of notation, which requires few characters, he should make ufe of the ROMAN, which requires a great many. Nay, the greater quantity of money, like the ROMAN characters, is rather inconvenient, and requires greater trouble both to keep and transport it. But notwithstanding this conclufion, which must be allowed juft, it is certain, that, fince the discovery of the mines in AMERICA, industry has encreafed in all the nations of EUROPE, except in the poffeffors of thofe mines; and this may justly be afcribed, amongst other reafons, to the encrease of gold and filver. Accordingly we find, that, in every kingdom, into which money begins to flow in greater abundance than formerly, every thing takes a new face; labour and induftry gain life; the merchant becomes. more enterprifing, the manufacturer more diligent and fkilful, and even the farmer follows his plough with greater alacrity and attention. This is not eafily to be accounted for, if we confider only the influence which a greater abundance of coin has in the kingdom itself, by heightening the price of commodities, and obliging every one to pay a greater number of thefe little yellow or white pieces for every thing he purchases. And as to foreign trade, it appears, that great plenty of money is rather disadvantageous, by raifing the price of every kind. of labour.

To account, then, for this phenomenon, we must confider, that, though the high price of commodities be a neceffary confequence of the encrease of gold and filver, yet it follows not immediately upon that encrease; but fome time is required before the money circulates through the whole ftate, and makes its effect be felt on all ranks of people. At first, no alteration is perceived; by degrees the price rifes, first of one commodity, then of another; till the whole at laft reaches a juft proportion

with the new quantity of fpecie which is in the kingdom. In my opinion, it is only in this interval or intermediate fituation, between the acquifition of money and rise of prices, that the encreafing quantity of gold and filver is favourable to induftry. When any quantity of money is imported into a naiton, it is not at first dispersed into many hands; but is confined to the coffers of a few perfons, who immediately feek to employ it to advantage. Here are a fet of manufacturers or merchants, we shall fuppofe, who have received returns of gold and filver for goods which they fent to CADIZ. They are thereby enabled to employ more workmen than formerly, who never dream of demanding higher wages, but are glad of employment from fuch good paymafters. If workmen become scarce, the manufacturer gives higher wages, but at first requires an encrease of labour; and this is willingly fubmitted to by the artifan, who can now eat and drink better, to compenfate his additional toil and fatigue. He carries his money to market, where he finds every thing at the fame price as formerly, but returns with greater quantity and' of better kinds, for the ufe of his family. The farmer and gardener, finding, that all their commodities are taken off, apply themfelves with alacrity to the raifing more; and at the fame time can afford to take better and more cloths from their tradesmen, whose price is the fame as formerly, and their industry only whetted by so much new gain. It is easy to trace the money in its progrefs through the whole commonwealth; where we shall find, that it must first quicken the diligence of every individual, before it encrease the price of labour.

And that the fpecie may encrease to a confiderable pitch, before it have this latter effect, appears, amongst

other

other inftances, from the frequent operations of the FRENCH king on the money; where it was always found, that the augmenting of the numerary value did not produce a proportional rife of the prices, at least for fome time. In the last year of Louis XIV. money was raised three-fevenths, but prices augmented only one. Corn in FRANCE is now fold at the fame price, or for the fame number of livres, it was in 1683; though filver was then at 30 livres the mark, and is now at 50*. Not to mention the great addition of gold and filver, which may have come into that kingdom fince the former period..

From the whole of this reafoning we may conclude, that it is of no manner of confequence, with regard to the domeftic happiness of a ftate, whether money be in a greater or lefs quantity. The good policy of the magiftrate confifts only in keeping it, if poffible ftill encreafing; because, by that means, he keeps alive a spirit of industry in the nation, and encreases the stock of labour, in which confifts all real power and riches. A nation, whose money decreafes, is actually, at that time, weaker and more miferable than another nation, which poffeffes no more money, but is on the encreafing hand. This will be easily accounted for, if we confider, that the alterations in the quantity of money, either on one fide or the other, are not immediately attended with proportionable alterations in the price of commodities. There is always an interval before matters be adjusted to their new fituation; and this interval is as pernicious to induftry, when gold and filver are diminishing, as it is advantageous when these metals are encreafing. The workman has not the fame employment from the manu

* See NOTE [Q].

4

facturer

facturer and merchant; though he pays the fame price for every thing in the market. The farmer cannot difpofe of his corn and cattle; though he must pay the fame rent to his landlord. The poverty, and beggary, and sloth, which muft enfue, are easily foreseen.

II. The fecond obfervation which I propofed to make with regard to money, may be explained after the following manner. There are fome kingdoms, and many provinces in EUROPE, (and all of them were once in the fame condition) where money is fo fcarce, that the landlord can get none at all from his tenants; but is obliged to take his rent in kind, and either to confume it himself, or tranfport it to places where he may find a market. In those countries, the prince can levy few or no taxes, but in the fame manner: And as he will receive fmall benefit from impofitions fo paid, it is evident that such a kingdom has little force even at home; and cannot maintain fleets and armies to the fame extent, as if every part of it abounded in gold and filver. There is furely a greater disproportion between the force of GERMANY, at prefent, and what it was three centuries ago, than there is in its induftry, people, and manufactures. The AUSTRIAN dominions in the empire are in general well peopled and well cultivated, and are of great extent; but have not a proportionable weight in the balance of EURope; proceeding, as is commonly fuppofed, from the fcarcity of money. How do all these facts agree with that principle of reason, that the quantity of gold and filver is in itself altogether indifferent? According to that principle, wherever a fovereign has numbers of fubjects, and these

The ITALIANS gave to the Emperor MAXIMILIAN, the nickname of POCCI-DANARI. None of the enterprifes of that prince ever fucceeded for want of money.

have plenty of commodities, he fhould of courfe be great and powerful, and they rich and happy, independent of the greater or lesser abundance of the precious metals. These admit of divifions and fubdivifions to a great extent; and where the pieces might become fo small as to be in danger of being loft, it is eafy to mix the gold or filver with a bafer metal, as is practifed in fome countries of EUROPE; and by that means raife the pieces to a bulk more fenfible and convenient. They ftill serve the fame purposes of exchange, whatever their number may be, or whatever colour they may be fupposed to have.

To thefe difficulties I anfwer, that the effect, here fupposed to flow from fcarcity of money, really arifes from the manners and cuftoms of the people; and that we miftake, as is too ufual, a collateral effect for a caufe. The contradiction is only apparent; but it requires fome thought and reflection to discover the principles, by which we can reconcile reafon to experience.

It seems a maxim almoft felf-evident, that the prices of every thing depend on the proportion between commodities and money, and that any confiderable alteration on either of thefe has the fame effect, either of heightening or lowering the price. Encrease the commodities, they become cheaper; encrease the money, they rise in their value. As, on the other hand, a diminution of the former, and that of the latter, have contrary tendencies.

It is alfo evident, that the prices do not fo much depend on the abfolute quantity of commodities and that of money, which are in a nation, as on that of the commodities, which come or may come to market, and of the money which circulates. If the coin be locked up

in