 Part 2 of Chapter 11 of Book 1 of the Wealth of Nations. Part 2 of the Produce of Land which sometimes does and sometimes does not afford rent. Human food seems to be the only produce of land which always and necessarily affords some rent to the landlord. Other sorts of produce sometimes may and sometimes may not according to different circumstances. After food, clothing and lodging are the two great wants of mankind. Land in its original rude state can afford the materials of clothing and lodging to a much greater number of people than it can feed. In its improved state it can sometimes feed a greater number of people than it can supply with those materials, at least in the way in which they require them and are willing to pay for them. In the one state, therefore, there is always a superabundance of these materials which are frequently upon that account of little or no value. In the other, there is often a scarcity which necessarily augments their value. In the one state, a great part of them is thrown away as useless, and the price of what is used is considered as equal only to the labor and expense of fitting it for use, and can, therefore, afford no rent to the landlord. In the other, they are all made use of, and there is frequently a demand for more than can be had. Somebody is always willing to give more for every part of them than what is sufficient to pay the expense of bringing them to market. Their price, therefore, can always afford some rent to the landlord. The skins of the larger animals were the original materials of clothing. Among nations of hunters and shepherds, therefore, whose food consists chiefly in the flesh of those animals, every man, 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 exchanged their surplus peltry for blankets, firearms, 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 neighbors 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 neighbors. 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. The country's 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 super abundant that a great part of them would be thrown away as useless, and no part could afford any rent to the landlord. The materials of lodging cannot always be transported to so great a distance as those of clothing, and do not so readily become an object of foreign commerce. When they are super abundant 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 neighborhood of London would afford a considerable rent, and many parts of Scotland and Wales it affords none. Baren 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 anybody who would carry away the greater part of his large trees, and 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 super abundant the part made use of is worth only the labor and expense of fitting it for that use. It affords no rent to the landlord who generally grants the use of it to whoever takes the trouble of asking it. The demand of wealthier nations, however, sometimes enables him to get a rent for it. The paving of the streets of London has enabled the owners of some barren rocks on the coast of Scotland to draw a rent from what never afforded any before. The woods of Norway and of the coasts of the Baltic find a market in many parts of Great Britain, which they could not find at home and thereby afford some rent to their proprietors. Countries are populous, not in proportion to the number of people whom their produce can clothe and lodge, but in proportion to that of those whom it can feed. When food is provided it is easy to find the necessary clothing and lodging, but though these are at hand it may often be difficult to find food. In some parts of the British dominions what is called a house may be built by one day's labor of one man. The simplest species of clothing, the skins of animals, require somewhat more labor 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 labor of the whole year will be sufficient to provide them with such clothing and lodging as satisfy the greater part of the people. All the other ninety-nine parts are frequently no more than enough to provide them with food. But when, by the improvement and cultivation of land, the labor of one family can provide food for two, the labor 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 neighbor. In quality it may be very different, and to select and prepare it may require more labor 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 conveniences 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 vile 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 labor, the quantity of materials which they can work up increases in a much greater proportion than their numbers. Hence arises a demand for every sort of material which human invention can employ, either usefully or ornamentally in building, dress, equipage, or household furniture, for the fossils and minerals contained in the bowels of the earth, the precious metals, and the precious stones. Food is, in this manner, not only the original source of rent, but every other part of the produce of land which afterwards affords rent derives that part of its value from the improvement of the powers of labor in producing food by means of the improvement and cultivation of land. Those other parts of the produce of land, however, which afterwards afford rent, do not afford it always. Even in improved and cultivated countries, the demand for them is not always such as to afford a greater price than what is sufficient to pay the labor and replace, together with its ordinary profits, the stock which must be employed in bringing them to market. Whether it is or is not such depends upon different circumstances. Whether a coal mine, for example, can afford any rent depends partly upon its fertility and partly upon its situation. A mine of any kind may be said to be either fertile or barren according as the quantity of mineral which can be brought from it by a certain quantity of labor is greater or less than what can be brought by an equal quantity from the greater part of other mines of the same kind. Some coal mines, advantageously situated, cannot be wrought on account of their barrenness. The produce does not pay the expense. They can afford neither profit nor rent. There are some of which the produce is barely sufficient to pay the labor and replaced together with its ordinary profits, the stock employed in working them. They afford some profit to the undertaker of the work but no rent to the landlord. They can be wrought advantageously by nobody but the landlord who, being himself the undertaker of the work, gets the ordinary profit of the capital which he employs in it. Many coal mines in Scotland are wrought in this manner and can be wrought in no other. The landlord will allow nobody else to work them without paying some rent and nobody can afford to pay any. Other coal mines in the same country, sufficiently fertile, cannot be wrought on account of their situation. A quantity of mineral, sufficient to defray the expense of working, could be brought from the mine by the ordinary or even less than the ordinary quantity of labor. But in an inland country, thinly inhabited and without either good roads or water carriage, this quantity could not be sold. Coals are a less agreeable fuel than wood. They are said to be less wholesome. The expense of coals, therefore, at the place where they are consumed, must generally be somewhat less than that of wood. The price of wood, again, varies with the state of agriculture nearly in the same manner and exactly for the same reason as the price of cattle. In its rude beginnings, the greater part of every country is covered with wood, which is then a mere encumbrance of no value to the landlord who would gladly give it to anybody 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 prophet 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. 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 country 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 neighborhood. 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 neighbors. Their neighbors 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. Coal masters can afford no rent and can be wrought only by the proprietor. The lowest price at which coals can be sold for any considerable time is, like that of all other commodities, the price which is barely sufficient to replace, together with its ordinary profits, the stock which must be employed in bringing them to market. At a coal mine for which the landlord can get no rent, but which he must either work himself or let it alone altogether, the price of coals must generally be nearly about this price. Rent, even where coals afford one, has generally a smaller share in their price than in that of most other parts of the rude produce of land. The rent of an estate above ground commonly amounts to what is supposed to be a third of the gross produce, and it is generally a rent certain and independent of the occasional variations in the crop. In coal mines a fifth of the gross produce is a very great rent, a tenth the common rent, and it is seldom a rent certain, but depends upon the occasional variations in the produce. These are so great that in a country where thirty years purchase is considered as a moderate price for the property of a landed estate, ten years purchase is regarded as a good price for that of a coal mine. The value of a coal mine to the proprietor frequently depends as much upon its situation as upon its fertility. That of a metallic mine depends more upon its fertility and less upon its situation. The course, 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 neighborhood 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 Chile and Peru. The silver of Peru finds its way not only to Europe, but from Europe to China. The price of coals in West Moorland or Shropshire can have little effect on their price at New Castle, and their price in the Leonoy can have none at all. The productions of such distant coal mines can never be brought into competition with one another, but the productions of the most distant metallic mines frequently may and in fact commonly are. The price, therefore, of the course 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 labor 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 has 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 course and a still smaller in that of the precious metals. Labor and profit make up the greater part of both. A sixth part of the gross produce may be reckoned the average rent of the ten mines of Cornwall, the most fertile that are known in the world as we are told by the Reverend Mr. Borles, Vice-warden of the Stanaries. Some, he says, afford more and some do not afford so much. A sixth part of the gross produce is the rent too of several very fertile lead mines in Scotland. In the Silver Mines of Peru we are told by Frazier and Ulloa the proprietor frequently exacts no other acknowledgement from the undertaker of the mine but that he will grind the ore at his mill paying him the ordinary mulcher 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 ten is supposed to amount to more than five percent 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 ten was duty free. But if you add one twentieth to one sixth you will find that the whole average rent of the ten 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 ten and the 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 ten at the most fertile ten 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 course than in the precious metal. Neither are the profits of the undertakers of silver mines commonly very great in Peru. The same most respectable and well informed authors acquaint us that when any person undertakes to work a new mine in Peru he is universally looked upon as a man destined to bankruptcy and ruin and is upon that account shunned and avoided by everybody. 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 adventures to throw away their fortunes in such unprosperous projects. As the sovereign however derives a considerable part of his revenue from the produce of silver mines the law in Peru gives every possible encouragement to the discovery and working of new ones. Whoever discovers a mine is entitled to measure off 246 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 paying any acknowledgement to the landlord. The interest of the Duke of Cornwall has given occasion to a regulation nearly of the same kind in that ancient duchy. In waste and unenclosed 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 acknowledgement must be paid upon working it. In both regulations the sacred rites of private property are sacrificed to the supposed interest 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 Frazier and Ulloa to find a person who has made his fortune by a silver it is still much rare 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 Chile 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 anybody who is possessed of a small quantity of mercury. If the king's tax therefore is but ill paid upon silver it is likely to be much worse paid upon gold and rent must make a much smaller part of the price of gold than that of silver. The lowest price at which the precious metals can be sold or the smallest quantity of other goods for which they can be exchanged during any considerable time is regulated by the same principles which fix the lowest ordinary price of all other goods. The stock which must commonly be employed, the food, clothes, and lodging which must commonly be consumed and bringing them from the mind to the market determine it. It must at least be sufficient to replace that stock with the ordinary profits. Their highest price however seems not to be necessarily determined by anything but the actual scarcity or plenty of these metals themselves. It is not determined by that of any other commodity in the same manner as the price of coals is by that of wood beyond which no scarcity can ever raise it. Increase the scarcity of gold to a certain degree and the smallest bit of it may become more precious than a diamond and exchange for a greater quantity of other goods. The demand for those metals arises partly from their utility and partly from their beauty. If you accept 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 color 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 labor which it requires to collect any considerable quantity of it. A labor which nobody can afford to pay but themselves. Such objects they are willing to purchase at a higher price than things much more beautiful and useful but more common. These qualities of utility, beauty, and scarcity are the original foundation of the high price of those metals or of the great quantity of other goods for which they can everywhere be exchanged. This value was antecedent to and independent of their being employed as coin and was the quality which fitted them for that employment. That employment however by occasioning a new demand and by diminishing the quantity which could be employed in any other way may have afterwards contributed to keep up or increase their value. The demand for the precious stones arises altogether from their beauty. They are of no use but as ornaments and the merit of their beauty is greatly enhanced by their scarcity or by the difficulty and expense of getting them from the mine. Wages and profit accordingly make up upon most occasions almost the whole of the high price. Rent comes in but for a very small share, frequently for no share, and the most fertile mines only afford any considerable rent. When Tavernier, a jeweler, visited the diamond mines of Golconda and Bejapeur, he was informed that the sovereign of the country for whose benefit they were wrought had ordered all of them to be shut up except those which yielded the largest and finest stones. The other, it seems, were to the proprietor not worth the working. As the prices, both of the precious metals and of the precious stones is regulated all over the world by their price at the most fertile mine in it, the rent which a mine of either can afford to its proprietor is in proportion not to its absolute but to what may be called its relative fertility or to its superiority over other mines of the same kind. If new mines were discovered as much superior to those of Potosi as they were superior to those of Europe, the value of silver might be so much degraded as to render even the mines of Potosi not worth the working. Before the discovery of the Spanish West Indies, the most fertile mines in Europe may have afforded as great a rent to their proprietors as the richest mines in Peru do at present. Though the quantity of silver was much less, it might have exchanged for an equal quantity of other goods, and the proprietor's share might have enabled him to purchase or command an equal quantity either of labor or of commodities. The value both of the produce and of the rent, the real revenue which they afforded both to the public and to the proprietor might have been the same. The most abundant mines either of the precious metals or of the precious stones could add little to the wealth of the world. A produce of which the value is principally derived from its scarcity is necessarily degraded by its abundance. A service of plate and the other frivolous ornaments of dress and furniture could be purchased for a smaller quantity of commodities and in this would consist the sole advantage which the world could derive from that abundance. It is otherwise in estates above ground. The value both of their produce and of their rent is in proportion to their absolute and not to their relative fertility. The land which produces a certain quantity of food, clothes and lodging can always feed, clothes 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 labor of those people and of the commodities with which that labor can supply him. The value of the most barren land is not diminished by the neighborhood of the most fertile. On the contrary it is generally increased by it. The great number of people maintained by the fertile lands afford a market to many parts of the produce of the barren which they could never have found among those whom their own produce could maintain. Whatever increases the fertility of land in producing food increases not only the value of the lands upon which the improvement is bestowed but contributes likewise to increase that of many other lands by creating a new demand for their produce. That abundance of food of which in consequence of the improvement of land many people have the disposal beyond what they themselves can consume is the great cause of the demand both for the precious metals and the precious stones as well as for every other convenience 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 Saint 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 anybody who asked them. They gave them to their new guest at the first request without seeming to think that they had made them any very valuable present. They were astonished to observe the rage of the Spaniards to obtain them and had no notion that there could anywhere be a country in which many people had the disposal of so great a superfluity of food so scanty always among themselves that for a very small quantity of those glittering baubles they would willingly give as much as might maintain a whole family for many years. Could they have been made to understand this the passion of the Spaniards would not have surprised them. Part three of the variations in the proportion between the respective values of that sort of produce which always affords rent and of that which sometimes does and sometimes does not afford rent. The increasing abundance of food in consequence of the increasing improvement and cultivation must necessarily increase the demand for every part of the produce of land which is not food and which can be applied either to use or to ornament. In the whole progress of improvement it might therefore be expected there should be only one variation in the comparative values of those two different sorts of produce. The value of that sort which sometimes does and sometimes does not afford rent should constantly rise in proportion to that which always affords some rent. As art and industry advance the materials of clothing and lodging the useful fossils and materials of the earth the precious metals and the precious stones should gradually come to be more and more in demand should gradually exchange for a greater and a greater quantity of food or in other words should gradually become dearer and dearer. This accordingly has been the case with most of these things upon most occasions and would have been the case with all of them upon all occasions if particular accidents had not upon some occasions increased the supply of some of them in a still greater proportion than the demand. The value of a free stone quarry for example will necessarily increase with the increasing improvement in population of the country round about it especially if it should be the only one in the neighborhood. 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 in 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 neighborhood 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 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 labor or exchange for a smaller and a smaller quantity of corn the principal part of the subsistence of the laborer. The great market for silver is the commercial and civilized part of the world. If by the general progress of improvement the demand of this market should increase while at the same time the supply did not increase in the same proportion the value of silver would gradually rise in proportion to that of corn. Any given quantity of silver would exchange for a greater and a greater quantity of corn or in other words the average money price of corn would gradually become cheaper and cheaper. If on the contrary the supply by some accident should increase for many years together in a greater proportion than the demand that metal would gradually become cheaper and cheaper or in other words the average money price of corn would in spite of all improvements gradually become dearer and dearer. But if on the other hand the supply of that metal should increase nearly in the same proportion as the demand it would continue to purchase or exchange for nearly the same quantity of corn and the average money price of corn would in spite of all improvements continue very nearly the same. These three seem to exhaust all the possible combinations of events which can happen in the progress of improvement and during the course of the four centuries preceding the present if we may judge by what has happened both in France and Great Britain each of those three different combinations seems to have taken place in the European market and nearly in the same order too in which I have here set them down. End of Book 1 Chapter 11 Part 2 Part 3 of Chapter 11 of Book 1 of The Welfth of Nations This is a LibriVox recording All LibriVox recordings are in the public domain For more information or to volunteer please visit LibriVox.org Recording by Stephen Escalera The Welfth of Nations by Adam Smith Part 3 of Chapter 11 of Book 1 Of The Rent of Land Digression concerning the variations in the value of silver during the course of the four last centuries First period In 1350 and for some time before the average price of the quarter of wheat in England seems not to have been estimated lower than four ounces of silver tower weight equal to about 20 shillings of our present money From this price it seems to have fallen gradually to two ounces of silver equal to about 10 shillings of our present money the price at which we find it estimated in the beginning of the 16th century and at which it seems to have continued to be estimated till about 1570 In 1350 being the 25th of Edward III was enacted what is called the Statute of Laborers In the preamble it complains much of the insolence of servants who endeavored to raise their wages upon their masters It therefore ordains that all servants and laborers should for the future be contended 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 10 pence a bushel and that it should always be in the option of the master to deliver them either the wheat or the money 10 pence a bushel therefore had in the 25th of Edward III been reckoned to 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 10 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 10 pence 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 eight pence of the money of those times and to near 20 shillings of that of the present must have been reckoned a moderate price for the quarter of eight bushels This statute is surely a better evidence of what was reckoned in those times a moderate price of grain than the prices of some particular years which have generally been recorded by historians and other writers on account of their extraordinary dearness or cheapness and from which therefore it is difficult to form any judgment concerning what may have been the ordinary price There are besides other reasons for believing that in the beginning of the 14th century and for some time before the common price of wheat was not less than four ounces of silver the quarter and that of other grain in proportion In 1309 Ralph DeBorn 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 first fifty-three quarters of wheat which cost nineteen pounds or seven shillings and two pence a quarter equal to about one and twenty shillings and six pence of our present money Secondly 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 Thirdly twenty quarters of oats which cost four pounds or four shillings a quarter equal to about twelve shillings of our present money The prices of malt and oats seem here to lie higher than their ordinary proportion to the price of wheat These prices are not recorded on account of their extraordinary dearness or cheapness but are mentioned accidentally as the prices actually paid for large quantities of grain consumed at a feast which was famous for its magnificence In twelve sixty-two being the fifty-first of Henry the third 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 the second 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 the statute was first enacted and must have continued to be so in the fifty first of Henry the third We cannot therefore be very wrong in supposing that the middle price was not less than one third of the highest price at which the statute regulates the price of bread or then six shillings and eight pence of the money of those times containing four ounces of silver, tower weight From these different facts therefore we seem to have some reason to conclude that about the middle of the fourteenth century and for a considerable time before the average or ordinary price of the quarter of wheat was not supposed to be less than four ounces of silver, tower weight From about the middle of the fourteenth to the beginning of the sixteenth century what was reckoned the reasonable and moderate that is the ordinary or average price of wheat seems to have sunk gradually to about one half of this price so as at last to have fallen to about two ounces of silver, tower weight equal to about ten shillings of our present money it continued to be estimated at this price till about 1570 In the Household Book of Henry the fifth Earl of Northumberland drawn up in 1512 there are two different estimations of wheat and one of them it is computed at six shilling and eight pence the quarter and the other at five shillings and eight pence only In 1512 six shillings and eight pence contained only two ounces of silver tower weight and were equal to about ten shillings of our present money From the 25th of Edward III to the beginning of the reign of Elizabeth during the space of more than 200 years six shillings and eight pence 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 worthwhile to attend to this circumstance Thus, in 1436 it was enacted that wheat might be exported without a license when the price was so low as six shillings and eight pence and in 1463 it was enacted that no wheat should be imported if the price was not above six shillings and eight pence the quarter The legislature had imagined that when the price was so low there could be no inconvenience in exportation but that when it rose higher it became prudent to allow of importation Six shillings and eight pence therefore containing about the same quantity of silver as 13 shillings and four pence of our present money one third part less than the same nominal sum contained in the time of Edward III had in those times been considered as what is called the moderate and reasonable price of wheat in 1554 by the first and second of Philip and Mary and in 1558 by the first of Elizabeth the exportation of wheat was in the same manner prohibited whenever the price of the quarter should exceed six shillings and eight pence which did not then contain too 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 wheat was allowed from certain ports whenever the price of the quarter should not exceed 10 shillings containing nearly the same quantity of silver as the like nominal sum does at present this price had at this time therefore been considered as what is called the moderate and reasonable price of wheat it agrees nearly with the estimation of the Northumberland book in 1512 that in France the average price of grain was in the same manner much lower in the end of the 15th and beginning of the 16th century then in the two centuries preceding has been observed both by Mr. Dupré de Saint-Marx and by the elegant author of the essay on the policy of grain its price during the same period had probably sunk in the same manner through the greater part of Europe this rise in the value of silver in proportion to that of corn may either have been owing altogether to the increase of the demand for that metal and consequence of increasing improvement and cultivation the supply in the meantime 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 15th and beginning of the 16th centuries the greater part of Europe was approaching towards a more settled form of government then it had enjoyed for several ages before the increase of security would naturally increase industry and improvement and the demand for the precious metals as well as for every other luxury and ornament would naturally increase with the increase of riches a greater annual produce would require a greater quantity of coin to circulate it and a greater number of rich people would require a greater quantity of plate and other ornaments of silver it is natural to suppose too that the greater part of the mines which then supplied the European market with silver might be a good deal exhausted and have become more expensive in the working they had been wrought many of them from the time of the Romans it has been the opinion however of the greater part of those who have written upon the prices of commodities in ancient times that from the conquest perhaps from the invasion of Julius Caesar till the discovery of the mines of America the value of silver was continually diminishing this opinion they seem to have been led into partly by the observations which they had occasioned 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 its quantity increases in their observations upon the prices of corn three different circumstances seem frequently to have misled them first in ancient times almost all rents were paid in kind in a certain quantity of corn cattle poultry etc it sometimes happened however that the landlord would stipulate that he should be at liberty to demand of the tenant either the annual payment in kind or a certain sum of money instead of it the price at which the payment in kind was in this manner exchanged for a certain sum of money is in Scotland called the conversion price as the option is always in the landlord to take either the substance or the price it is necessary for the safety of the tenant that the conversion price should rather be below than above the average market price in many places accordingly it is not much above one half of this price through the greater part of Scotland this custom still continues with regard to poultry and in some places with regard to cattle it might probably have continued to take place too with regard to corn had not the institution of public fires put an into 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 fires 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 acknowledgement till after transcribing this conversion price 15 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 16 shillings of our present money but in 1562 the year at which he ends with it it contained no more than the same nominal sum does at present secondly they have been misled by the slovenly manner in which some ancient statutes of a size had been sometimes transcribed by lazy copiers and sometimes perhaps actually composed by the legislature the ancient statutes of a size 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 labor and judging I suppose that this was enough to show what proportion ought to be observed in all higher places thus in the size 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 20 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. Ruffin were printed the copiers had never transcribed this regulation beyond the price of 12 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 18 shillings of our present money was the ordinary or average price of wheat at that time in the statute of tumble and pillory enacted nearly about the same time the price of ale is regulated according to every six pence 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 of the prices whether higher or lower we may infer from the last words of the statute at sick daying hips crescuteur vel diminuture persex denerios 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 six pence rise or fall in the price of barley in the composition of this statute the legislature itself seems to have been as negligent as the copiers were in the transcription of the other in an ancient manuscripts of the regium majestatum an old scotch law book there is a statute of a size in which the price of bread is regulated according to all the different prices of wheat from 10 pence to three shillings the scotch bowl equal to about half an english quarter three shillings scotch at the time when this a size is supposed to have been enacted were equal to about nine shilling sterling of our present money Mr. Ruderman seems to conclude from this that three shillings was the highest price to which wheat ever rose in those times and that 10 pence 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 you shall judge of the remaining cases according to what is above written having respect to the price of corn thirdly they seem to have been misled to 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 anything 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 plantagenet 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 neighboring barren 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 tutors who governed england during the latter part of the fifteenth and through the whole of the sixteenth century no barren was powerful enough to dare disturb the public security the reader will find at the end of this chapter all the prices of wheat which have been collected by fleetwood from 1202 to 1597 both inclusive reduced to the money of the present times and digested according to the order of time into seven divisions of twelve years each at the end of each division two 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 eaton 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 anything at all they confirm the account which I have been endeavoring to give fleetwood himself however seems with most other riders 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 his opinion they agree perfectly with that of Mr. Dupri de Semal and with that which I have been endeavoring to explain bishop fleetwood and Mr. Dupri de Semal 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 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 riders have inferred the great value of silver in those very ancient times corn it has been said being a sort of manufacturer was in those rude ages much dear in proportion than the greater part of other commodities it has 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 labor 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 then 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 half penny sterling however we are told by Ulloa was not many years ago at Buenos Aires the price of an ox chosen from a herd of three or four hundred sixteen shilling sterling we are told by Mr. Byron was the price of a good horse in the capital of Chile 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 labor 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 labor it must always be remembered and not any particular commodity or set of commodities is the real measure of the value both of silver and of all other commodities but in countries almost waste or but thinly inhabited cattle poultry game of all kinds etc as they are the spontaneous productions of nature so she frequently produces them in much greater quantities than the consumption of the inhabitants requires in such a state of things the supply commonly exceeds the demand in different states of society in different states of improvement therefore such commodities will represent or be equivalent to very different quantities of 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 labor or what comes to the same thing the price of nearly equal quantities the continual increase of the productive powers of labor 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 labor than equal quantities of any other part of the rude produce of land corn accordingly it has already been observed is in all the different stages of wealth and improvement a more accurate measure of value than any other commodity or set of commodities in all those different stages therefore we can judge better of the real value of silver by comparing it with corn than by comparing it with any other commodity or set of commodities corn besides or whatever else is the common and favorite vegetable food of the people constitutes in every civilized country the principal part of the subsistence of the laborer 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 laborer everywhere lives chiefly upon the wholesome food that is cheapest and most abundant butcher's meat except in the most thriving countries or where laborer 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 laborer is somewhat better rewarded than in France the laboring poor seldom eat butcher's meat except upon holidays and other extraordinary occasions the money price of laborer therefore depends much more upon the average money price of corn the subsistence of the laborer then 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 laborer which they can purchase or command depends much more upon the quantity of corn which they can purchase or command then upon that of butcher's meat or any other part of the rude produce of land such slight observations however upon the prices either of corn or of other commodities would not probably have misled so many intelligent authors influenced at the same time by the popular notion that as the quantity of silver naturally increases in every country with the increase of wealth so its value diminishes as its quantity increases this notion however seems to be altogether groundless the quantity of the precious metals may increase in any country from two different causes either first from the increased abundance of the mines which supply it or secondly from the increased wealth of the people from the increased produce of their annual labor the first of these causes is no doubt necessarily connected with the diminution of the value of the precious metals but the second is not when more abundant mines are discovered a greater quantity of the precious metals is brought to market and the quantity of the necessaries and conveniences of life for which they must be exchanged being the same as before equal quantities of the metals must be exchanged for smaller quantities of commodities so far therefore as the increase of the quantity of the precious metals in any country arises from the increased abundance of the mines it is necessarily connected with some diminution of their value when on the contrary the wealth of any country increases when the annual produce of its labor 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 then in times of poverty and depression so gold and silver are not likely to be worse paid for the price of gold and silver when the accidental discovery of more abundant mines does not keep it down as it naturally rises with the wealth of every country so whatever be the state of the mines it is at all times naturally higher in a rich than in a poor country gold and silver like all other commodities naturally seek the market where the best price is given for them and the best price is commonly given for everything in the country which can best afford it labor it must be remembered is the ultimate price which is paid for everything and in countries where labor is equally well rewarded the money price of labor will be in proportion to that of the subsistence of the laborer 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 then 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 worst 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 anywhere in Europe England is a much richer country than Scotland but the difference between the money price of corn in those two countries is much smaller and is but just perceptible in proportion to the quantity or measure Scotch corn generally appears to be a good deal cheaper than English but in proportion to its quality it is certainly somewhat dearer Scotland receives almost every year very large supplies from England and every commodity must commonly be somewhat dearer in the country to which it is brought than in that from which it comes English corn therefore must be dearer in Scotland than in England and yet in proportion to its quality or to the quantity and goodness of the flour or meal which can be made from it it cannot commonly be sold higher there than the Scotch corn which comes to market in competition with it the difference between the money price of labor in China and in Europe is still greater than that between the money price of subsistence because the real recompense of labor 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 labor is lower in Scotland than in England because the real recompense of labor is much lower Scotland though advancing to greater wealth advances much more slowly than England the frequency of immigration from Scotland and the rarity of it from England sufficiently prove that the demand for labor is very different in the two countries the proportion between the real recompense of labor in different countries it must be remembered is naturally regulated not by their actual wealth or poverty but by their advancing stationary or declining condition gold and silver as they are naturally of the greatest value among the richest so they are naturally of the least value among the poorest nations among savages the poorest of all nations they are scarce of any value in great towns corn is always dearer than in remote parts of the country this however is the effect not of the real cheapness of silver but of the real dearness of corn it does not cost less labor to bring silver to the great town than to the remote parts of the country but it costs a great deal more to bring corn in some very rich and commercial countries such as Holland and the territory of Genoa corn is dear for the same reason that it is dear in great towns they do not produce enough to maintain their inhabitants they are rich in the industry and skill of their artificers and manufacturers in every sort of machinery which can facilitate and abridge labor 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 labor to bring silver to Amsterdam than to Danzig but it cost 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 the 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 necessities 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 the real price the quantity of labor which they can purchase or command rises in times of poverty and distress and sinks in times of opulence and prosperity which are always times of great abundance for they could not otherwise be times of opulence and prosperity corn is a necessary silver is only a superfluity whatever therefore may have been the increase in the quantity of the precious metals which during the period between the middle of the 14th and that of the 16th century arose from the increase of wealth and improvement it could have no tendency to diminish their value either in Great Britain or in any other part of Europe if those who have collected the prices of things in ancient times therefore had during this period no reason to infer the diminution of the value of silver from any observations which they had made upon the prices either of corn or of other commodities they had still less reason to infer it from any supposed increase of wealth and improvement second period but how various so ever may have been the opinions of the learned concerning the progress of the value of silver during the first period they are unanimous concerning it during the second from about 1570 to about 1640 during a period of about 70 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 labor 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 10 shillings of our present money came to be sold for 6 and 8 ounces of silver the quarter or about 30 and 40 shillings of our present money the discovery of the abundant minds 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 everybody 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 exceeding that of the demand that the value of that metal sunk considerably the discovery of the minds 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 minds of Potosi had been discovered more than 20 years before from 1595 to 1620 both inclusive the average price of the quarter of nine bushels of the best wheat at Windsor market appears from the accounts of Eaton College to have been two pounds one shilling six and nine thirteenth pence from which some neglecting the fraction and deducting a ninth or four shillings seven and one third pence the price of the quarter of eight bushels comes out to have been one pound sixteen shillings and ten and two third pence and from this some neglecting likewise the fraction and deducting a ninth or four shillings one and one ninth pence 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 one pound twelve shillings eight and eight ninth pence or about six ounces and one third of an ounce of silver from 1621 to 1636 both inclusive the average price of the same measure of the best wheat at the same market appears from the same accounts to have been two pound ten shillings 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 one pound nineteen shilling six pence or about seven ounces and two thirds of an ounce of silver end of book one chapter 11 part three part four of chapter 11 of book one of the wealth of nations this is a LibriVox recording all LibriVox recordings are in the public domain for more information or to volunteer please visit LibriVox.org recording by Stephen Escalara the wealth of nations by Adam Smith part four of chapter 11 of book one of the rent of land third period between 1630 and 1640 or about 1636 the effect of the discovery of the minds 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 sometime before the end of the last from 1637 to 1700 both inclusive being the 64 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 two pound eleven shillings and a third pence which is only one shilling and one third pence dearer than it had been during the 16 years before but in the course of these 64 years there happen 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 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 neighborhood 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 four pound five shillings and in 1649 to have been four pound the quarter of nine bushels the excess of those two years above two pound ten shillings the average price of the 16 years preceding 1637 is three pounds five shillings which divided among the 64 last years of the last century will alone very nearly account for that small enhancement of price which seems to have taken place in them these however though the highest are by no means the only high prices which seem to have been occasioned by the civil wars the second event was the bounty upon the exportation of corn granted in 1688 the bounty it has been thought by many people by encouraging tillage may in a long course of years have occasioned a greater abundance and consequently a greater cheapness of corn in the home market than what would otherwise have taken place there how far the bounty could produce this effect at any time I shall examine hereafter I shall only observe at present that between 1688 and 1700 it had not time to produce any such effect during this short period its only effect must have been by encouraging the exportation of the surplus produce of every year and thereby hindering the abundance of one year from compensating the scarcity of another to raise the price in the home market the scarcity which prevailed in England from 1693 to 1699 both inclusive though no doubt principally owing to the badness of the seasons and therefore extending through a considerable part of Europe must have been somewhat enhanced by the bounty in 1699 accordingly the further exportation of corn was prohibited for nine months there was a third event which occurred in the course of the same period in 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. Laundice the current silver coin was at an average near 5 and 20 percent below its standard value but the nominal sum which constitutes the market price of every commodity is necessarily regulated not so much by the quantity of silver which according to the standard ought to be contained in it as by that which it is found by experience actually is contained in it this nominal sum therefore is necessarily higher when the coin is much debased by clipping and wearing than when near to its standard value in the course of the present century the silver coin has not at any time been more below its standard weight than it is at present but though very much defaced its value has been kept up by that of the gold coin for which it is exchanged for though before the late recoinage the gold coin was a good deal defaced too it was less so than the silver in 1695 on the contrary the value of the silver coin was not kept up by the gold coin a guinea then commonly exchanging for 30 shillings of the worn and clipped silver before the late recoinage of the gold the price of silver bullion was seldom higher than five shillings and six pence an ounce which is but five pence above the mint price but in 1695 the common price of silver bullion was six shillings and five pence an ounce which is 15 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 percent below its standard value in 1695 on the contrary it had been supposed to be near five and 20 percent 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 near 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 64 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 Eaton college to have been two pound six and ten thirty second pence which is about ten shillings and six pence or more than five and twenty percent cheaper than it had been during the 64 last years of the last century and about nine shillings and six pence cheaper than it had been during the 16 years preceding 1636 when the discovery of the abundant minds of America may be supposed to have produced its full effect and about one shilling cheaper than it had been in the 26 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 the 64 first years of the present century comes out to have been about 32 shillings the quarter of eight bushels the value of silver therefore seems to have risen somewhat in proportion to that of corn during the course of the present century and it had probably begun to do so even sometime before the end of the last in 1687 the price of the quarter of nine bushels of the best wheat at Windsor market was one pound five shillings two pence the lowest price at which it had ever been from 1595 in 1688 mr. Gregory King a man famous for his knowledge and matters of this kind estimated the average price of wheat in years of moderate plenty to be to the grower three shillings six pence the bushel or 80 and 20 shillings the quarter the growers 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 20 shillings the quarter to be at that time the ordinary contract price in years of moderate plenty before the scarcity occasion by the late extraordinary course of bad seasons it was I have been assured the ordinary contract price in all common years in 1688 was granted the parliamentary bounty upon the exportation of corn the country gentleman 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 the first and second it was to take place therefore till wheat was so high as 48 shillings the quarter that is 20 shillings a five seventh dearer than mr. King had in that very year estimated the growers 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 40 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 gentleman from whom it was at that very time soliciting the first establishment of the annual land tax the value of silver therefore in proportion to that of corn had probably risen somewhat before the end of the last century and it seems to have continued to do so during the course of the greater part of the present though the necessary operation of the bounty must have hindered that rise from being so sensible as it otherwise would have been in the actual state of tillage in plentiful years the bounty by occasioning and extraordinary exportation necessarily raises the price of corn above what it otherwise would be in those years to encourage tillage by keeping up the price of corn even in the most plentiful years was the avowed end of the institution in years of great scarcity indeed the bounty has generally been suspended it must however have had some effect upon the prices of many of those years by the extraordinary exportation which at occasions in years of plenty it must frequently hinder the plenty of one year from compensating the scarcity of another both in years of plenty and in years of scarcity therefore the bounty raises the price of corn above what it naturally would be in the actual state of tillage if during the sixty four first years of the present century therefore the average price has been lower than during the sixty four last years of the last century it must in the same state of tillage have been much more so had it not been for this operation of the bounty but without the bounty it may be said the state of tillage would not have been the same what may have been the effects of this institution upon the agriculture of the country I shall endeavor 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 and 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 to by three very faithful diligent and laborious collectors of the prices of corn mr. de prie de sement mr. missance 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 not withstanding this prohibition should in another be owing to the extraordinary encouragement given to exportation it would be more proper perhaps to consider this variation in the average money price of corn as the effect rather of some gradual rise in the real value of silver in the european market then 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 minds 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 64 first years of the present century therefore the average money price of corn has fallen somewhat below what it had been during the greater part of the last century we should in the same manner impute this change not to any fall in the real value of corn but to some rise in the real value of silver in the european market the high price of corn during these 10 or 12 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 unfavorableness of the seasons and ought therefore to be regarded not as a permanent but as a transitory and occasional event the seasons for these 10 or 12 years past have been unfavorable 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 and former times will be at no loss to recollect several other examples of the same kind 10 years of extraordinary scarcity besides are not more wonderful than 10 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 10 years from 1741 to 1750 the average price of the quarter of nine bushels of the best wheat at wedzmer market it appears from the accounts of eaton college was only one pound 13 shillings nine and four fifths pence which is nearly six shillings three pence below the average price of the 64 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 10 years only one pound six shillings eight pence 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 10 years the quantity of all sorts of grain exported it appears from the custom house books amounted to no less than eight million 29156 quarters one bushel the bounty paid for this amounted to one million 514962 pounds 17 shillings four and a half pence 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 324176 pounds 10 shillings six pence it is unnecessary to observe how much this forced exportation must have raised the price of corn above what it otherwise would have been in the home market at the end of the accounts annexed to this chapter and the reader will find the particular account of those 10 years separated from the rest he will find there too the particular account of the preceding 10 years of which the average is likewise below though not so much below the general average of the 64 first years of the century the year 1740 however was a year of extraordinary scarcity these 20 years preceding 1750 may very well be set in opposition to the 20 preceding 1770 as the former were a good deal below the general average of the century notwithstanding the intervention of one or two dear years so the latter have been a good deal above it notwithstanding the intervention of one or two cheap ones of 1759 for example if the former have not been as much below the general average as the latter have been above it we ought probably to impute it to the bounty the change has evidently been too sudden to be ascribed to any change in the value of silver which is always slow and gradual the suddenness of the effect can be accounted for only by a cause which can operate suddenly the accidental variations of the seasons the money price of labor 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 labor 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 labor 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 labor are there said to have been pretty uniformly about the 20th part of the average price of the sepsia of wheat a measure which contains a little more than four winchester bushels in great britain the real recompense of labor it has already been shown the real quantities of the necessaries and conveniences of life which are given to the labor 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 labor in the particular market of great britain owe into the peculiarly happy circumstances of the country for some time after the first discovery of america silver would continue to sell at its former or not much below its former price the profits of mining would for some time be very great and much above their natural rate those who imported that metal into europe however would soon find that the whole annual importation could not be disposed of at this high price silver would gradually exchange for a smaller and a smaller quantity of goods its price would sink gradually lower and lower till it fell to its natural price or to what was just sufficient to pay according to their natural rates the wages of the labor the profits of the stock and the rent of the land which must be paid in order to bring it from the mine to the market in the greater part of the silver mines of peru the tax of the king of spain amounting to a tenth of the gross produce eats up it has already been observed the whole rent of the land this tax was originally a half it soon afterwards fell to a third then to a fifth and at last to a tenth at which late it still continues in the greater part of the silver mines of peru this it seems is all that remains after replacing the stock of the undertaker of the work together with its ordinary profits and it seems to be universally acknowledged that these profits which were once very high are now as low as they can well be consistently with carrying on the works the tax of the king of spain was reduced to a fifth of the registered silver in 1504 one and 40 years before 1545 the date of the discovery of the mines of patosi in the course of 90 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 90 years is time sufficient to reduce any commodity of which there is no monopoly to its natural price or to the lowest price at which while it pays a particular tax it can continue to be sold for any considerable time together the price of silver in the european market might perhaps have fallen still lower and it might have become necessary either to reduce the tax upon it not only to one-tenth as in 1736 but to one-twentieth in the same manner as that upon gold or to give up working the greater part of the american mines which are now wrought the gradual increase of the demand for silver or the gradual enlargement of the market for the produce of the silver mines of america is probably the cause which has prevented this from happening and which has not only kept up the value of silver in the european market but has perhaps even raised it somewhat higher than it was about the middle of the last century since the first discovery of america the market for the produce of its silver mines has been growing gradually more and more extensive first 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 manufacturers 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 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 16th 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 the fifth who had traveled so frequently through both countries that everything abounded in france but that everything was wanting in spain the increasing produce of the agriculture and manufacturers of europe must necessarily have required a gradual increase in the quantity of silver coin to circulate it and the increasing number of wealthy individuals must have required the like increase in the quantity of their plate and other ornaments of silver secondly america is itself a new market for the produce of its own silver mines and as its advances in agriculture industry and population are much more rapid than those of the most thriving countries in europe its demand must increase much more rapidly the english colonies are altogether a new market which partly for coin and partly for plate requires a continual augmenting supply of silver through a great continent where there never was any demand before the greater part two 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 coin money of any kind their whole commerce was carried on by barter and there was accordingly scarce any division of labor 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 manufacturer to europe the spanish armies though they scarce ever exceeded 500 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 everywhere they went in countries too which at the same time are represented as very populace and well cultivated sufficiently demonstrate that the story of this populace and high cultivation is in a great measure fabulous the spanish colonies are under a government in many respects less favorable to agriculture improvement and population than that of the english colonies they seem however to be advancing in all those much more rapidly than in 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 frazier who visited peru in 1713 represents lima as containing between 25 and 28 thousand inhabitants uya who resided in the same country between 1740 and 1746 represents it as containing more than 50 000 the difference in their accounts of the populace of several other principal towns of chili and peru is nearly the same and as there seems to be no reason to doubt of the good information of either it marks an increase which is scarce inferior to that of the english colonies america therefore is a new market for the produce of its own silver mines of which the demand must increase much more rapidly than that of the most thriving country in europe thirdly the east indies is another market for the produce of the silver mine 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 16th 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 in 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 the land through cyberia and tartary to piquing the east india trade of all these nations if we accept that of the french which the last war had well nigh annihilated has been almost continually augmenting the increase in consumptions of east india goods in europe is it seems so great as to afford a gradual increase of employment to them all t for example was a drug very little used in europe before the middle of the last century at present the value of the t 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 gottenberg 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 maluccas of the peace goods of bingo and of innumerable other articles has increased very nearly in a like proportion the tonnage accordingly of all the european shipping employed in the east india trade at any one time during the last century was not perhaps much greater than that of the english east india company before the late reduction of their shipping but in the east indies particularly in china and indistan 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 to 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 super abundance of food to dispose of beyond what they themselves can consume have the means of purchasing a much greater quantity of the labor of other people the retinue of a grand d in china or indistan accordingly is by all accounts much more numerous and splendid than that of the richest subjects in europe the same super abundance 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 seemed 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 good deal lower in the one country than in the other but the real price of labor the real quantity of the necessaries of life which is given to the labor it has already been observed is lower both in china and indistan the two great markets of india than it is through the greater part of europe the wages of the labor 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 labor 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 manufacturers will be in proportion to the money price of labor and in manufacturing art and industry china and indistan though inferior seem not to be much inferior to any part of europe the money price of the greater part of manufacturers therefore will naturally be much lower in those great empires than it is anywhere in europe through the greater part of europe too the expensive increases very much both the real and nominal price of most manufacturers it costs more labor and therefore more money to bring first the materials and afterwards the complete manufacturer to market in china and indistan the extent and variety of inland navigations save the greater part of this labor and consequently of this money and thereby reduce still lower both the real and the nominal price of the greater part of their manufacturers 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 labor and commodities which it costs in europe will purchase or command a greater quantity of labor and commodities in india it is more advantageous to 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 10 or at most as 12 to 1 whereas in europe it is as 14 or 15 to 1 in china and the greater part of the other markets of india 10 or at most 12 ounces of silver will purchase an ounce of gold in europe it requires from 14 to 15 ounces in the car goes 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 aquapoco ships which sail to manila 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 and a great measure that those distant parts of the world are connected with one another in order to supply so very widely extended a market the quantity of silver annually brought from the mines must not only be sufficient to support that continued increase both of coin and of plate which is required in all thriving countries but to repair that continual waste and consumption of silver which takes place in all countries where that metal is used the continual consumption of the precious metals and 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 manufacturers 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 manufacturers 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 50 000 pounds sterling we may from fence form some notion how great must be the annual consumption in all the different parts of the world either in manufacturers 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 and the greater part of the governments of asia besides the almost universal custom of concealing treasures in the bowels of the earth of which the knowledge frequently dies with the person who makes the concealment must occasion the loss of a still greater quantity the quantity of gold and silver imported at both katis and lisbon including not only what comes under register but what may be supposed to be smuggled amounts according to the best accounts to about six millions sterling a year according to mr. megan's the annual importation of the precious metals into spain at an average of six years namely from 1748 to 1753 both inclusive and into portugal at an average of seven years namely from 1747 to 1753 both inclusive amounted in silver to one million one hundred and one thousand one hundred and seven pounds weight and in gold to 49,940 pounds weight the silver at 62 shillings the pound troy amounts to three million four hundred and thirteen thousand four hundred and thirty one pound ten shilling sterling the gold at 44 guineas and a half the pound troy amounts to two million three hundred and thirty three thousand four hundred and forty six pounds fourteen shilling sterling both together amount to five million seven hundred and forty six thousand eight hundred and seventy eight pound four shilling sterling the account of what was imported under register he assures us is exact he gives us the detail of one 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 to for the quantity of each metal which he supposes may have been smuggled the great experience of this judicious merchant renders his opinion of considerable weight according to the eloquent and sometimes well-informed author of the philosophical and political history of the establishment of the europeans in the two indies the annual importation of registered gold and silver into spain at an average of 11 years namely from 1754 to 1764 both inclusive amounted to thirteen million nine hundred and eighty four thousand one hundred and eighty five and three fifths piastres of ten realls on account of what may have been smuggled however the whole annual importation he supposes may have amounted to seventeen millions of piastries which at four shillings six pence the piastry is equal to three million eight hundred and twenty five thousand pounds sterling he gives the detail to 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 to 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 18 millions of crusados or 45 millions of french levers equal to about 20 million sterling on account of what may have been smuggled however we may safely he says add to this sum an eighth more or two hundred and fifty thousand pound sterling so that the whole will amount to two million two hundred and fifty thousand pound sterling according to this account therefore the whole annual importation of the precious metals into both spain and portugal mounts to about six million seventy five thousand pound 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 million sterling sometimes a little more sometimes a little less the annual importation of the precious metals into cadiz and lisbon indeed is not equal to the whole annual produce of the minds of america some part is sent annually by the acapulco ships to manila 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 minds 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 50 000 pounds a year is equal to the 120th 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 short of this demand as somewhat to raise the price of those metals in the european market the quantity of brass and iron annually brought from the mind 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 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 to to be lost wasted and consumed in a great variety of 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 course ones the durability 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 mind 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 cornfields those variations have not the same effect upon the price of the one species of commodities as upon that of the other end of book one chapter 11 part 4