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improve, by practice, the method of reasoning' on thefa subjects, which of all others are the moft important; though they are commonly treated in the loosest and most careless manner.

Another reason of this popular mistake with regard to the cause of low interest, seems to be the instance of fome nations; where, after a sudden acquisition of money, or of the precious metals, by means of foreign conqueft, the interest has fallen, not only among them, but in all the neighbouring states, as soon as that money was dispersed, and had infinuated itself into every corner. Thus, interest in Spain fell near a half immediately after the discovery of the West Indies, as we are informed by GARCIL ASSO DE LA VEGA: And it has been ever since gradually sinking in every kingdom of EUROPE. Interest in Rome, after the conquest of EGYPT, fell from 6 to 4 per cent, as we learn from Dion t.

The causes of the finking of interest, upon such an event, seem different in the conquering country and in the neighbouring states; but in neither of them can we justly ascribe that effect merely to the encrease of gold and filver. · In the conquering country, it is natural to imagine, that this new acquisition of money will fall into a few hands, and be gathered into large sums, which seek a secure revenue, either by the purchase of land or by intereft; and consequently the same effect follows, for a little time, as if there had been a great accession of industry and commerce. The encrease of lenders above the borrowers sinks the intereft, and so much the faster, if those, who have acquired thofe large fums, find no industry or commerce in the state, and no method of employing their money but by lending it at interest. But

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after this new mass of gold and silver has been digested, and has circulated through the whole state, affairs will foon return to their former situation; while the landlords and new money-holders, living idly, squander above their income; and the former daily contract debt, and the latter encroach on their stock till its final extinction. The whole money may still be in the state, and make itself felt by the encrease of prices : But not being now collected into any large masses or stocks, the disproportion between the borrowers and lenders is the same as formerly, and consequently the high interest returns.

Accordingly we find, in Rome, that, so early as TIBERIUS's time, interest had again mounted to 6 per cent. * though no accident had happened to drain the empire of money. In Trajan's time, money lent on mortgages in ITALY, bore 6 per cent. t; on common securities in BITHYNIA, 12 I. And if interest in SPAIN has not risen to its old pitch; this can be ascribed to nothing but the continuance of the same cause that sunk it, to wit, the large fortunes continually made in the INDIES, which come over to Spain from time to time, and supply the demand of the borrowers. By this accidental and extraneous cause, more money is to be lent in SPAIN, that is, more money is collected into large sums than would otherwise be found in a state, where there are so little commerce and industry.

As to the reduction of interest, which has followed in ENGLAND, FRANCE, and other kingdoms of EUROPE, that have no mines, it has been gradual; and has not proceeded from the encrease of money, considered merely in itself; but from that of industry, which is the natural

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* COLUMELLA, lib, iii. cap. 3:
+ PLINII epift. lib. vii. ep. 18.
| Id. lib. x. ep. 62.

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effect of the former encrease, in that interval, before it raises the price of labour and provisions. For to return to the foregoing suppofition; if the industry of ENGLAND had risen as much from other causes, and that rise might easily have happened, though the stock of money had remained the fame) must not all the same consequences have followed, which we observe at present ? The same people would, in that case, be found in the kingdom, the fame commodities, the fame industry, manufactures, and commerce; and consequently the same merchants, with the same stocks, that is, with the fame command over labour and commodities, only represented by a smaller number of white or yellow pieces ; which being a circumstance of no moment, would only affect the waggoner, porter, and trunk-maker. Luxury, therefore, manufactures, arts, industry, frugality, flourishing equally as at present, it is evident, that intereft must also have been as low; fince that is the necess sary result of all these circumftances; so far as they determine the profits of commerce, and the proportion between the borrowers and lenders in any state,

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11.

T is very usual, in nations ignorant of the nature of

commerce, to prohibit the exportation of commodities, and to preserve among themselves whatever they think valuable and useful. They do not consider, that, in this prohibition, they act directly contrary to their intention; and that the more is exported of any commodity, the more will be raised at home, of which they themselves will always have the first offer.

It is well known to the learned, that the ancient laws of ATHENS rendered the exportation of figs criminal ; that being supposed a species of fruit fo excellent in ATTICA, that the ATHENIANS deemed it too delicious for the palate of any foreigner. And in this ridiculous prohibition they were so much in earneft, that informers were thence called focophants among them, from two GREEK words, which fignify figs and discoverer ti There are proofs in many old acts of parliament of the fame ignorance in the nature of commerce, particularly in the reign of EDWARD III. And to this day, in FRANCE, the exportation of corn is almost always pros hibited ; in order, as they say; to prevent famines; though it is evident, that nothing contributes mote to

# PLUT. De Curiofitate,

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the frequent famines, which so much distress that fertile country.

The same jealous fear, with regard to money, has also prevailed among several nations, and it required both reason and experience to convince any people, that these prohibitions serve to no other purpose than to raise the exchange against them, and produce a still greater exportation.

These errors, one may fay, are gross and palpable: But there still prevails, even in nations well acquainted with commerce, a strong jealousy with regard to the balance of trade, and a fear, that all their gold and silver may be leaving them. This feems to me, almost in every case, a groundless apprehension, and I should as foon dread, that all our springs and rivers should be exhausted, as that money should abandon a kingdom where there are people and industry. Let us carefully preserve these latter advantages; and we need never be apprehensive of losing the former.

It is easy to observe, that all calculations concerning the balance of trade are founded on very uncertain facts and suppositions. The custom-house books are allowed to be an insufficient ground of reasoning; nor is the rate of exchange much better ; unless we consider it with all nations, and know also the proportions of the several fums remitted ; which one may fafely pronounce impossible. Every man, who has ever reasoned on this subject, has always proved his theory, whatever it was, by facts and calculations, and by an enumeration of all the commodities fent to all foreign kingdoms.

The writings of Mr. Gee struck the nation with an universal panic, when they saw it plainly demonstrated, by a detail of particulars, that the balance was against

them

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