Chapter Of the variations in the Proportion between the respective

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

  The 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.

  _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 twenty shillings
  of our present money. From this price it seems to have fallen gradually to
  two ounces of silver, equal to about ten shillings of our present money,
  the price at which we find it estimated in the beginning of the sixteenth
  century, and at which it seems to have continued to be estimated till
  about 1570.

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

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

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

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

  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. In one of them it is
  computed at six shilling and eightpence the quarter, in the other at five
  shillings and eightpence only. In 1512, six shillings and eightpence
  contained only two ounces of silver, Tower weight, and were equal to about
  ten shillings of our present money.

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

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

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

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

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

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

  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 the public fiars put an end to it.
  These are annual valuations, according to the judgment of an assize, of
  the average price of all the different sorts of grain, and of all the
  different qualities of each, according to the actual market price in every
  different county. This institution rendered it sufficiently safe for the
  tenant, and much more convenient for the landlord, to convert, as they
  call it, the corn rent, rather at what should happen to be the price of
  the fiars of each year, than at any certain fixed price. But the writers
  who have collected the prices of corn in ancient times seem frequently to
  have mistaken what is called in Scotland the conversion price for the
  actual market price. Fleetwood acknowledges, upon one occasion, that he
  had made this mistake. As he wrote his book, however, for a particular
  purpose, he does not think proper to make this acknowledgment till after
  transcribing this conversion price fifteen times. The price is eight
  shillings the quarter of wheat. This sum in 1423, the year at which he
  begins with it, contained the same quantity of silver as sixteen shillings
  of our present money. But in 1562, the year at which he ends with it, it
  contained no more than the same nominal sum does at present.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  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 labour to bring silver to
  the great town than to the remote parts of the country; but it costs a
  great deal more to bring corn.

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

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

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

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

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

  From 1595 to 1620, both inclusive, the average price of the quarter of
  nine bushels of the best wheat, at Windsor market, appears, from the
  accounts of Eton college, to have been £ 2:1:6 ⁹⁄₁₃. From which sum,
  neglecting the fraction, and deducting a

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