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enters into that exchange.

The tradesmen will not be paid in corn; because they want something more than barely to eat. The farmer goes beyond his own parish for the commodities he purchases, and cannot always carry his commodities to the merchant who supplies him. The landlord lives in the capital, or in a foreign country; and demands his rent in gold and silver, which can eally be transported to him. Great undertakers, and manufacturers, and merchants, arise in every commodity; and these can conveniently deal in nothing but in specie. And consequently, in this fituation of fociety, the coin enters into many more contracts, and by that means is much more employed than in the former.

The necessary effect is, that, provided the money does not encrease in the nation, every thing must become much cheaper in times of industry and refinement, than in rude, uncultivated ages. It is the proportion between the circulating money, and the commodities in the market, which determines the prices. Goods, that are consumed at home, or exchanged with other goods in the neighbourhood, never come to market; they affect not in the least the current specie; with regard to it they are as if totally annihilated, and consequently this method of using them finks the proportion on the side of the commodities, and encreases the prices. But after money enters into all contracts and sales, and is every where the measure of exchange, the same national cash has a much greater task to perform; all commodities are then in the market; the sphere of circulation is enlarged; it is the same cafe as if that individual fum wers o serve a larger kingdom ; and therefore, the proportion being here leffened on the side of the money,

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dually fall.

By the most exact computations, that have been formed all over Europe, after making allowance for the alteration in the numerary value or the denomination, it is found, that the prices of all things have only risen three, or at most, four times, since the discovery of the WEST INDIES. But will any one affert, that there is not much more than four times the coin in EUROPE, that was in the fifteenth century, and the centuries preceding it? The SPANIARDS and PORTUGUESE from their mines, the ENGLISH, FRENCH, and Dutch, by their AFRICAN trade, and by their interlopers in the West Indies, bring home about fix millions a year, of which not above a third part goes to the East INDIES, This sum alone, in ten years, would probably double the ancient fock of money in Europe. And no other fatisfactory reason can be given, why all prices have not risen to a much more exorbitant height, except that which is derived from a change of customs and manners. Besides that more commodities are produced by additional industry, the same commodities come more to market, after men depart from their ancient fimplicity of man

And though this encrease has not been equal to that of money, it has, however, been considerable, and has preserved the proportion between coin and commodities nearer the ancient standard.

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Were the question proposed, Which of these methods of living in the people, the fimple or refined, is the most advantageous to the fiate or public? I should, without much fcruple, prefer the latter, in a view to politics at least; and should produce this as an additional reason for the encouragement of trade and manufactures. 7

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While men live in the ancient simple manner, and fupply all their necefTaries from domestic industry or from the neighbourhood, the sovereign can levy no taxes in money from a considerable part of his subjects; and if he will impose on them any burdens, he must take payment in commodities, with which alone they abound; a method attended with such great and obvious inconveniencies, that they need not here be infifted on. All the money he can pritend to raise, must be froin his principal cities, where alone it circulates; and there, it is evident, cannot afford him so much as the whole state could, did gold and silver circulate through the whole. But besides this obvious diminution of the revenue, there is another cause of the poverty of the public in such a situation. Not only the sovereign receives less money, but the same money goes not so far as in times of industry and general commerce. Every thing is dearer, where the gold and silver are supposed equal; and that because fewer commodities come to market, and the whole coin bears a higher proportion to what is to be purchased by it'; whence alone the prices of every thing are fixed and determined.

Here then we may learn the fallacy of the remark, often to be met with in historians, anj even in common conversation, that any particular state is weak, though fertile, populous, and well cultivated, merely because it wants money. It appears, that the want of money can never injure any state within it clf: For men and commodities are the real strength of any community. It is the simple manner of living which here hurts the public, by confining the gold and silver to few han is, and preventing its universal diffusion and circulation. On the contrary, industry and refinements of all kinds incorporate it with the whole state, however finali its quantity may be: They digelt it into every vcin, fo to VOL.I.

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speak; and make it enter into every transaction and contract. No hand is entirely empty of it. And as the prices of every thing fall by that means, the sovereign has a double advantage : He may draw money by his taxes from every part of the state; and what he receives, goes farther in every purchase and payment.

We may infer, from a comparison of prices, that money is not more plentiful in CHINA, than it was in EUROPE three centuries ago : But what immense power is that empire possessed of, if we may judge by the civil and military list maintained by it? POLYBIUS * tells us, that provisions were so cheap in Italy during his time, that in some places the stated price for a meal at the inns was a fernis a head, little more than a farthing! Yet the ROMAN power had even then subdued the whole known world. About a century before that period, the CARTHACINIAN ambassador said, by way of raillery, that no people lived more fociably amongst themselves than the ROMANS; for that, in every entertainment, which, as foreign ministers, they received, they still observed the fame plate at every table to The absolute quantity of the precious metals is a matter of great indifference. There are only two circumstances of any importance, namely, their gradual encrease, and their thorough concoclion and circulation through the state ; and the influence of both these circuinstances has here been explained.

In the following Essay we shall see an instance of a like fallacy as that above mentioned ; where a collateral effect is taken for a cause, and where a consequence is afcribed to the plenty of money; though it be really owing to a change in the manners and customs of the people.

# Lib. ii. cap. 15.
of Plin. lib. xxxiii. cap. 11.

E S S AY IV.

OF INTEREST

NO OTHING is esteemed a more certain sign of the

flourishing condition of any nation than the lowness of interest : And with reason; though I believe the cause is somewhat different from what is commonly apprehended. Lowness of interest is generally ascribed to plenty of money. But money, however plentiful, has no other effect, if fixed, than to raise the price of labour. Silver is more common than gold; and therefore you

rea ceive a greater quantity of it for the same commodities. But do you pay less interest for it? Interest in BATAVIA and JAMAICA is at 10 per cent. in PORTUGAL at 6; though these places, as we may learn from the prices of every thing, abound more in gold and filver than either LONDON or AMSTERDAM.

Were all the gold in ENGLAND annihilated at once; and one and twenty shillings substituted in the place of every guinea, would money be more plentiful or interest lower? No surely: We thould only use silver inItead of gold. Were gold rendered as common silver, and silver as common as copper;

would

imoney be more plentiful or interest lower? We may affuredly give the same answer. Our shillings would then be yellow, and our halfpence white; and we should have no guineas. No other difference would ever be observed ; no alteration on commerce, manufactures, navigation,

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