compared with what it might produce. However disadvantageous this system may seem, low cattle prices appear to have made it almost unavoidable before the Union. Despite a great rise in prices, it still prevails in a considerable part of the country. In many places, this is no doubt due to ignorance and attachment to old customs. But in most places, it is due to unavoidable obstacles that naturally prevent a better system from being established immediately or quickly. First, the tenants are poor. They have not yet had time to acquire enough cattle to cultivate their land more fully. The same rise in prices that would make it profitable to keep more cattle also makes them harder to acquire. Second, the tenants have not yet had time to prepare their land to support more cattle properly, even if they could acquire them. An increase in cattle and the improvement of land must go hand in hand. Neither can advance much faster than the other. Without some increase in cattle, there can hardly be any improvement of land. But cattle cannot increase considerably unless the land is considerably improved, because otherwise the land could not support them. These natural obstacles to a better system can be removed only through a long period of thrift and hard work. Perhaps another half century or century must pass before the old system, which is gradually disappearing, is completely abolished throughout the country. Of all the commercial advantages Scotland has gained from the Union with England, this rise in cattle prices is perhaps the greatest. It has raised the value of all highland estates. It has also perhaps been the main cause of the improvement of the low country.

In all new colonies, the great quantity of waste land, which can for many years be applied to no other purpose but the feeding of cattle, soon renders them extremely abundant; and in every thing great cheapness is the necessary consequence of great abundance. Though all the cattle of the European colonies in America were originally carried from Europe, they soon multiplied so much there, and became of so little value, that even horses were allowed to run wild in the woods, without any owner thinking it worth while to claim them. It must be a long time after the first establishment of such colonies, before it can become profitable to feed cattle upon the produce of cultivated land. The same causes, therefore, the want of manure, and the disproportion between the stock employed in cultivation and the land which it is destined to cultivate, are likely to introduce there a system of husbandry, not unlike that which still continues to take place in so many parts of Scotland. Mr Kalm, the Swedish traveller, when he gives an account of the husbandry of some of the English colonies in North America, as he found it in 1749, observes, accordingly, that he can with difficulty discover there the character of the English nation, so well skilled in all the different branches of agriculture. They make scarce any manure for their corn fields, he says; but when one piece of ground has been exhausted by continual cropping, they clear and cultivate another piece of fresh land; and when that is exhausted, proceed to a third. Their cattle are allowed to wander through the woods and other uncultivated grounds, where they are half-starved; having long ago extirpated almost all the annual grasses, by cropping them too early in the spring, before they had time to form their flowers, or to shed their seeds. {Kalm’s Travels, vol 1, pp. 343, 344.} The annual grasses were, it seems, the best natural grasses in that part of North America; and when the Europeans first settled there, they used to grow very thick, and to rise three or four feet high. A piece of ground which, when he wrote, could not maintain one cow, would in former times, he was assured, have maintained four, each of which would have given four times the quantity of milk which that one was capable of giving. The poorness of the pasture had, in his opinion, occasioned the degradation of their cattle, which degenerated sensibly from one generation to another. They were probably not unlike that stunted breed which was common all over Scotland thirty or forty years ago, and which is now so much mended through the greater part of the low country, not so much by a change of the breed, though that expedient has been employed in some places, as by a more plentiful method of feeding them.

In all new colonies, there is a great deal of unused land. For many years, it can serve no purpose except grazing cattle. This soon makes cattle extremely abundant, and great abundance necessarily makes everything very cheap. All the cattle in the European colonies in America were originally brought from Europe. But they soon multiplied so much and became so cheap that even horses were left to roam wild in the woods. No owner thought it worth claiming them. Long after such colonies are first established, feeding cattle on crops from cultivated land cannot become profitable. The same causes are therefore likely to produce a farming system much like the one still common in many parts of Scotland. These causes are a shortage of manure and the mismatch between the capital used for farming and the land to be cultivated. Mr Kalm, the Swedish traveller, gives an account of farming in some English colonies in North America as he found it in 1749. He accordingly observes that he can hardly recognize the character of the English nation there, though it is so skilled in every branch of agriculture. He says the colonists make hardly any manure for their grain fields. Instead, when continuous cropping has exhausted one piece of land, they clear and cultivate fresh land. When that is exhausted, they move on to a third piece. Their cattle are left to wander through woods and other uncultivated land, where they are half-starved. Long ago, the cattle wiped out almost all the annual grasses by eating them too early in spring, before the grasses could flower or shed their seeds. {Kalm’s Travels, vol 1, pp. 343, 344.} The annual grasses were apparently the best natural grasses in that part of North America. When Europeans first settled there, the grasses grew thickly and reached three or four feet high. Kalm was assured that land which could not support one cow when he wrote would once have supported four. Each of those cows would have given four times as much milk as the one cow could give. In his opinion, the poor pasture had caused the cattle to deteriorate noticeably from one generation to the next. They were probably much like the stunted breed common throughout Scotland thirty or forty years ago. That breed has now greatly improved through most of the low country. This is due less to changing the breed, though that has been done in some places, than to feeding the cattle more generously.

Though it is late, therefore, in the progress of improvement, before cattle can bring such a price as to render it profitable to cultivate land for the sake of feeding them; yet of all the different parts which compose this second sort of rude produce, they are perhaps the first which bring this price; because, till they bring it, it seems impossible that improvement can be brought near even to that degree of perfection to which it has arrived in many parts of Europe.

Only late in the process of improvement do cattle fetch a price high enough to make cultivating land to feed them profitable. Yet cattle are perhaps the first product in this second category of raw produce to reach that price. Until they do, improvement seems unable to approach the degree of perfection it has reached in many parts of Europe.

As cattle are among the first, so perhaps venison is among the last parts of this sort of rude produce which bring this price. The price of venison in Great Britain, how extravagant soever it may appear, is not near sufficient to compensate the expense of a deer park, as is well known to all those who have had any experience in the feeding of deer. If it was otherwise, the feeding of deer would soon become an article of common farming, in the same manner as the feeding of those small birds, called turdi, was among the ancient Romans. Varro and Columella assure us, that it was a most profitable article. The fattening of ortolans, birds of passage which arrive lean in the country, is said to be so in some parts of France. If venison continues in fashion, and the wealth and luxury of Great Britain increase as they have done for some time past, its price may very probably rise still higher than it is at present.

Cattle are among the first kinds of raw produce to bring this price. Venison is perhaps among the last. The price of venison in Great Britain may seem extravagant. But it comes nowhere near covering the cost of a deer park. Everyone with experience of feeding deer knows this. If the price covered the cost, raising deer would soon become a common part of farming. It would be like raising the small birds called turdi among the ancient Romans. Varro and Columella assure us that raising these birds was very profitable. Fattening ortolans is said to be profitable in some parts of France. These migratory birds arrive in the country lean. Venison may continue to be fashionable, and the wealth and luxury of Great Britain may continue to grow as they have recently. If so, the price of venison may very likely rise even higher than it is now.

Between that period in the progress of improvement, which brings to its height the price of so necessary an article as cattle, and that which brings to it the price of such a superfluity as venison, there is a very long interval, in the course of which many other sorts of rude produce gradually arrive at their highest price, some sooner and some later, according to different circumstances.

As an economy develops, the price of cattle, a necessity, reaches its peak. Much later, the price of venison, a luxury, reaches its peak. In the long interval between these stages, many other kinds of raw produce gradually reach their highest prices. Some reach them sooner and others later, depending on the circumstances.

Thus, in every farm, the offals of the barn and stable will maintain a certain number of poultry. These, as they are fed with what would otherwise be lost, are a mere save-all; and as they cost the farmer scarce any thing, so he can afford to sell them for very little. Almost all that he gets is pure gain, and their price can scarce be so low as to discourage him from feeding this number. But in countries ill cultivated, and therefore but thinly inhabited, the poultry, which are thus raised without expense, are often fully sufficient to supply the whole demand. In this state of things, therefore, they are often as cheap as butcher’s meat, or any other sort of animal food. But the whole quantity of poultry which the farm in this manner produces without expense, must always be much smaller than the whole quantity of butcher’s meat which is reared upon it; and in times of wealth and luxury, what is rare, with only nearly equal merit, is always preferred to what is common. As wealth and luxury increase, therefore, in consequence of improvement and cultivation, the price of poultry gradually rises above that of butcher’s meat, till at last it gets so high, that it becomes profitable to cultivate land for the sake of feeding them. When it has got to this height, it cannot well go higher. If it did, more land would soon be turned to this purpose. In several provinces of France, the feeding of poultry is considered as a very important article in rural economy, and sufficiently profitable to encourage the farmer to raise a considerable quantity of Indian corn and buckwheat for this purpose. A middling farmer will there sometimes have four hundred fowls in his yard. The feeding of poultry seems scarce yet to be generally considered as a matter of so much importance in England. They are certainly, however, dearer in England than in France, as England receives considerable supplies from France. In the progress of improvements, the period at which every particular sort of animal food is dearest, must naturally be that which immediately precedes the general practice of cultivating land for the sake of raising it. For some time before this practice becomes general, the scarcity must necessarily raise the price. After it has become general, new methods of feeding are commonly fallen upon, which enable the farmer to raise upon the same quantity of ground a much greater quantity of that particular sort of animal food. The plenty not only obliges him to sell cheaper, but, in consequence of these improvements, he can afford to sell cheaper; for if he could not afford it, the plenty would not be of long continuance. It has been probably in this manner that the introduction of clover, turnips, carrots, cabbages, etc. has contributed to sink the common price of butcher’s meat in the London market, somewhat below what it was about the beginning of the last century.

On every farm, scraps from the barn and stable can feed a certain number of poultry. The birds make use of food that would otherwise be wasted. Since they cost the farmer almost nothing, he can afford to sell them very cheaply. Almost everything he receives is pure profit. Their price can hardly be so low that it discourages him from feeding this number. In poorly cultivated countries, where the population is therefore sparse, poultry raised without expense often fully meet the demand. In these circumstances, poultry are often as cheap as butcher’s meat or any other animal food. But a farm must always produce far less poultry without expense than butcher’s meat. In times of wealth and luxury, people always prefer what is rare to what is common, when their merits are nearly equal. As farming improves and wealth and luxury increase, the price of poultry gradually rises above that of butcher’s meat. Eventually, it becomes high enough to make growing feed for poultry profitable. Once the price reaches this level, it can hardly rise further. If it did, more land would soon be used to grow poultry feed. In several provinces of France, raising poultry is considered a very important part of the rural economy. It is profitable enough to encourage farmers to grow considerable amounts of corn and buckwheat for feed. A farmer of moderate means there will sometimes have four hundred fowls in his yard. Raising poultry hardly seems to be considered so important in England yet. Poultry are certainly more expensive in England than in France, however, since England receives considerable supplies from France. As improvements progress, each particular kind of animal food must naturally be most expensive just before farmers generally begin growing feed to raise it. For some time before this practice becomes common, scarcity must raise its price. Once the practice becomes common, farmers usually discover new feeding methods. These allow them to raise much more of that particular animal food on the same amount of land. The increased supply not only forces farmers to sell more cheaply. Thanks to these improvements, they can also afford to do so. If they could not, the plentiful supply would not last long. This is probably how the introduction of clover, turnips, carrots, cabbages, and similar crops helped lower the usual price of butcher’s meat in the London market. The price fell somewhat below what it had been around the beginning of the last century.

The hog, that finds his food among ordure, and greedily devours many things rejected by every other useful animal, is, like poultry, originally kept as a save-all. As long as the number of such animals, which can thus be reared at little or no expense, is fully sufficient to supply the demand, this sort of butcher’s meat comes to market at a much lower price than any other. But when the demand rises beyond what this quantity can supply, when it becomes necessary to raise food on purpose for feeding and fattening hogs, in the same manner as for feeding and fattening other cattle, the price necessarily rises, and becomes proportionably either higher or lower than that of other butcher’s meat, according as the nature of the country, and the state of its agriculture, happen to render the feeding of hogs more or less expensive than that of other cattle. In France, according to Mr Buffon, the price of pork is nearly equal to that of beef. In most parts of Great Britain it is at present somewhat higher.

The hog finds food among filth and greedily eats many things that every other useful animal rejects. Like poultry, it was originally kept to make use of scraps. As long as enough hogs can be raised at little or no expense to meet demand, pork comes to market at a much lower price than any other meat. But demand may rise beyond what these hogs can supply. It then becomes necessary to grow food specifically to feed and fatten hogs, just as it is for other livestock. The price of pork must then rise. It will be higher or lower than the price of other meat according to how much it costs to feed hogs compared with other livestock. That cost depends on the nature of the country and the state of its agriculture. In France, according to Mr Buffon, the price of pork is nearly equal to that of beef. In most parts of Great Britain, it is currently somewhat higher.

The great rise in the price both of hogs and poultry, has, in Great Britain, been frequently imputed to the diminution of the number of cottagers and other small occupiers of land; an event which has in every part of Europe been the immediate forerunner of improvement and better cultivation, but which at the same time may have contributed to raise the price of those articles, both somewhat sooner and somewhat faster than it would otherwise have risen. As the poorest family can often maintain a cat or a dog without any expense, so the poorest occupiers of land can commonly maintain a few poultry, or a sow and a few pigs, at very little. The little offals of their own table, their whey, skimmed milk, and butter milk, supply those animals with a part of their food, and they find the rest in the neighbouring fields, without doing any sensible damage to any body. By diminishing the number of those small occupiers, therefore, the quantity of this sort of provisions, which is thus produced at little or no expense, must certainly have been a good deal diminished, and their price must consequently have been raised both sooner and faster than it would otherwise have risen. Sooner or later, however, in the progress of improvement, it must at any rate have risen to the utmost height to which it is capable of rising; or to the price which pays the labour and expense of cultivating the land which furnishes them with food, as well as these are paid upon the greater part of other cultivated land.

In Great Britain, the sharp rise in the price of both hogs and poultry has often been blamed on a decline in the number of cottagers and other small landholders. Throughout Europe, this decline has immediately preceded improvements in farming and better cultivation. But it may also have helped raise the prices of hogs and poultry somewhat sooner and faster than they otherwise would have risen. Even the poorest family can often keep a cat or a dog at no expense. Similarly, the poorest landholders can usually keep a few poultry, or a sow and a few pigs, at very little expense. Scraps from their own tables, along with whey, skimmed milk, and buttermilk, provide some of the animals’ food. The animals find the rest in nearby fields, without doing any noticeable damage to anyone. The decline in the number of small landholders must therefore have greatly reduced the supply of these foods, which they produced at little or no expense. Their price must consequently have risen sooner and faster than it otherwise would have. Sooner or later, however, as farming improved, the price would have risen to its highest possible level anyway. At that price, the labor and expense of cultivating the land that feeds the animals would be rewarded as well as on most other cultivated land.

The business of the dairy, like the feeding of hogs and poultry, is originally carried on as a save-all. The cattle necessarily kept upon the farm produce more milk than either the rearing of their own young, or the consumption of the farmer’s family requires; and they produce most at one particular season. But of all the productions of land, milk is perhaps the most perishable. In the warm season, when it is most abundant, it will scarce keep four-and-twenty hours. The farmer, by making it into fresh butter, stores a small part of it for a week; by making it into salt butter, for a year; and by making it into cheese, he stores a much greater part of it for several years. Part of all these is reserved for the use of his own family; the rest goes to market, in order to find the best price which is to be had, and which can scarce be so low is to discourage him from sending thither whatever is over and above the use of his own family. If it is very low indeed, he will be likely to manage his dairy in a very slovenly and dirty manner, and will scarce, perhaps, think it worth while to have a particular room or building on purpose for it, but will suffer the business to be carried on amidst the smoke, filth, and nastiness of his own kitchen, as was the case of almost all the farmers’ dairies in Scotland thirty or forty years ago, and as is the case of many of them still. The same causes which gradually raise the price of butcher’s meat, the increase of the demand, and, in consequence of the improvement of the country, the diminution of the quantity which can be fed at little or no expense, raise, in the same manner, that of the produce of the dairy, of which the price naturally connects with that of butcher’s meat, or with the expense of feeding cattle. The increase of price pays for more labour, care, and cleanliness. The dairy becomes more worthy of the farmer’s attention, and the quality of its produce gradually improves. The price at last gets so high, that it becomes worth while to employ some of the most fertile and best cultivated lands in feeding cattle merely for the purpose of the dairy; and when it has got to this height, it cannot well go higher. If it did, more land would soon be turned to this purpose. It seems to have got to this height through the greater part of England, where much good land is commonly employed in this manner. If you except the neighbourhood of a few considerable towns, it seems not yet to have got to this height anywhere in Scotland, where common farmers seldom employ much good land in raising food for cattle, merely for the purpose of the dairy. The price of the produce, though it has risen very considerably within these few years, is probably still too low to admit of it. The inferiority of the quality, indeed, compared with that of the produce of English dairies, is fully equal to that of the price. But this inferiority of quality is, perhaps, rather the effect of this lowness of price, than the cause of it. Though the quality was much better, the greater part of what is brought to market could not, I apprehend, in the present circumstances of the country, be disposed of at a much better price; and the present price, it is probable, would not pay the expense of the land and labour necessary for producing a much better quality. Through the greater part of England, notwithstanding the superiority of price, the dairy is not reckoned a more profitable employment of land than the raising of corn, or the fattening of cattle, the two great objects of agriculture. Through the greater part of Scotland, therefore, it cannot yet be even so profitable.

Dairy farming, like raising pigs and poultry, originally serves to make use of what would otherwise be wasted. The cattle a farm must keep produce more milk than their young or the farmer’s family need. They also produce the most milk at one particular time of year. But milk is perhaps the most perishable of all products of the land. In the warm season, when it is most plentiful, it will hardly keep for twenty-four hours. By making fresh butter, the farmer can store a small part of the milk for a week. By making salted butter, he can store it for a year. By making cheese, he can store a much greater part for several years. The farmer keeps some of these products for his own family. He sends the rest to market to get the best price he can. The price can hardly be so low that it discourages him from selling whatever his family does not need. If the price is very low indeed, he will probably run his dairy carelessly and allow it to become dirty. He may hardly think it worthwhile to have a separate room or building for it. Instead, he will allow the dairy work to take place amid the smoke and filth of his own kitchen. This was how almost all farmers’ dairies in Scotland operated thirty or forty years ago. Many still operate that way. The same causes that gradually raise the price of meat also raise the price of dairy products. Demand increases, and as the country’s land is improved, fewer cattle can be fed at little or no expense. The price of dairy products is naturally linked to the price of meat, or to the cost of feeding cattle. A higher price pays for more labor, care, and cleanliness. Dairy farming becomes more worthy of the farmer’s attention, and the quality of its products gradually improves. Eventually, the price rises high enough to make it worthwhile to use some of the most fertile, best cultivated land to feed cattle solely for dairy farming. Once the price reaches that level, it can hardly rise further. If it did, more land would soon be put to that use. The price seems to have reached this level through most of England, where much good land is commonly used this way. Except near a few large towns, it seems not yet to have reached this level anywhere in Scotland. There, ordinary farmers seldom use much good land to grow feed for cattle solely for dairy farming. Although the price of dairy products has risen considerably in recent years, it is probably still too low to allow this. The quality of Scottish dairy products is indeed as far below that of English dairy products as their price is. But this lower quality is perhaps the effect of the low price rather than its cause. Even if the quality were much better, I believe most dairy products brought to market could not sell for much more under the country’s present conditions. And the present price would probably not cover the cost of the land and labor needed to produce much better quality. Through most of England, despite the higher price, dairy farming is not considered a more profitable use of land than growing grain or fattening cattle. These are the two main pursuits of agriculture. Through most of Scotland, therefore, dairy farming cannot yet be even as profitable.

The lands of no country, it is evident, can ever be completely cultivated and improved, till once the price of every produce, which human industry is obliged to raise upon them, has got so high as to pay for the expense of complete improvement and cultivation. In order to do this, the price of each particular produce must be sufficient, first, to pay the rent of good corn land, as it is that which regulates the rent of the greater part of other cultivated land; and, secondly, to pay the labour and expense of the farmer, as well as they are commonly paid upon good corn land; or, in other words, to replace with the ordinary profits the stock which he employs about it. This rise in the price of each particular produce; must evidently be previous to the improvement and cultivation of the land which is destined for raising it. Gain is the end of all improvement; and nothing could deserve that name, of which loss was to be the necessary consequence. But loss must be the necessary consequence of improving land for the sake of a produce of which the price could never bring back the expense. If the complete improvement and cultivation of the country be, as it most certainly is, the greatest of all public advantages, this rise in the price of all those different sorts of rude produce, instead of being considered as a public calamity, ought to be regarded as the necessary forerunner and attendant of the greatest of all public advantages.

Clearly, no country’s land can ever be fully cultivated and improved until the price of every crop people must grow on it is high enough to cover the cost. Each crop’s price must first be enough to pay the rent of good grain-growing land. This rent determines the rent of most other cultivated land. Second, the price must cover the farmer’s labor and expenses as well as they are usually covered on good grain-growing land. In other words, it must repay the capital the farmer invests, along with the usual profit. Clearly, the price of each crop must rise before the land intended for it can be improved and cultivated. Profit is the aim of all improvement. Nothing that necessarily causes a loss could deserve to be called an improvement. But improving land to grow a crop must cause a loss if its price can never repay the cost. The complete improvement and cultivation of a country is certainly the greatest of all public benefits. If so, the rise in the price of all these different kinds of raw produce should not be seen as a public disaster. Instead, it should be seen as something that must precede and accompany the greatest of all public benefits.

This rise, too, in the nominal or money price of all those different sorts of rude produce, has been the effect, not of any degradation in the value of silver, but of a rise in their real price. They have become worth, not only a greater quantity of silver, but a greater quantity of labour and subsistence than before. As it costs a greater quantity of labour and subsistence to bring them to market, so, when they are brought thither they represent, or are equivalent to a greater quantity.

The increase in the money prices of all these different kinds of raw produce was not caused by a fall in the value of silver. It was caused by a rise in their real prices. They became worth not only more silver, but also more labor and subsistence than before. Bringing them to market costs more labor and subsistence. So, when brought to market, they represent, or are equivalent to, a greater amount of labor and subsistence.

Third Sort.—The third and last sort of rude produce, of which the price naturally rises in the progress of improvement, is that in which the efficacy of human industry, in augmenting the quantity, is either limited or uncertain. Though the real price of this sort of rude produce, therefore, naturally tends to rise in the progress of improvement, yet, according as different accidents happen to render the efforts of human industry more or less successful in augmenting the quantity, it may happen sometimes even to fall, sometimes to continue the same, in very different periods of improvement, and sometimes to rise more or less in the same period.

Third Sort. The third and last sort of raw produce naturally rises in price as a society develops. For this sort, human effort is limited or uncertain in its ability to increase the supply. Its real price therefore tends to rise as society develops. But events may make human efforts to increase the supply more or less successful. As a result, the price may sometimes fall or stay the same across very different stages of development. At other times, it may rise more or less during the same period.

There are some sorts of rude produce which nature has rendered a kind of appendages to other sorts; so that the quantity of the one which any country can afford, is necessarily limited by that of the other. The quantity of wool or of raw hides, for example, which any country can afford, is necessarily limited by the number of great and small cattle that are kept in it. The state of its improvement, and the nature of its agriculture, again necessarily determine this number.

Some kinds of raw produce are natural byproducts of others. So the quantity a country can supply is necessarily limited by the quantity of the other produce. For example, the amount of wool or raw hides a country can supply is necessarily limited by the number of cattle and sheep it keeps. That number, in turn, is necessarily determined by the country’s level of development and the nature of its agriculture.

The same causes which, in the progress of improvement, gradually raise the price of butcher’s meat, should have the same effect, it may be thought, upon the prices of wool and raw hides, and raise them, too, nearly in the same proportion. It probably would be so, if, in the rude beginnings of improvement, the market for the latter commodities was confined within as narrow bounds as that for the former. But the extent of their respective markets is commonly extremely different.

As economies develop, certain causes gradually raise the price of meat. One might think these same causes would raise the prices of wool and raw hides by nearly the same proportion. They probably would if, in the early stages of development, the market for wool and raw hides were as limited as the market for meat. But the sizes of these markets are usually very different.

The market for butcher’s meat is almost everywhere confined to the country which produces it. Ireland, and some part of British America, indeed, carry on a considerable trade in salt provisions; but they are, I believe, the only countries in the commercial world which do so, or which export to other countries any considerable part of their butcher’s meat.

Almost everywhere, meat is sold only within the country that produces it. Ireland and some parts of British America do a considerable trade in salted meat. But I believe they are the only places in the commercial world that do so. They are also the only places, I believe, that export any considerable share of their meat to other countries.

The market for wool and raw hides, on the contrary, is, in the rude beginnings of improvement, very seldom confined to the country which produces them. They can easily be transported to distant countries; wool without any preparation, and raw hides with very little; and as they are the materials of many manufactures, the industry of other countries may occasion a demand for them, though that of the country which produces them might not occasion any.

By contrast, in the early stages of development, the market for wool and raw hides is rarely limited to the country that produces them. They can easily be transported to distant countries. Wool needs no preparation, and raw hides need very little. Both are materials used in many manufactured goods. So industry in other countries may create demand for them, even if industry in the producing country creates none.

In countries ill cultivated, and therefore but thinly inhabited, the price of the wool and the hide bears always a much greater proportion to that of the whole beast, than in countries where, improvement and population being further advanced, there is more demand for butcher’s meat. Mr Hume observes, that in the Saxon times, the fleece was estimated at two-fifths of the value of the whole sheep and that this was much above the proportion of its present estimation. In some provinces of Spain, I have been assured, the sheep is frequently killed merely for the sake of the fleece and the tallow. The carcase is often left to rot upon the ground, or to be devoured by beasts and birds of prey. If this sometimes happens even in Spain, it happens almost constantly in Chili, at Buenos Ayres, and in many other parts of Spanish America, where the horned cattle are almost constantly killed merely for the sake of the hide and the tallow. This, too, used to happen almost constantly in Hispaniola, while it was infested by the buccaneers, and before the settlement, improvement, and populousness of the French plantations ( which now extend round the coast of almost the whole western half of the island) had given some value to the cattle of the Spaniards, who still continue to possess, not only the eastern part of the coast, but the whole inland mountainous part of the country.

In countries where the land is poorly cultivated and therefore sparsely populated, wool and hides always make up a larger share of an animal’s value. Their share is smaller in countries where cultivation and population have advanced further, creating greater demand for meat. Mr Hume observes that in Saxon times, the fleece was valued at two-fifths of the whole sheep’s value. This was much more than its share of a sheep’s value in his own time. I have been told that in some provinces of Spain, sheep are often killed solely for their fleece and tallow. The carcass is often left to rot on the ground or to be eaten by predatory animals and birds. If this sometimes happens even in Spain, it happens almost constantly in Chili, at Buenos Ayres, and in many other parts of Spanish America. There, cattle are almost always killed solely for their hides and tallow. This also used to happen almost constantly in Hispaniola, when it was infested by buccaneers. At that time, the French plantations had not yet been sufficiently settled, developed, and populated to give the Spaniards’ cattle some value. These plantations now extend along the coast of almost the whole western half of the island. The Spaniards still possess not only the eastern part of the coast, but also the whole mountainous interior.

Though, in the progress of improvement and population, the price of the whole beast necessarily rises, yet the price of the carcase is likely to be much more affected by this rise than that of the wool and the hide. The market for the carcase being in the rude state of society confined always to the country which produces it, must necessarily be extended in proportion to the improvement and population of that country. But the market for the wool and the hides, even of a barbarous country, often extending to the whole commercial world, it can very seldom be enlarged in the same proportion. The state of the whole commercial world can seldom be much affected by the improvement of any particular country; and the market for such commodities may remain the same, or very nearly the same, after such improvements, as before. It should, however, in the natural course of things, rather, upon the whole, be somewhat extended in consequence of them. If the manufactures, especially, of which those commodities are the materials, should ever come to flourish in the country, the market, though it might not be much enlarged, would at least be brought much nearer to the place of growth than before; and the price of those materials might at least be increased by what had usually been the expense of transporting them to distant countries. Though it might not rise, therefore, in the same proportion as that of butcher’s meat, it ought naturally to rise somewhat, and it ought certainly not to fall.

As a country develops and its population grows, the price of the whole animal necessarily rises. But the price of its carcass is likely to rise much more than the price of its wool and hide. In an undeveloped society, the market for the carcass is always confined to the country that produces it. This market must therefore grow in proportion to the country’s development and population. But the market for wool and hides from even a barbarous country often extends across the whole commercial world. It can therefore very seldom grow in the same proportion. The development of one country can seldom greatly affect the state of the whole commercial world. After such development, the market for these goods may remain the same, or very nearly the same, as before. In the natural course of things, however, it should instead grow somewhat overall as a result of that development. The country might come to have flourishing industries that use wool and hides as raw materials. If so, the market might not grow much, but it would at least be much closer to where they are produced. Their price might then rise by at least the amount usually spent transporting them to distant countries. So, although their price might not rise as much as the price of meat, it should naturally rise somewhat. It certainly should not fall.

In England, however, notwithstanding the flourishing state of its woollen manufacture, the price of English wool has fallen very considerably since the time of Edward III. There are many authentic records which demonstrate that, during the reign of that prince (towards the middle of the fourteenth century, or about 1339), what was reckoned the moderate and reasonable price of the tod, or twenty-eight pounds of English wool, was not less than ten shillings of the money of those times {See Smith’s Memoirs of Wool, vol. i c. 5, 6, 7. also vol. ii.}, containing, at the rate of twenty-pence the ounce, six ounces of silver, Tower weight, equal to about thirty shillings of our present money. In the present times, one-and-twenty shillings the tod may be reckoned a good price for very good English wool. The money price of wool, therefore, in the time of Edward III. was to its money price in the present times as ten to seven. The superiority of its real price was still greater. At the rate of six shillings and eightpence the quarter, ten shillings was in those ancient times the price of twelve bushels of wheat. At the rate of twenty-eight shillings the quarter, one-and-twenty shillings is in the present times the price of six bushels only. The proportion between the real price of ancient and modern times, therefore, is as twelve to six, or as two to one. In those ancient times, a tod of wool would have purchased twice the quantity of subsistence which it will purchase at present, and consequently twice the quantity of labour, if the real recompence of labour had been the same in both periods.

In England, however, the price of English wool has fallen considerably since Edward III, despite the flourishing woollen industry. Many reliable records demonstrate the price during his reign, around 1339, towards the middle of the fourteenth century. A moderate and reasonable price for a tod, or 28 pounds, of English wool was then at least ten shillings. {See Smith’s Memoirs of Wool, vol. i c. 5, 6, 7. also vol. ii.} At 20 pence per ounce, that sum contained six ounces of silver by Tower weight. This is equal to about 30 shillings in present money. Today, 21 shillings per tod is a good price for very good English wool. The money price of wool in Edward III’s time was therefore to its present money price as ten to seven. The difference in real price was even greater. In those earlier times, wheat cost six shillings and eightpence per quarter, so ten shillings bought twelve bushels. Today, at 28 shillings per quarter, 21 shillings buys only six bushels. The ratio between the old and present real prices is therefore twelve to six, or two to one. In those earlier times, a tod of wool would have bought twice as much subsistence as it does today. It would consequently have bought twice as much labour, if the real reward for labour had been the same in both periods.

This degradation, both in the real and nominal value of wool, could never have happened in consequence of the natural course of things. It has accordingly been the effect of violence and artifice. First, of the absolute prohibition of exporting wool from England: secondly, of the permission of importing it from Spain, duty free: thirdly, of the prohibition of exporting it from Ireland to another country but England. In consequence of these regulations, the market for English wool, instead of being somewhat extended, in consequence of the improvement of England, has been confined to the home market, where the wool of several other countries is allowed to come into competition with it, and where that of Ireland is forced into competition with it. As the woollen manufactures, too, of Ireland, are fully as much discouraged as is consistent with justice and fair dealing, the Irish can work up but a smaller part of their own wool at home, and are therefore obliged to send a greater proportion of it to Great Britain, the only market they are allowed.

This decline in both the real and nominal value of wool could never have happened naturally. It was instead caused by force and manipulation. First, England completely prohibited the export of wool. Second, it allowed wool to be imported from Spain duty free. Third, it prohibited the export of wool from Ireland to any country except England. Because of these regulations, the market for English wool was confined to England. Otherwise, the market would have expanded somewhat as England developed. In the English market, wool from several other countries was allowed to compete with English wool. Wool from Ireland was forced to compete there. Ireland’s woolen manufacturing was also discouraged as much as justice and fair dealing would allow. As a result, the Irish could process only a smaller portion of their own wool at home. They were therefore obliged to send more of it to Great Britain, the only market open to them.

I have not been able to find any such authentic records concerning the price of raw hides in ancient times. Wool was commonly paid as a subsidy to the king, and its valuation in that subsidy ascertains, at least in some degree, what was its ordinary price. But this seems not to have been the case with raw hides. Fleetwood, however, from an account in 1425, between the prior of Burcester Oxford and one of his canons, gives us their price, at least as it was stated upon that particular occasion, viz. five ox hides at twelve shillings; five cow hides at seven shillings and threepence; thirtysix sheep skins of two years old at nine shillings; sixteen calf skins at two shillings. In 1425, twelve shillings contained about the same quantity of silver as four-and-twenty shillings of our present money. An ox hide, therefore, was in this account valued at the same quantity of silver as 4s. 4/5ths of our present money. Its nominal price was a good deal lower than at present. But at the rate of six shillings and eightpence the quarter, twelve shillings would in those times have purchased fourteen bushels and four-fifths of a bushel of wheat, which, at three and sixpence the bushel, would in the present times cost 51s. 4d. An ox hide, therefore, would in those times have purchased as much corn as ten shillings and threepence would purchase at present. Its real value was equal to ten shillings and threepence of our present money. In those ancient times, when the cattle were half starved during the greater part of the winter, we cannot suppose that they were of a very large size. An ox hide which weighs four stone of sixteen pounds of avoirdupois, is not in the present times reckoned a bad one; and in those ancient times would probably have been reckoned a very good one. But at half-a-crown the stone, which at this moment (February 1773) I understand to be the common price, such a hide would at present cost only ten shillings. Through its nominal price, therefore, is higher in the present than it was in those ancient times, its real price, the real quantity of subsistence which it will purchase or command, is rather somewhat lower. The price of cow hides, as stated in the above account, is nearly in the common proportion to that of ox hides. That of sheep skins is a good deal above it. They had probably been sold with the wool. That of calves skins, on the contrary, is greatly below it. In countries where the price of cattle is very low, the calves, which are not intended to be reared in order to keep up the stock, are generally killed very young, as was the case in Scotland twenty or thirty years ago. It saves the milk, which their price would not pay for. Their skins, therefore, are commonly good for little.

I have not found any similarly reliable records of raw hide prices in ancient times. Wool was commonly paid as a subsidy to the king. Its valuation for the subsidy gives us some idea of its ordinary price. But raw hides do not seem to have been used this way. Fleetwood, however, gives their prices from a 1425 account between the prior of Burcester Oxford and one of his canons. These were at least the prices stated on that occasion: five ox hides for twelve shillings, five cow hides for seven shillings and threepence, thirty-six two-year-old sheep skins for nine shillings, and sixteen calf skins for two shillings. In 1425, twelve shillings contained about as much silver as twenty-four shillings in our present money. So an ox hide in this account was valued at the same amount of silver as 4s. 4/5ths today. Its nominal price was much lower than it is now. But at six shillings and eightpence per quarter, twelve shillings would then have bought fourteen and four-fifths bushels of wheat. At three shillings and sixpence per bushel, that wheat would now cost 51s. 4d. An ox hide would therefore have bought as much grain then as ten shillings and threepence would buy today. Its real value was equal to ten shillings and threepence in our present money. In those ancient times, cattle were half-starved for most of the winter. We cannot suppose, therefore, that they were very large. An ox hide weighing four stone of sixteen pounds avoirdupois each is not considered a bad one today. In those ancient times, it would probably have been considered a very good one. But at half a crown per stone, such a hide would now cost only ten shillings. I understand that to be the common price at this moment, February 1773. Although its nominal price is higher today, its real price is somewhat lower. That is, it buys or commands a somewhat smaller quantity of necessities. The cow hide price in the account is nearly in the usual proportion to the ox hide price. The sheep skin price is much higher in proportion. The sheep skins had probably been sold with the wool. The calf skin price, by contrast, is much lower in proportion. Where cattle prices are very low, calves not needed to maintain the herd are generally killed very young. This was the case in Scotland twenty or thirty years ago. Killing them young saves milk, since their price would not cover its cost. Their skins are therefore commonly worth very little.

The price of raw hides is a good deal lower at present than it was a few years ago; owing probably to the taking off the duty upon seal skins, and to the allowing, for a limited time, the importation of raw hides from Ireland, and from the plantations, duty free, which was done in 1769. Take the whole of the present century at an average, their real price has probably been somewhat higher than it was in those ancient times. The nature of the commodity renders it not quite so proper for being transported to distant markets as wool. It suffers more by keeping. A salted hide is reckoned inferior to a fresh one, and sells for a lower price. This circumstance must necessarily have some tendency to sink the price of raw hides produced in a country which does not manufacture them, but is obliged to export them, and comparatively to raise that of those produced in a country which does manufacture them. It must have some tendency to sink their price in a barbarous, and to raise it in an improved and manufacturing country. It must have had some tendency, therefore, to sink it in ancient, and to raise it in modern times. Our tanners, besides, have not been quite so successful as our clothiers, in convincing the wisdom of the nation, that the safety of the commonwealth depends upon the prosperity of their particular manufacture. They have accordingly been much less favoured. The exportation of raw hides has, indeed, been prohibited, and declared a nuisance; but their importation from foreign countries has been subjected to a duty; and though this duty has been taken off from those of Ireland and the plantations (for the limited time of five years only), yet Ireland has not been confined to the market of Great Britain for the sale of its surplus hides, or of those which are not manufactured at home. The hides of common cattle have, but within these few years, been put among the enumerated commodities which the plantations can send nowhere but to the mother country; neither has the commerce of Ireland been in this case oppressed hitherto, in order to support the manufactures of Great Britain.

The price of raw hides is much lower now than it was a few years ago. This is probably because the duty on seal skins was removed in 1769. That year, raw hides from Ireland and the plantations were also allowed in duty free for a limited time. On average, their real price over the present century has probably been somewhat higher than in ancient times. Raw hides are less suitable than wool for transport to distant markets. They deteriorate more in storage. A salted hide is regarded as inferior to a fresh one and sells for less. This must tend to lower the price of raw hides in a country that does not process them and must export them. It must also tend to raise their price in a country that does process them. It must tend to lower their price in a barbarous country and raise it in an improved, manufacturing country. It must therefore have tended to lower their price in ancient times and raise it in modern times. Our tanners, moreover, have been less successful than our clothiers in convincing the wisdom of the nation that the safety of the commonwealth depends on the prosperity of their particular industry. They have accordingly received much less favorable treatment. The export of raw hides has indeed been prohibited and declared a nuisance. But their import from foreign countries has been subject to a duty. That duty has been removed for hides from Ireland and the plantations, though only for five years. Even so, Ireland has not been restricted to selling its surplus hides in the Great Britain market. These are the hides not processed at home. Only within the last few years have the hides of common cattle been added to the enumerated commodities that the plantations can send only to the mother country. Nor has Ireland's trade in hides so far been restricted to support the manufactures of Great Britain.

Whatever regulations tend to sink the price, either of wool or of raw hides, below what it naturally would be, must, in an improved and cultivated country, have some tendency to raise the price of butcher’s meat. The price both of the great and small cattle, which are fed on improved and cultivated land, must be sufficient to pay the rent which the landlord, and the profit which the farmer, has reason to expect from improved and cultivated land. If it is not, they will soon cease to feed them. Whatever part of this price, therefore, is not paid by the wool and the hide, must be paid by the carcase. The less there is paid for the one, the more must be paid for the other. In what manner this price is to be divided upon the different parts of the beast, is indifferent to the landlords and farmers, provided it is all paid to them. In an improved and cultivated country, therefore, their interest as landlords and farmers cannot be much affected by such regulations, though their interest as consumers may, by the rise in the price of provisions. It would be quite otherwise, however, in an unimproved and uncultivated country, where the greater part of the lands could be applied to no other purpose but the feeding of cattle, and where the wool and the hide made the principal part of the value of those cattle. Their interest as landlords and farmers would in this case be very deeply affected by such regulations, and their interest as consumers very little. The fall in the price of the wool and the hide would not in this case raise the price of the carcase; because the greater part of the lands of the country being applicable to no other purpose but the feeding of cattle, the same number would still continue to be fed. The same quantity of butcher’s meat would still come to market. The demand for it would be no greater than before. Its price, therefore, would be the same as before. The whole price of cattle would fall, and along with it both the rent and the profit of all those lands of which cattle was the principal produce, that is, of the greater part of the lands of the country. The perpetual prohibition of the exportation of wool, which is commonly, but very falsely, ascribed to Edward III., would, in the then circumstances of the country, have been the most destructive regulation which could well have been thought of. It would not only have reduced the actual value of the greater part of the lands in the kingdom, but by reducing the price of the most important species of small cattle, it would have retarded very much its subsequent improvement.

Any regulations that push the price of wool or raw hides below its natural level must tend to raise meat prices in a developed and cultivated country. The price of both large and small livestock raised on cultivated land must cover the rent the landlord can reasonably expect. It must also cover the profit the farmer can reasonably expect from such land. If it does not, farmers will soon stop raising livestock. Therefore, whatever part of that price is not paid for the wool and hide must be paid for the carcass. The less buyers pay for the wool and hide, the more they must pay for the carcass. Landlords and farmers do not care how the price is divided among the animal’s parts, provided they receive the full amount. In a developed and cultivated country, then, such regulations cannot greatly affect their interests as landlords and farmers. But higher food prices may affect their interests as consumers. The situation would be quite different in an undeveloped and uncultivated country. There, most land could be used only for raising livestock, and wool and hides made up most of the animals’ value. In that case, such regulations would deeply affect the interests of landlords and farmers as producers, but very little as consumers. A fall in the price of wool and hides would not raise the price of the carcass. Most of the country’s land could still be used only for raising livestock, so the same number of animals would continue to be raised. The same quantity of meat would still come to market, and demand for it would be no greater than before. Its price would therefore remain the same. The total price of livestock would fall, and so would the rent and profit from all lands used mainly to raise livestock. That means most of the country’s land. The permanent ban on wool exports is commonly, but very falsely, attributed to Edward III. In the circumstances of the country at the time, it would have been one of the most destructive regulations imaginable. It would not only have reduced the actual value of most of the land in the kingdom. By lowering the price of the most important kind of small livestock, it would also have greatly delayed the kingdom’s later development.

The wool of Scotland fell very considerably in its price in consequence of the union with England, by which it was excluded from the great market of Europe, and confined to the narrow one of Great Britain. The value of the greater part of the lands in the southern counties of Scotland, which are chiefly a sheep country, would have been very deeply affected by this event, had not the rise in the price of butcher’s meat fully compensated the fall in the price of wool.

The price of Scottish wool fell considerably after the union with England. The union excluded Scottish wool from the large European market and confined it to the smaller market of Great Britain. This would have greatly reduced the value of most land in the southern counties of Scotland, where sheep farming predominates. But the rise in the price of meat fully compensated for the fall in the price of wool.

As the efficacy of human industry, in increasing the quantity either of wool or of raw hides, is limited, so far as it depends upon the produce of the country where it is exerted; so it is uncertain so far as it depends upon the produce of other countries. It so far depends not so much upon the quantity which they produce, as upon that which they do not manufacture; and upon the restraints which they may or may not think proper to impose upon the exportation of this sort of rude produce. These circumstances, as they are altogether independent of domestic industry, so they necessarily render the efficacy of its efforts more or less uncertain. In multiplying this sort of rude produce, therefore, the efficacy of human industry is not only limited, but uncertain.

The ability of human effort to increase the supply of wool or raw hides is limited by domestic production. And when it depends on the produce of other countries, it is uncertain. In that case, it depends less on how much those countries produce than on how much they leave unmanufactured. It also depends on what restrictions they may choose to place on exports of these raw materials. These circumstances are entirely independent of domestic industry. They therefore necessarily make the effectiveness of domestic efforts more or less uncertain. Human effort to increase the supply of these raw materials is therefore not only limited, but uncertain.

In multiplying another very important sort of rude produce, the quantity of fish that is brought to market, it is likewise both limited and uncertain. It is limited by the local situation of the country, by the proximity or distance of its different provinces from the sea, by the number of its lakes and rivers, and by what may be called the fertility or barrenness of those seas, lakes, and rivers, as to this sort of rude produce. As population increases, as the annual produce of the land and labour of the country grows greater and greater, there come to be more buyers of fish; and those buyers, too, have a greater quantity and variety of other goods, or, what is the same thing, the price of a greater quantity and variety of other goods, to buy with. But it will generally be impossible to supply the great and extended market, without employing a quantity of labour greater than in proportion to what had been requisite for supplying the narrow and confined one. A market which, from requiring only one thousand, comes to require annually ten thousand ton of fish, can seldom be supplied, without employing more than ten times the quantity of labour which had before been sufficient to supply it. The fish must generally be sought for at a greater distance, larger vessels must be employed, and more expensive machinery of every kind made use of. The real price of this commodity, therefore, naturally rises in the progress of improvement. It has accordingly done so, I believe, more or less in every country.

The quantity of fish brought to market is another very important kind of raw produce. Increasing its supply is also limited and uncertain. The limits depend on the country’s geography and how close its provinces are to the sea. They also depend on the number of lakes and rivers and how plentifully fish breed in them and the surrounding seas. As the population increases and the annual produce of the country’s land and labor grows, more people buy fish. These buyers also have more goods, and a greater variety of them, to buy fish with. Or, what amounts to the same thing, they have the price of those goods to spend. But supplying this large and growing market will generally require proportionally more labor than supplying the smaller one. Suppose a market that once required only 1,000 tons of fish a year comes to require 10,000 tons. Supplying it will seldom be possible without employing more than ten times as much labor as before. Fish must generally be sought farther away, larger vessels must be used, and equipment of every kind becomes more expensive. The real price of fish therefore naturally rises as a country develops. I believe this has happened, to some degree, in every country.

Though the success of a particular day’s fishing may be a very uncertain matter, yet the local situation of the country being supposed, the general efficacy of industry in bringing a certain quantity of fish to market, taking the course of a year, or of several years together, it may, perhaps, be thought is certain enough; and it, no doubt, is so. As it depends more, however, upon the local situation of the country, than upon the state of its wealth and industry; as upon this account it may in different countries be the same in very different periods of improvement, and very different in the same period; its connection with the state of improvement is uncertain; and it is of this sort of uncertainty that I am here speaking.

Though the success of a single day’s fishing may be very uncertain, the overall result is different. Given a country’s location, one might think that the amount of fish brought to market by human effort over a year or several years is fairly certain. And it undoubtedly is. However, that amount depends more on the country’s location than on its wealth and industry. For this reason, it may be the same in different countries at very different stages of development. It may also be very different in countries at the same stage. So its connection to the state of development is uncertain. This is the kind of uncertainty I am speaking of here.

In increasing the quantity of the different minerals and metals which are drawn from the bowels of the earth, that of the more precious ones particularly, the efficacy of human industry seems not to be limited, but to be altogether uncertain.

Human effort seems to have no fixed limit in increasing the minerals and metals extracted from the earth. But its effectiveness is entirely uncertain, especially for the more precious minerals and metals.

The quantity of the precious metals which is to be found in any country, is not limited by any thing in its local situation, such as the fertility or barrenness of its own mines. Those metals frequently abound in countries which possess no mines. Their quantity, in every particular country, seems to depend upon two different circumstances; first, upon its power of purchasing, upon the state of its industry, upon the annual produce of its land and labour, in consequence of which it can afford to employ a greater or a smaller quantity of labour and subsistence, in bringing or purchasing such superfluities as gold and silver, either from its own mines, or from those of other countries; and, secondly, upon the fertility or barrenness of the mines which may happen at any particular time to supply the commercial world with those metals. The quantity of those metals in the countries most remote from the mines, must be more or less affected by this fertility or barrenness, on account of the easy and cheap transportation of those metals, of their small bulk and great value. Their quantity in China and Indostan must have been more or less affected by the abundance of the mines of America.

The amount of precious metals in a country is not limited by local conditions, such as whether its mines are rich or poor. These metals are often abundant in countries with no mines. The amount in each country seems to depend on two different circumstances. The first is its purchasing power, which depends on the state of its industry and the yearly output of its land and labor. This determines how much labor and subsistence the country can afford to use to obtain luxuries like gold and silver. It can obtain them from its own mines or buy them from other countries. The second circumstance is how rich or poor the mines supplying the commercial world with these metals happen to be at any given time. The richness or poverty of those mines must also affect the amount of precious metals in countries farthest from them. Because these metals are compact and valuable, they are easy and cheap to transport. The abundance of the mines of America must have affected the amount of these metals in China and Indostan.

So far as their quantity in any particular country depends upon the former of those two circumstances (the power of purchasing), their real price, like that of all other luxuries and superfluities, is likely to rise with the wealth and improvement of the country, and to fall with its poverty and depression. Countries which have a great quantity of labour and subsistence to spare, can afford to purchase any particular quantity of those metals at the expense of a greater quantity of labour and subsistence, than countries which have less to spare.

The quantity of these metals in a particular country depends partly on the first of those two factors, purchasing power. To that extent, their real price, like that of all other luxuries and nonessentials, is likely to rise as the country grows wealthier and more advanced. It is likely to fall as the country becomes poorer and more depressed. Countries with plenty of labor and means of subsistence to spare can afford to spend more of both on a given quantity of those metals than countries with less to spare.

So far as their quantity in any particular country depends upon the latter of those two circumstances (the fertility or barrenness of the mines which happen to supply the commercial world), their real price, the real quantity of labour and subsistence which they will purchase or exchange for, will, no doubt, sink more or less in proportion to the fertility, and rise in proportion to the barrenness of those mines.

The quantity available in any country depends partly on the second of those two circumstances. This is the richness or poverty of the mines that happen to supply the commercial world. To that extent, their real price will no doubt fall as those mines become richer. It will rise as the mines become poorer. Their real price is the actual amount of labor and subsistence they can buy or be exchanged for.

The fertility or barrenness of the mines, however, which may happen at any particular time to supply the commercial world, is a circumstance which, it is evident, may have no sort of connection with the state of industry in a particular country. It seems even to have no very necessary connection with that of the world in general. As arts and commerce, indeed, gradually spread themselves over a greater and a greater part of the earth, the search for new mines, being extended over a wider surface, may have somewhat a better chance for being successful than when confined within narrower bounds. The discovery of new mines, however, as the old ones come to be gradually exhausted, is a matter of the greatest uncertainty, and such as no human skill or industry can insure. All indications, it is acknowledged, are doubtful; and the actual discovery and successful working of a new mine can alone ascertain the reality of its value, or even of its existence. In this search there seem to be no certain limits, either to the possible success, or to the possible disappointment of human industry. In the course of a century or two, it is possible that new mines may be discovered, more fertile than any that have ever yet been known; and it is just equally possible, that the most fertile mine then known may be more barren than any that was wrought before the discovery of the mines of America. Whether the one or the other of those two events may happen to take place, is of very little importance to the real wealth and prosperity of the world, to the real value of the annual produce of the land and labour of mankind. Its nominal value, the quantity of gold and silver by which this annual produce could be expressed or represented, would, no doubt, be very different; but its real value, the real quantity of labour which it could purchase or command, would be precisely the same. A shilling might, in the one case, represent no more labour than a penny does at present; and a penny, in the other, might represent as much as a shilling does now. But in the one case, he who had a shilling in his pocket would be no richer than he who has a penny at present; and in the other, he who had a penny would be just as rich as he who has a shilling now. The cheapness and abundance of gold and silver plate would be the sole advantage which the world could derive from the one event; and the dearness and scarcity of those trifling superfluities, the only inconveniency it could suffer from the other.

The richness or barrenness of the mines supplying the commercial world at any time may have no connection with the state of industry in a particular country. It seems to have no necessary connection with the state of industry in the world as a whole, either. Arts and commerce do gradually spread over more and more of the earth. As a result, the search for new mines covers a wider area. It may therefore have a somewhat better chance of success than when confined to a smaller area. But finding new mines as old ones gradually run out is highly uncertain. No human skill or effort can guarantee it. All signs of a mine's value or existence are admittedly doubtful. Only the actual discovery and successful working of a new mine can establish its value, or even its existence. In this search, there seem to be no certain limits to either the possible success or the possible disappointment of human effort. Within a century or two, new mines may be discovered that are richer than any ever known. It is equally possible that the richest mine then known may be poorer than any worked before the discovery of the mines of America. Whichever happens matters very little to the real wealth and prosperity of the world. It matters very little to the real value of the yearly output of human land and labor. The nominal value of that output would no doubt be very different. In other words, the quantity of gold and silver used to express its value would be different. But its real value, the actual quantity of labor it could purchase or command, would be precisely the same. In one case, a shilling might represent no more labor than a penny does now. In the other, a penny might represent as much labor as a shilling does now. But in the first case, someone with a shilling in his pocket would be no richer than someone with a penny today. In the second, someone with a penny would be just as rich as someone with a shilling today. The only advantage the world could gain from the first event would be cheap and abundant gold and silver plate. The only inconvenience it could suffer from the second would be the high price and scarcity of those trifling luxuries.

The greater part of the writers who have collected the money price of things in ancient times, seem to have considered the low money price of corn, and of goods in general, or, in other words, the high value of gold and silver, as a proof, not only of the scarcity of those metals, but of the poverty and barbarism of the country at the time when it took place. This notion is connected with the system of political economy, which represents national wealth as consisting in the abundance and national poverty in the scarcity, of gold and silver; a system which I shall endeavour to explain and examine at great length in the fourth book of this Inquiry. I shall only observe at present, that the high value of the precious metals can be no proof of the poverty or barbarism of any particular country at the time when it took place. It is a proof only of the barrenness of the mines which happened at that time to supply the commercial world. A poor country, as it cannot afford to buy more, so it can as little afford to pay dearer for gold and silver than a rich one; and the value of those metals, therefore, is not likely to be higher in the former than in the latter. In China, a country much richer than any part of Europe, the value of the precious metals is much higher than in any part of Europe. As the wealth of Europe, indeed, has increased greatly since the discovery of the mines of America, so the value of gold and silver has gradually diminished. This diminution of their value, however, has not been owing to the increase of the real wealth of Europe, of the annual produce of its land and labour, but to the accidental discovery of more abundant mines than any that were known before. The increase of the quantity of gold and silver in Europe, and the increase of its manufactures and agriculture, are two events which, though they have happened nearly about the same time, yet have arisen from very different causes, and have scarce any natural connection with one another. The one has arisen from a mere accident, in which neither prudence nor policy either had or could have any share; the other, from the fall of the feudal system, and from the establishment of a government which afforded to industry the only encouragement which it requires, some tolerable security that it shall enjoy the fruits of its own labour. Poland, where the feudal system still continues to take place, is at this day as beggarly a country as it was before the discovery of America. The money price of corn, however, has risen; the real value of the precious metals has fallen in Poland, in the same manner as in other parts of Europe. Their quantity, therefore, must have increased there as in other places, and nearly in the same proportion to the annual produce of its land and labour. This increase of the quantity of those metals, however, has not, it seems, increased that annual produce, has neither improved the manufactures and agriculture of the country, nor mended the circumstances of its inhabitants. Spain and Portugal, the countries which possess the mines, are, after Poland, perhaps the two most beggarly countries in Europe. The value of the precious metals, however, must be lower in Spain and Portugal than in any other part of Europe, as they come from those countries to all other parts of Europe, loaded, not only with a freight and an insurance, but with the expense of smuggling, their exportation being either prohibited or subjected to a duty. In proportion to the annual produce of the land and labour, therefore, their quantity must be greater in those countries than in any other part of Europe; those countries, however, are poorer than the greater part of Europe. Though the feudal system has been abolished in Spain and Portugal, it has not been succeeded by a much better.

Most writers who have collected ancient prices seem to have drawn the same conclusion. They saw low money prices for grain and goods generally, or, in other words, a high value of gold and silver, as evidence of two things. They thought these prices showed not only that the metals were scarce, but also that the country was poor and barbaric at the time. This idea is connected with a system of political economy. That system presents national wealth as an abundance of gold and silver, and national poverty as a scarcity of them. I shall try to explain and examine this system at great length in the fourth book of this Inquiry. For now, I shall only observe that the high value of precious metals cannot prove that a particular country was poor or barbaric at the time. It proves only that the mines supplying the commercial world at that time were not very productive. A poor country cannot afford to buy more gold and silver than a rich one. Neither can it afford to pay more for them. Their value is therefore unlikely to be higher in a poor country than in a rich one. In China, a country much richer than any part of Europe, precious metals are worth much more than in any part of Europe. Europe's wealth has indeed increased greatly since the discovery of the mines of America. During the same period, the value of gold and silver has gradually fallen. But this fall was not caused by the growth of Europe's real wealth, meaning the annual produce of its land and labour. It was caused by the accidental discovery of mines more productive than any previously known. The quantity of gold and silver in Europe increased, and its manufacturing and agriculture expanded. Although these two events happened at nearly the same time, they arose from very different causes. They have hardly any natural connection with each other. The increase in gold and silver resulted from a mere accident. Prudence and policy played no part in it and could have played none. The growth of manufacturing and agriculture resulted from the fall of the feudal system and the establishment of a new government. That government gave industry the only encouragement it needs: reasonable security that people will enjoy the fruits of their own labour. In Poland, where the feudal system still exists, the country is as poor today as it was before the discovery of America. Yet the money price of grain has risen there. The real value of precious metals has fallen in Poland, just as it has elsewhere in Europe. Their quantity must therefore have increased there as elsewhere, and in nearly the same proportion to the annual produce of its land and labour. Yet this increase in precious metals has apparently not increased Poland's annual produce. It has neither improved the country's manufacturing and agriculture nor bettered the circumstances of its inhabitants. Spain and Portugal possess the mines. Yet, after Poland, they are perhaps the two poorest countries in Europe. The value of precious metals must be lower in Spain and Portugal than anywhere else in Europe. The metals are shipped from those countries to the rest of Europe. Their price there must cover freight, insurance, and the cost of smuggling, since their export is either prohibited or subject to a duty. Their quantity in Spain and Portugal must therefore be greater than elsewhere in Europe, relative to the annual produce of their land and labour. Yet those countries are poorer than most of Europe. Although the feudal system has been abolished in Spain and Portugal, it has not been replaced by a much better system.

As the low value of gold and silver, therefore, is no proof of the wealth and flourishing state of the country where it takes place; so neither is their high value, or the low money price either of goods in general, or of corn in particular, any proof of its poverty and barbarism.

A low value of gold and silver does not prove that a country is wealthy and flourishing. Likewise, a high value of gold and silver does not prove that a country is poor and barbaric. Nor do low money prices for goods in general or for corn in particular.

But though the low money price, either of goods in general, or of corn in particular, be no proof of the poverty or barbarism of the times, the low money price of some particular sorts of goods, such as cattle, poultry, game of all kinds, etc. in proportion to that of corn, is a most decisive one. It clearly demonstrates, first, their great abundance in proportion to that of corn, and, consequently, the great extent of the land which they occupied in proportion to what was occupied by corn; and, secondly, the low value of this land in proportion to that of corn land, and, consequently, the uncultivated and unimproved state of the far greater part of the lands of the country. It clearly demonstrates, that the stock and population of the country did not bear the same proportion to the extent of its territory, which they commonly do in civilized countries; and that society was at that time, and in that country, but in its infancy. From the high or low money price, either of goods in general, or of corn in particular, we can infer only, that the mines, which at that time happened to supply the commercial world with gold and silver, were fertile or barren, not that the country was rich or poor. But from the high or low money price of some sorts of goods in proportion to that of others, we can infer, with a degree of probability that approaches almost to certainty, that it was rich or poor, that the greater part of its lands were improved or unimproved, and that it was either in a more or less barbarous state, or in a more or less civilized one.

A low money price for goods in general, or for corn in particular, does not prove that the times were poor or barbarous. But the low money price of certain goods relative to corn is decisive proof. These goods include cattle, poultry, and game of all kinds. Their low prices clearly show, first, that these goods were abundant compared with corn. They also show that these goods occupied far more land than corn did. Second, their low prices show that this land was worth less than land used for corn. As a result, the far greater part of the country’s land was uncultivated and unimproved. These prices clearly show that the country’s stock and population were small relative to its territory, compared with civilized countries. They also show that society in that country was then only in its infancy. High or low money prices for goods in general, or for corn in particular, tell us only about the mines supplying gold and silver to the commercial world at that time. They tell us whether those mines were productive or unproductive, not whether the country was rich or poor. But the money prices of some goods relative to others tell us much more. From these relative prices, we can infer with near certainty whether the country was rich or poor. We can also infer whether most of its land was improved or unimproved, and whether it was more or less barbarous or civilized.

Any rise in the money price of goods which proceeded altogether from the degradation of the value of silver, would affect all sorts of goods equally, and raise their price universally, a third, or a fourth, or a fifth part higher, according as silver happened to lose a third, or a fourth, or a fifth part of its former value. But the rise in the price of provisions, which has been the subject of so much reasoning and conversation, does not affect all sorts of provisions equally. Taking the course of the present century at an average, the price of corn, it is acknowledged, even by those who account for this rise by the degradation of the value of silver, has risen much less than that of some other sorts of provisions. The rise in the price of those other sorts of provisions, therefore, cannot be owing altogether to the degradation of the value of silver. Some other causes must be taken into the account; and those which have been above assigned, will, perhaps, without having recourse to the supposed degradation of the value of silver, sufficiently explain this rise in those particular sorts of provisions, of which the price has actually risen in proportion to that of corn.

Any rise in money prices caused entirely by a decline in the value of silver would affect all goods equally. Prices would rise across the board by a third, a fourth, or a fifth, depending on how much of its former value silver had lost. But the much discussed rise in food prices has not affected all foods equally. Even those who attribute the rise to a decline in the value of silver acknowledge this. On average over the present century, the price of grain has risen much less than that of some other foods. The rise in the price of those other foods, therefore, cannot be entirely due to a decline in silver’s value. Other causes must be considered. The causes given above may be enough to explain why some foods have risen in price relative to grain. We may not need to appeal to the supposed decline in the value of silver.

As to the price of corn itself, it has, during the sixty-four first years of the present century, and before the late extraordinary course of bad seasons, been somewhat lower than it was during the sixty-four last years of the preceding century. This fact is attested, not only by the accounts of Windsor market, but by the public fiars of all the different counties of Scotland, and by the accounts of several different markets in France, which have been collected with great diligence and fidelity by Mr Messance, and by Mr Dupré de St Maur. The evidence is more complete than could well have been expected in a matter which is naturally so very difficult to be ascertained.

As for the price of corn itself, it was somewhat lower during the first sixty-four years of this century than during the last sixty-four years of the previous century. This was before the recent extraordinary run of bad seasons. Records from Windsor market confirm this. So do the public fiars, or official grain price records, of every Scottish county. Records from several French markets also confirm it. Mr Messance and Mr Dupré de St Maur collected these records with great care and accuracy. Corn prices are naturally very difficult to establish. The evidence is therefore more complete than could reasonably have been expected.

As to the high price of corn during these last ten or twelve years, it can be sufficiently accounted for from the badness of the seasons, without supposing any degradation in the value of silver.

The high price of grain over the last ten or twelve years can be explained by bad growing seasons. There is no need to assume that silver has lost value.

The opinion, therefore, that silver is continually sinking in its value, seems not to be founded upon any good observations, either upon the prices of corn, or upon those of other provisions.

The belief that silver is continually losing value therefore seems unsupported by reliable observations of grain or other food prices.

The same quantity of silver, it may perhaps be said, will, in the present times, even according to the account which has been here given, purchase a much smaller quantity of several sorts of provisions than it would have done during some part of the last century; and to ascertain whether this change be owing to a rise in the value of those goods, or to a fall in the value of silver, is only to establish a vain and useless distinction, which can be of no sort of service to the man who has only a certain quantity of silver to go to market with, or a certain fixed revenue in money. I certainly do not pretend that the knowledge of this distinction will enable him to buy cheaper. It may not, however, upon that account be altogether useless.

It might be said that the same quantity of silver now buys much less of several kinds of food. This is true even according to the account I have given, compared with some parts of the last century. It might also be said that asking what caused this change is a pointless and useless distinction. The question is whether those goods have risen in value or silver has fallen in value. The distinction is of no use to someone who has only a certain amount of silver to spend at the market or a fixed income in money. I certainly do not claim that knowing the distinction will enable that person to buy more cheaply. But that does not mean the distinction is altogether useless.

It may be of some use to the public, by affording an easy proof of the prosperous condition of the country. If the rise in the price of some sorts of provisions be owing altogether to a fall in the value of silver, it is owing to a circumstance, from which nothing can be inferred but the fertility of the American mines. The real wealth of the country, the annual produce of its land and labour, may, notwithstanding this circumstance, be either gradually declining, as in Portugal and Poland; or gradually advancing, as in most other parts of Europe. But if this rise in the price of some sorts of provisions be owing to a rise in the real value of the land which produces them, to its increased fertility, or, in consequence of more extended improvement and good cultivation, to its having been rendered fit for producing corn; it is owing to a circumstance which indicates, in the clearest manner, the prosperous and advancing state of the country. The land constitutes by far the greatest, the most important, and the most durable part of the wealth of every extensive country. It may surely be of some use, or, at least, it may give some satisfaction to the public, to have so decisive a proof of the increasing value of by far the greatest, the most important, and the most durable part of its wealth.

It may be useful to the public because it offers an easy way to show that the country is prosperous. If the rising price of some kinds of food is entirely due to a fall in the value of silver, it shows only how productive the American mines are. Despite this fall in silver’s value, the country’s real wealth, the annual produce of its land and labor, may be gradually declining, as in Portugal and Poland. Or it may be gradually increasing, as in most other parts of Europe. But the rising price of some kinds of food may instead be due to a rise in the real value of the land that produces them. This rise in land value may come from increased fertility. Or it may come from more extensive improvement and good cultivation, which have made the land suitable for growing grain. In that case, the rise in food prices shows most clearly that the country is prosperous and advancing. Land makes up by far the largest, most important, and most durable part of the wealth of every extensive country. Surely, decisive proof that this part of its wealth is increasing in value may be useful to the public. Or it may at least give the public some satisfaction.

It may, too, be of some use to the public, in regulating the pecuniary reward of some of its inferior servants. If this rise in the price of some sorts of provisions be owing to a fall in the value of silver, their pecuniary reward, provided it was not too large before, ought certainly to be augmented in proportion to the extent of this fall. If it is not augmented, their real recompence will evidently be so much diminished. But if this rise of price is owing to the increased value, in consequence of the improved fertility of the land which produces such provisions, it becomes a much nicer matter to judge, either in what proportion any pecuniary reward ought to be augmented, or whether it ought to be augmented at all. The extension of improvement and cultivation, as it necessarily raises more or less, in proportion to the price of corn, that of every sort of animal food, so it as necessarily lowers that of, I believe, every sort of vegetable food. It raises the price of animal food; because a great part of the land which produces it, being rendered fit for producing corn, must afford to the landlord and farmer the rent and profit of corn land. It lowers the price of vegetable food; because, by increasing the fertility of the land, it increases its abundance. The improvements of agriculture, too, introduce many sorts of vegetable food, which requiring less land, and not more labour than corn, come much cheaper to market. Such are potatoes and maize, or what is called Indian corn, the two most important improvements which the agriculture of Europe, perhaps, which Europe itself, has received from the great extension of its commerce and navigation. Many sorts of vegetable food, besides, which in the rude state of agriculture are confined to the kitchen-garden, and raised only by the spade, come, in its improved state, to be introduced into common fields, and to be raised by the plough; such as turnips, carrots, cabbages, etc. If, in the progress of improvement, therefore, the real price of one species of food necessarily rises, that of another as necessarily falls; and it becomes a matter of more nicety to judge how far the rise in the one may be compensated by the fall in the other. When the real price of butcher’s meat has once got to its height (which, with regard to every sort, except perhaps that of hogs flesh, it seems to have done through a great part of England more than a century ago), any rise which can afterwards happen in that of any other sort of animal food, cannot much affect the circumstances of the inferior ranks of people. The circumstances of the poor, through a great part of England, cannot surely be so much distressed by any rise in the price of poultry, fish, wild-fowl, or venison, as they must be relieved by the fall in that of potatoes.

This may also help the public decide how much to pay some of its lower-ranking servants. The price of some provisions may have risen because silver has fallen in value. If so, their pay should certainly rise in proportion to that fall, provided it was not too high before. If their pay does not rise, its real value will clearly fall by the same proportion. But the price rise may instead result from an increase in the value of those provisions, caused by the improved fertility of the land that produces them. In that case, it is much harder to judge how much their pay should rise, or whether it should rise at all. As land is improved and cultivated, the price of every kind of animal food necessarily rises, more or less, compared with the price of grain. At the same time, the price of every kind of vegetable food, I believe, necessarily falls. Animal food becomes more expensive because much of the land that produces it becomes suitable for growing grain. That land must then provide the landlord and farmer with the rent and profit they would earn from grain. Vegetable food becomes cheaper because more fertile land produces it in greater abundance. Improved agriculture also introduces many kinds of vegetable food that reach the market much more cheaply. They require less land than grain and no more labor. Potatoes and maize, also called Indian corn, are examples. These are perhaps the two most important improvements that European agriculture, or even Europe itself, has gained from the great expansion of its commerce and navigation. In an early state of agriculture, many other vegetable foods are grown only in kitchen gardens, using spades. As agriculture improves, they are planted in ordinary fields and grown with the plow. Turnips, carrots, and cabbages are examples. As agriculture improves, then, the real price of one kind of food necessarily rises, while that of another necessarily falls. It is therefore harder to judge how far the fall in one price may make up for the rise in the other. Once the real price of butcher's meat has reached its height, later rises in the price of other animal foods cannot greatly affect the circumstances of the lower ranks. In much of England, the price of every kind of butcher's meat, except perhaps pork, seems to have reached that height more than a century ago. Surely, in much of England, any rise in the price of poultry, fish, wild birds, or venison cannot cause the poor as much hardship as a fall in the price of potatoes must relieve.

In the present season of scarcity, the high price of corn no doubt distresses the poor. But in times of moderate plenty, when corn is at its ordinary or average price, the natural rise in the price of any other sort of rude produce cannot much affect them. They suffer more, perhaps, by the artificial rise which has been occasioned by taxes in the price of some manufactured commodities, as of salt, soap, leather, candles, malt, beer, ale, etc.

In the current shortage, the high price of grain undoubtedly causes hardship for the poor. But when supplies are moderately plentiful, grain sells at its usual or average price. At such times, a natural rise in the price of any other raw product cannot affect the poor much. They suffer more, perhaps, from the artificial price increases caused by taxes on certain manufactured goods. These include salt, soap, leather, candles, malt, beer, ale, and so on.

Effects of the Progress of Improvement upon the real Price of Manufactures.

The Effects of Progress and Improvement on the Real Price of Manufactured Goods

It is the natural effect of improvement, however, to diminish gradually the real price of almost all manufactures. That of the manufacturing workmanship diminishes, perhaps, in all of them without exception. In consequence of better machinery, of greater dexterity, and of a more proper division and distribution of work, all of which are the natural effects of improvement, a much smaller quantity of labour becomes requisite for executing any particular piece of work; and though, in consequence of the flourishing circumstances of the society, the real price of labour should rise very considerably, yet the great diminution of the quantity will generally much more than compensate the greatest rise which can happen in the price.

Improvement naturally lowers the real price of almost all manufactured goods over time. The real price of the labor used to make them falls, perhaps in every case without exception. Improvement naturally brings better machinery, greater skill, and a better division and distribution of work. As a result, much less labor is needed to do any particular job. A flourishing society may cause the real price of labor to rise considerably. Even so, the reduction in the amount of labor needed will generally more than offset the greatest possible rise in its price.

There are, indeed, a few manufactures, in which the necessary rise in the real price of the rude materials will more than compensate all the advantages which improvement can introduce into the execution of the work. In carpenters’ and joiners’ work, and in the coarser sort of cabinet work, the necessary rise in the real price of barren timber, in consequence of the improvement of land, will more than compensate all the advantages which can be derived from the best machinery, the greatest dexterity, and the most proper division and distribution of work.

There are, however, a few kinds of manufacturing where the real price of raw materials must rise. The increase more than offsets all the benefits that improvements can bring to the work. This is true of carpentry, joinery, and coarser cabinetmaking. As land is improved, the real price of timber from uncultivated land must rise. This increase more than offsets all the benefits of the best machinery, the greatest skill, and the most effective division and distribution of work.

But in all cases in which the real price of the rude material either does not rise at all, or does not rise very much, that of the manufactured commodity sinks very considerably.

But whenever the real price of the raw material rises little or not at all, the manufactured product’s real price falls considerably.

This diminution of price has, in the course of the present and preceding century, been most remarkable in those manufactures of which the materials are the coarser metals. A better movement of a watch, than about the middle of the last century could have been bought for twenty pounds, may now perhaps be had for twenty shillings. In the work of cutlers and locksmiths, in all the toys which are made of the coarser metals, and in all those goods which are commonly known by the name of Birmingham and Sheffield ware, there has been, during the same period, a very great reduction of price, though not altogether so great as in watch-work. It has, however, been sufficient to astonish the workmen of every other part of Europe, who in many cases acknowledge that they can produce no work of equal goodness for double or even for triple the price. There are perhaps no manufactures, in which the division of labour can be carried further, or in which the machinery employed admits of a greater variety of improvements, than those of which the materials are the coarser metals.

During this century and the last, the fall in prices has been most striking in goods made from common metals. A better watch movement than one that cost twenty pounds around the middle of the last century may now cost perhaps twenty shillings. Prices have also fallen greatly over the same period for cutlers’ and locksmiths’ work, for all small objects made from common metals, and for all goods commonly known as Birmingham and Sheffield ware. The fall has not been quite as great as in watchmaking. Even so, it has astonished workers throughout the rest of Europe. In many cases, they admit that they cannot produce goods of equal quality for twice or even three times the price. Perhaps no other manufacturing allows a greater division of labor or offers more opportunities to improve machinery than the manufacture of goods from common metals.

In the clothing manufacture there has, during the same period, been no such sensible reduction of price. The price of superfine cloth, I have been assured, on the contrary, has, within these five-and-twenty or thirty years, risen somewhat in proportion to its quality, owing, it was said, to a considerable rise in the price of the material, which consists altogether of Spanish wool. That of the Yorkshire cloth, which is made altogether of English wool, is said, indeed, during the course of the present century, to have fallen a good deal in proportion to its quality. Quality, however, is so very disputable a matter, that I look upon all information of this kind as somewhat uncertain. In the clothing manufacture, the division of labour is nearly the same now as it was a century ago, and the machinery employed is not very different. There may, however, have been some small improvements in both, which may have occasioned some reduction of price.

During the same period, the clothing industry has seen no such noticeable fall in prices. On the contrary, I have been assured that the price of superfine cloth has risen somewhat relative to its quality over the past twenty-five or thirty years. This was said to be due to a considerable rise in the price of its material, which is entirely Spanish wool. The price of Yorkshire cloth, which is made entirely of English wool, is said to have fallen considerably relative to its quality during the present century. Quality, however, is so open to debate that I regard all such information as somewhat uncertain. In the clothing industry, the division of labor is nearly the same as it was a century ago, and the machinery used is not very different. There may, however, have been some small improvements in both, which may have brought prices down somewhat.

But the reduction will appear much more sensible and undeniable, if we compare the price of this manufacture in the present times with what it was in a much remoter period, towards the end of the fifteenth century, when the labour was probably much less subdivided, and the machinery employed much more imperfect, than it is at present.

But the reduction in price will seem much clearer and undeniable if we compare the current price of this manufactured product with its price much earlier, toward the end of the fifteenth century. At that time, labor was probably much less divided, and the machinery used was much less advanced than today.

In 1487, being the 4th of Henry VII., it was enacted, that “whosoever shall sell by retail a broad yard of the finest scarlet grained, or of other grained cloth of the finest making, above sixteen shillings, shall forfeit forty shillings for every yard so sold.” Sixteen shillings, therefore, containing about the same quantity of silver as four-and-twenty shillings of our present money, was, at that time, reckoned not an unreasonable price for a yard of the finest cloth; and as this is a sumptuary law, such cloth, it is probable, had usually been sold somewhat dearer. A guinea may be reckoned the highest price in the present times. Even though the quality of the cloths, therefore, should be supposed equal, and that of the present times is most probably much superior, yet, even upon this supposition, the money price of the finest cloth appears to have been considerably reduced since the end of the fifteenth century. But its real price has been much more reduced. Six shillings and eightpence was then, and long afterwards, reckoned the average price of a quarter of wheat. Sixteen shillings, therefore, was the price of two quarters and more than three bushels of wheat. Valuing a quarter of wheat in the present times at eight-and-twenty shillings, the real price of a yard of fine cloth must, in those times, have been equal to at least three pounds six shillings and sixpence of our present money. The man who bought it must have parted with the command of a quantity of labour and subsistence equal to what that sum would purchase in the present times.

In 1487, the fourth year of Henry VII’s reign, a law was passed. It stated that “anyone who sells a broad yard of the finest scarlet grained cloth, or other grained cloth of the finest quality, at retail for more than sixteen shillings shall forfeit forty shillings for every yard sold.” Sixteen shillings then contained about the same amount of silver as twenty-four shillings in our present money. It was therefore considered a reasonable price for a yard of the finest cloth. The law was intended to limit luxury spending, so such cloth had probably usually sold for somewhat more. A guinea may be considered the highest price today. Even if the cloths were of equal quality, the money price of the finest cloth appears to have fallen considerably since the end of the fifteenth century. And today’s cloth is most probably much better. But its real price has fallen much more. Six shillings and eightpence was then, and long afterwards, considered the average price of a quarter of wheat. Sixteen shillings was therefore the price of two quarters and more than three bushels of wheat. If we value a quarter of wheat today at twenty-eight shillings, a yard of fine cloth must then have cost the equivalent of at least three pounds six shillings and sixpence in our present money. A buyer would have given up the command of as much labour and subsistence as that sum would purchase today.

The reduction in the real price of the coarse manufacture, though considerable, has not been so great as in that of the fine.

The real price of coarse manufactured goods has fallen considerably, though not as much as the price of fine goods.

In 1463, being the 3rd of Edward IV. it was enacted, that “no servant in husbandry nor common labourer, nor servant to any artificer inhabiting out of a city or burgh, shall use or wear in their clothing any cloth above two shillings the broad yard.” In the 3rd of Edward IV., two shillings contained very nearly the same quantity of silver as four of our present money. But the Yorkshire cloth which is now sold at four shillings the yard, is probably much superior to any that was then made for the wearing of the very poorest order of common servants. Even the money price of their clothing, therefore, may, in proportion to the quality, be somewhat cheaper in the present than it was in those ancient times. The real price is certainly a good deal cheaper. Tenpence was then reckoned what is called the moderate and reasonable price of a bushel of wheat. Two shillings, therefore, was the price of two bushels and near two pecks of wheat, which in the present times, at three shillings and sixpence the bushel, would be worth eight shillings and ninepence. For a yard of this cloth the poor servant must have parted with the power of purchasing a quantity of subsistence equal to what eight shillings and ninepence would purchase in the present times. This is a sumptuary law, too, restraining the luxury and extravagance of the poor. Their clothing, therefore, had commonly been much more expensive.

In 1463, the third year of Edward IV’s reign, a law was passed: “No farm servant, common laborer, or servant to a craftsman living outside a city or town shall wear clothing made from cloth costing more than two shillings per broad yard.” At that time, two shillings contained nearly as much silver as four shillings in our present money. But Yorkshire cloth now sold at four shillings a yard is probably much better than any then made for the poorest common servants. So, for its quality, their clothing may now be somewhat cheaper even in money terms than it was in those ancient times. Its real price is certainly much lower. At that time, tenpence was considered a moderate and reasonable price for a bushel of wheat. Two shillings was therefore the price of two bushels and nearly two pecks of wheat. Today, at three shillings and sixpence a bushel, that amount would be worth eight shillings and ninepence. To buy a yard of this cloth, a poor servant had to give up the means of buying that much food. Today, that food would cost eight shillings and ninepence. This was also a sumptuary law, meant to restrain the luxury and extravagance of the poor. Their clothing must therefore commonly have been much more expensive.

The same order of people are, by the same law, prohibited from wearing hose, of which the price should exceed fourteen-pence the pair, equal to about eight-and-twenty pence of our present money. But fourteen-pence was in those times the price of a bushel and near two pecks of wheat; which in the present times, at three and sixpence the bushel, would cost five shillings and threepence. We should in the present times consider this as a very high price for a pair of stockings to a servant of the poorest and lowest order. He must however, in those times, have paid what was really equivalent to this price for them.

The same law forbade people of the same class from wearing stockings that cost more than fourteen pence a pair. That is equal to about twenty-eight pence in our present money. But in those days, fourteen pence was the price of a bushel and nearly two pecks of wheat. Today, at three shillings and sixpence a bushel, that amount of wheat would cost five shillings and threepence. We would now consider that a very high price for a pair of stockings for a servant of the poorest and lowest class. Yet in those days, such a servant would have had to pay the equivalent of that price for them.

In the time of Edward IV. the art of knitting stockings was probably not known in any part of Europe. Their hose were made of common cloth, which may have been one of the causes of their dearness. The first person that wore stockings in England is said to have been Queen Elizabeth. She received them as a present from the Spanish ambassador.

In the time of Edward IV, the art of knitting stockings was probably unknown throughout Europe. Stockings were made of ordinary cloth, which may be one reason they were expensive. Queen Elizabeth is said to have been the first person in England to wear knitted stockings. The Spanish ambassador gave them to her as a present.

Both in the coarse and in the fine woollen manufacture, the machinery employed was much more imperfect in those ancient, than it is in the present times. It has since received three very capital improvements, besides, probably, many smaller ones, of which it may be difficult to ascertain either the number or the importance. The three capital improvements are, first, the exchange of the rock and spindle for the spinning-wheel, which, with the same quantity of labour, will perform more than double the quantity of work. Secondly, the use of several very ingenious machines, which facilitate and abridge, in a still greater proportion, the winding of the worsted and woollen yarn, or the proper arrangement of the warp and woof before they are put into the loom; an operation which, previous to the invention of those machines, must have been extremely tedious and troublesome. Thirdly, the employment of the fulling-mill for thickening the cloth, instead of treading it in water. Neither wind nor water mills of any kind were known in England so early as the beginning of the sixteenth century, nor, so far as I know, in any other part of Europe north of the Alps. They had been introduced into Italy some time before.

In both coarse and fine woollen manufacturing, the machinery was much less advanced in those earlier times than it is today. Since then, it has undergone three major improvements and probably many smaller ones. The number and importance of those smaller improvements may be difficult to determine. The first major improvement was replacing the distaff and spindle with the spinning wheel. With the same amount of labour, the spinning wheel can do more than twice as much work. The second was the introduction of several ingenious machines that make winding worsted and woollen yarn easier and faster. They also simplify the arrangement of the warp and weft before they are placed in the loom. These machines save an even greater proportion of labour than the spinning wheel. Before their invention, this work must have been extremely tedious and troublesome. The third improvement was using the fulling mill to thicken cloth instead of treading it in water. At the beginning of the sixteenth century, no windmills or watermills of any kind were known in England. As far as I know, none were known elsewhere in Europe north of the Alps, either. They had been introduced 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 cost a greater quantity of labour to bring the goods to market. When they were brought thither, therefore, they must have purchased, or exchanged for the price of, a greater quantity.

These circumstances may perhaps help explain why the real price of both coarse and fine manufactured goods was much higher in ancient times than it is today. It took more labor to bring the goods to market. Therefore, once there, the goods had to buy, or sell for the price of, a greater quantity of labor.

The coarse manufacture probably was, in those ancient times, carried on in England in the same manner as it always has been in countries where arts and manufactures are in their infancy. It was probably a household manufacture, in which every different part of the work was occasionally performed by all the different members of almost every private family, but so as to be their work only when they had nothing else to do, and not to be the principal business from which any of them derived the greater part of their subsistence. The work which is performed in this manner, it has already been observed, comes always much cheaper to market than that which is the principal or sole fund of the workman’s subsistence. The fine manufacture, on the other hand, was not, in those times, carried on in England, but in the rich and commercial country of Flanders; and it was probably conducted then, in the same manner as now, by people who derived the whole, or the principal part of their subsistence from it. It was, besides, a foreign manufacture, and must have paid some duty, the ancient custom of tonnage and poundage at least, to the king. This duty, indeed, would not probably be very great. It was not then the policy of Europe to restrain, by high duties, the importation of foreign manufactures, but rather to encourage it, in order that merchants might be enabled to supply, at as easy a rate as possible, the great men with the conveniencies and luxuries which they wanted, and which the industry of their own country could not afford them.

In those ancient times, England probably produced coarse goods as countries always have when their crafts and industries are just beginning. Production probably took place in the home. Almost every family made such goods, and all its members occasionally took part in the different stages of the work. But they worked at it only when they had nothing else to do. It was not the main occupation from which any of them earned most of their living. As already noted, goods made in this way always come to market much cheaper than those made by workers who depend on the work for most or all of their living. Fine goods, on the other hand, were not made in England at that time. They were made in Flanders, a wealthy trading country. Production was probably carried on then, as it is now, by people who earned all or most of their living from it. Besides, the fine goods were foreign, so they must have been subject to some duty paid to the king. They would at least have been subject to the old customs duties of tonnage and poundage. The duty, however, was probably not very high. At that time, European policy was not to restrict imports of manufactured goods with high duties. Instead, it was to encourage imports, so merchants could supply great men as cheaply as possible. The great men wanted comforts and luxuries that their own country's industry could not provide.

The consideration of these circumstances may, perhaps, in some measure explain to us why, in those ancient times, the real price of the coarse manufacture was, in proportion to that of the fine, so much lower than in the present times.

These circumstances may perhaps help explain why, in ancient times, coarse manufactured goods had a much lower real price relative to fine goods than they do today.

I shall conclude this very long chapter with observing, that every improvement in the circumstances of the society tends, either directly or indirectly, to raise the real rent of land to increase the real wealth of the landlord, his power of purchasing the labour, or the produce of the labour of other people.

I will conclude this very long chapter with one observation. Every improvement in society tends to raise the real rent of land, either directly or indirectly. It increases the landlord's real wealth and his power to buy other people's labor or the products of their labor.

The extension of improvement and cultivation tends to raise it directly. The landlord’s share of the produce necessarily increases with the increase of the produce.

The spread of land improvement and cultivation tends to raise it directly. As the produce increases, the landlord’s share of it necessarily increases.

That rise in the real price of those parts of the rude produce of land, which is first the effect of the extended improvement and cultivation, and afterwards the cause of their being still further extended, the rise in the price of cattle, for example, tends, too, to raise the rent of land directly, and in a still greater proportion. The real value of the landlord’s share, his real command of the labour of other people, not only rises with the real value of the produce, but the proportion of his share to the whole produce rises with it.

As land is improved and cultivated more extensively, the real price of some raw products rises. This rise in turn encourages further improvement and cultivation. A rise in the price of cattle, for example, also tends to raise land rent directly, and by an even greater proportion. As the real value of the produce rises, so does the real value of the landlord’s share. This means the landlord can command more of other people’s labor. But the landlord’s share also grows as a proportion of the total produce.

That produce, after the rise in its real price, requires no more labour to collect it than before. A smaller proportion of it will, therefore, be sufficient to replace, with the ordinary profit, the stock which employs that labour. A greater proportion of it must consequently belong to the landlord.

After its real price rises, collecting the produce requires no more labor than before. Therefore, a smaller share of the produce will cover the capital used to employ that labor, with the usual profit. A larger share must consequently go to the landlord.

All those improvements in the productive powers of labour, which tend directly to reduce the rent price of manufactures, tend indirectly to raise the real rent of land. The landlord exchanges that part of his rude produce, which is over and above his own consumption, or, what comes to the same thing, the price of that part of it, for manufactured produce. Whatever reduces the real price of the latter, raises that of the former. An equal quantity of the former becomes thereby equivalent to a greater quantity of the latter; and the landlord is enabled to purchase a greater quantity of the conveniencies, ornaments, or luxuries which he has occasion for.

All improvements in workers’ productivity that directly reduce the rent price of manufactured goods indirectly raise the real rent of land. The landlord exchanges the raw produce he does not consume himself, or the money from selling it, for manufactured goods. Whatever lowers the real price of manufactured goods raises the real price of raw produce. The same quantity of raw produce can then be exchanged for a greater quantity of manufactured goods. The landlord can therefore buy more of the conveniences, ornaments, or luxuries he wants.

Every increase in the real wealth of the society, every increase in the quantity of useful labour employed within it, tends indirectly to raise the real rent of land. A certain proportion of this labour naturally goes to the land. A greater number of men and cattle are employed in its cultivation, the produce increases with the increase of the stock which is thus employed in raising it, and the rent increases with the produce.

Every increase in a society’s real wealth tends indirectly to raise the real rent of land. So does every increase in the amount of useful labor employed in the society. A certain share of this labor naturally goes to the land. More people and cattle are employed to cultivate it. As more capital is invested in cultivation, the land produces more, and rent rises with production.

The contrary circumstances, the neglect of cultivation and improvement, the fall in the real price of any part of the rude produce of land, the rise in the real price of manufactures from the decay of manufacturing art and industry, the declension of the real wealth of the society, all tend, on the other hand, to lower the real rent of land, to reduce the real wealth of the landlord, to diminish his power of purchasing either the labour, or the produce of the labour, of other people.

The opposite conditions have the opposite effect. These include neglecting farming and land improvement, and a fall in the real price of any raw product of the land. They also include a rise in the real price of manufactured goods as manufacturing skills and industry decline. A decline in the society's real wealth has the same effect. All these conditions tend to lower the real rent of land and reduce the landlord's real wealth. They also diminish his ability to purchase other people's labor or the products of that labor.

The whole annual produce of the land and labour of every country, or, what comes to the same thing, the whole price of that annual produce, naturally divides itself, it has already been observed, into three parts; the rent of land, the wages of labour, and the profits of stock; and constitutes a revenue to three different orders of people; to those who live by rent, to those who live by wages, and to those who live by profit. These are the three great, original, and constituent, orders of every civilized society, from whose revenue that of every other order is ultimately derived.

As already noted, the total annual produce of every country’s land and labor naturally divides into three parts. The same is true of the total value of that produce. The three parts are rent from land, wages from labor, and profits from capital. They provide income for three different groups: those who live on rent, those who live on wages, and those who live on profit. These are the three great, original groups that make up every civilized society. The income of every other group ultimately comes from theirs.

The interest of the first of those three great orders, it appears from what has been just now said, is strictly and inseparably connected with the general interest of the society. Whatever either promotes or obstructs the one, necessarily promotes or obstructs the other. When the public deliberates concerning any regulation of commerce or police, the proprietors of land never can mislead it, with a view to promote the interest of their own particular order; at least, if they have any tolerable knowledge of that interest. They are, indeed, too often defective in this tolerable knowledge. They are the only one of the three orders whose revenue costs them neither labour nor care, but comes to them, as it were, of its own accord, and independent of any plan or project of their own. That indolence which is the natural effect of the ease and security of their situation, renders them too often, not only ignorant, but incapable of that application of mind, which is necessary in order to foresee and understand the consequence of any public regulation.

As we have just seen, the interest of the first of these three great classes is inseparably tied to society’s general interest. Whatever promotes or hinders one necessarily promotes or hinders the other. When the public considers regulations of commerce or public administration, landowners can never mislead it to advance their own class’s interest. At least, they cannot if they have a reasonable understanding of that interest. In fact, they too often lack such understanding. They are the only one of the three classes whose income costs them neither labor nor care. It comes to them, as it were, of its own accord, regardless of any plan or project of their own. Their comfortable and secure position naturally makes them idle. This idleness too often leaves them not only ignorant but also incapable of the mental effort needed to foresee and understand the consequences of any public regulation.

The interest of the second order, that of those who live by wages, is as strictly connected with the interest of the society as that of the first. The wages of the labourer, it has already been shewn, are never so high as when the demand for labour is continually rising, or when the quantity employed is every year increasing considerably. When this real wealth of the society becomes stationary, his wages are soon reduced to what is barely enough to enable him to bring up a family, or to continue the race of labourers. When the society declines, they fall even below this. The order of proprietors may perhaps gain more by the prosperity of the society than that of labourers; but there is no order that suffers so cruelly from its decline. But though the interest of the labourer is strictly connected with that of the society, he is incapable either of comprehending that interest, or of understanding its connexion with his own. His condition leaves him no time to receive the necessary information, and his education and habits are commonly such as to render him unfit to judge, even though he was fully informed. In the public deliberations, therefore, his voice is little heard, and less regarded; except upon particular occasions, when his clamour is animated, set on, and supported by his employers, not for his, but their own particular purposes.

The interests of the second class, those who live on wages, are as closely tied to society’s interests as those of the first. As already shown, workers’ wages are highest when demand for labor keeps rising, or when the number employed increases considerably each year. When society’s real wealth stops growing, wages soon fall to barely enough to raise a family and maintain the supply of workers. When society declines, wages fall even below that level. Property owners may perhaps gain more from society’s prosperity than workers do. But no class suffers as cruelly from its decline. Although workers’ interests are closely tied to society’s, workers cannot grasp society’s interests or understand how they connect with their own. Their condition leaves them no time to get the necessary information. Even if they were fully informed, their education and habits would usually leave them unfit to judge. In public debate, therefore, their voices are seldom heard and even less often heeded. The exception comes on particular occasions, when their employers stir up, encourage, and support their outcry, not for the workers’ purposes, but for their own.

His employers constitute the third order, that of those who live by profit. It is the stock that is employed for the sake of profit, which puts into motion the greater part of the useful labour of every society. The plans and projects of the employers of stock regulate and direct all the most important operation of labour, and profit is the end proposed by all those plans and projects. But the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin. The interest of this third order, therefore, has not the same connexion with the general interest of the society, as that of the other two. Merchants and master manufacturers are, in this order, the two classes of people who commonly employ the largest capitals, and who by their wealth draw to themselves the greatest share of the public consideration. As during their whole lives they are engaged in plans and projects, they have frequently more acuteness of understanding than the greater part of country gentlemen. As their thoughts, however, are commonly exercised rather about the interest of their own particular branch of business. than about that of the society, their judgment, even when given with the greatest candour (which it has not been upon every occasion), is much more to be depended upon with regard to the former of those two objects, than with regard to the latter. Their superiority over the country gentleman is, not so much in their knowledge of the public interest, as in their having a better knowledge of their own interest than he has of his. It is by this superior knowledge of their own interest that they have frequently imposed upon his generosity, and persuaded him to give up both his own interest and that of the public, from a very simple but honest conviction, that their interest, and not his, was the interest of the public. The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market, and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can only serve to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

His employers make up the third class, those who live by profit. Capital invested for profit sets in motion most of the useful labor in every society. The plans and projects of those who invest capital govern and direct all the most important work. Profit is the goal of all their plans and projects. But the rate of profit does not rise with society’s prosperity and fall with its decline, as rent and wages do. On the contrary, it is naturally low in rich countries and high in poor ones. It is always highest in countries heading fastest toward ruin. The interests of this third class, therefore, are not connected to society’s general interest in the same way as those of the other two classes. Merchants and manufacturing owners usually employ the largest amounts of capital in this third class. Their wealth also brings them the greatest share of public attention. Because they spend their lives making plans and pursuing projects, they often have sharper minds than most country gentlemen. But they usually focus on the interests of their own particular business rather than those of society. Even when they give their opinions with complete honesty, their judgment is much more reliable about their business than about society. And they have not always spoken with complete honesty. Their advantage over the country gentleman lies less in their knowledge of the public interest than in their better understanding of their own. They have often used this better understanding to take advantage of his generosity. They have persuaded him to give up both his own interests and those of the public. He did so because he believed, simply but honestly, that their interests, not his, were the public interest. But the interests of dealers in any particular trade or manufacturing business always differ in some respects from the public interest. They even conflict with it. Dealers always have an interest in expanding the market and limiting competition. Expanding the market may often serve the public interest well enough. But limiting competition must always work against it. It can only allow dealers to raise their profits above their natural level. In effect, they impose an absurd tax on their fellow citizens for their own benefit. Any proposal for a new trade law or regulation from this class should always be heard with great caution. It should never be adopted until it has been examined at length and with great care. It calls not only for the most scrupulous attention, but also the most suspicious. The proposal comes from a class whose interests are never exactly the same as those of the public. Its members generally have an interest in deceiving and even oppressing the public. Accordingly, they have on many occasions both deceived and oppressed it.

# PRICES OF WHEAT

# PRICES OF WHEAT

PRICES OF THE QUARTER OF NINE BUSHELS OF THE BEST OR HIGHEST PRICED WHEAT AT WINDSOR MARKET, ON LADY DAY AND MICHAELMAS, FROM 1595 TO 1764 BOTH INCLUSIVE; THE PRICE OF EACH YEAR BEING THE MEDIUM BETWEEN THE HIGHEST PRICES OF THESE TWO MARKET DAYS.

PRICES FOR A QUARTER OF NINE BUSHELS OF THE BEST OR HIGHEST PRICED WHEAT AT WINDSOR MARKET, ON LADY DAY AND MICHAELMAS, FROM 1595 THROUGH 1764. EACH YEAR'S PRICE IS THE AVERAGE OF THE HIGHEST PRICES ON THOSE TWO MARKET DAYS.