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boston college library










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Of Systems of Political Economy.


Introduction . i


Of the Principle of the Commercial or Mercantile System . . i


Of Restraints upon the Importation from Foreign Countries of such

Goods as can be produced at Home . . . . .25


Of the extraordinary Restraints upon the Importation of Goods of almost all kinds, from those Countries with which the Balance is supposed to be disadvantageous . . . .46

Part I. Of the Unreasonableness of those Restraints, even

upon the Principles of the Commercial System . . 46

Digression concerning Banks of Deposit, particularly con¬ cerning that of Amsterdam . . . . -53

Part II. Of the Unreasonableness of those extraordinary

Restraints upon other Principles . . . .6 2





Of Drawbacks . . . . . . . . . *73


Of Bounties ....... ... 79

Digression concerning the Corn Trade and Corn Laws . . .99


Of Treaties of Commerce . . . . . . . .122


Of Colonies . . . . . . . . . .134

Part I. Of the Motives for establishing new Colonies . 134

Part II. Causes of the Prosperity of new Colonies . . 144

Part III. Of the Advantages which Europe has derived from the Discovery of America, and from that of a Passage to the East Indies by the Cape of Good Hope 17 1


' Conclusion of the Mercantile System . . . . . .226


Of the Agricultural Systems, or of those Systems of Political Economy which represent the Produce of Land as either the sole or the principal Source of the Revenue and Wealth of every Country . . . . 246




Of the Revenue of the Sovereign or Commonwealth.


Of the Expenses of the Sovereign or Commonwealth

Paet I. Of the Expense of Defence ....

Part II. Of the Expense of Justice . .

Part III. Of the Expense of Public Works and Public Institutions ........

Article I. Of the Public Works and Institutions for facilitating the Commerce of Society. First, For facilitating the general Commerce of the Society. Secondly, For facilitating particular Branches of Commerce ........

Article II. Of the Expense of the Institutions for the Education of Youth ......

Article III. Of the Expense of the Institutions for the Instruction of People of all Ages .

Part IV. Of the Expense of supporting the Dignity of the Sovereign ........

Conclusion of the Chapter ......


Of the Sources of the General or Public Revenue of the Society

Part I. Of the Funds or Sources of Revenue which may peculiarly belong to the Sovereign or Commonwealth .













Part II. Of Taxes




Article I. Taxes upon Rents ; Taxes upon the Rent of Lcind •••••••»

Taxes which are proportioned, not to the Rent, but to the Produce of Land ......

Taxes upon the Rent of Houses . .

Article II. Taxes upon Profit, or upon the Revenue arising from Stock ......

Taxes upon the Profit of particular Employments

Appendix to Articles I and II. Taxes upon the Capital Value of Lands, Houses, and Stock .

Article III. Taxes upon the "Wages of Labour .

Article IV. Taxes which it is intended should fall in¬ differently upon every different .Species of Revenue . Capitation Taxes .......

Taxes upon Consumable Commodities


Of Public Debts . . . .

Index ..........

















POLITICAL ECONOMY, considered as a branch of the science

of a statesman or legislator, proposes two distinct objects :

first, to provide a plentiful revenue or subsistence for the people, or more properly- t,n ona.ble them to provide such a revenue or subsistence for themselves ; and secondly ? to supply the state or commonwealth with a revenue sufficient for the public services.

It proposes to enrich both the people and the sovereign.1

The different progress of opulence in different ages and nations, has given occasion to two different systems of political economy, with regard to enriching the people. The one may be called the system of commerce, the other that of agriculture. I shall en¬ deavour to explain both as fully and distinctly as I can, and shall begin with the system of commerce. It is the modern system, and is best understood in our own country and in our own times.




HAT wealth consists in money, or in gold and silver, is a popular notion which naturally arises from the double function of money, as the instrument of commerce, and as the measure of

1 The meaning which Adam Smith assigned to Political Economy has passed away. The terms are now understood to mean the science which discovers the laws which determine the production, consumption, and distribution of wealth. Unfortunately, nearly all these words are ambiguous. It has been suggested that a better definition is found in the following : The science of those forces which set labour in motion, in so far as that labour is employed on objects which thereby acquire a value in exchange. Adam Smith’s definition is nearly co-


extensive with the modern theory of politics, from the Benthamite point of view, which seeks to establish the greatest possible good for the greatest possible number. Such a theory of political economy tends to make the science co¬ extensive with that of morals, by ac¬ counting for all the causes which affect the well-being of a community, while modern economists limit their inquiries to the causes which increase or waste wealth. The distinction was seen by Aristotle, Nicom. Eth. Book vi. caps. 6-8.


j£& _

Rvalue?} In consequence of its being the instrument of commerce, ^Ivben we have monejr we can more readily obtain whatever else we have occasion for, than by means of any other commodity. The great affair, we always find, is to get money. When that is ob¬ tained, there is no difficulty in making any subsequent purchase. In consequence of its being the measure of value, we estimate that of all other commodities by the quantity of money which they will exchange for. We say of a rich man that he is worth a great deal, and of a poor man that he is worth very little money. A frugal man, or a man eager to be rich, is said to love money; and a care¬ less, a generous, or a profuse man, is said to be indifferent about it. To grow rich is to get money; and wealth and money, in short, are in common language considered as in every respect synonymous.

A rich country, in the same mannar-as ^ rich man, is supposed to be a country abounding in money ; .and to heap up gofcP and silver in any country is supposed to be the readiest way to enrich it. For some time after the discovery of America, the first inquiry of the Spaniards, when they arrived upon any unknown coast, used to be, it there was any gold or silver to'TiFTound- in the neigh- ~ bourhood ? By the information which they received, they judged whether it was worth while to make a settlement there, or if the country was worth the conquering. Plano Carpino,1 a monk sent ambassador from the king of France to one of the sons of the famous Gengis Khan, says that the Tartars used frequently to ask him if there were plenty of sheep and oxen in the kingdom of France? Their inquiry had the same object with that of the Spaniards. They wanted to know if the country was rich enough to be worth the conquering. Amc^ig the Tartars, as among all other nations of shepherds, who are generally ignorant of the use of money, cattle are the instruments of commerce and the measures of value. Wealth, therefore, according to them, consisted in cattle, as according to the Spaniards it consisted in gold and silver. Of the two, the Tartar notion perhaps was nearest to the truth.

Mr. Locke2 remarks a distinction between money and other moveable goods. All other moveable goods, he says, are of so consumable a nature that the wealth which consists in them cannot

1 The story is told by Rubruquis, whose 2 This appears to be a general refer- journey to Tartary is contained in the ence to Locke’s three essays on Money and same volume with that of Carpino. See Interest. I can find no passage in them Voyage de Rubruquis en Tartarie, p. 142. which contains the words of the text.




be much depended on, and a nation which abounds in them one year may, without any exportation, but merely by their own waste and extravagance, be in great want of them the next. Money, on the contrary, is a steady friend, which, though it may travel about from hand to hand, yet if it can be kept from going out of the country, is not very liable to be wasted and consumed. Gold and silver, therefore, are, according to him, the most solid and substantial part of the moveable wealth of a nation, and to multiply those metals ought, he thinks, upon that account, to be the great object of its political economy.

Others admit that if a nation could be separated from all the world, it would be of no consequence how much or how little money circulated in it. The consumable goods which were circu¬ lated by means of this money, would only be exchanged for a greater or a smaller number of pieces ; but the real wealth or poverty of the country, they allow, would depend altogether upon the abundance or scarcity of those consumable goods. But it is otherwise, they think, with countries which have connections with foreign nations, and which are obliged to carry on foreign wars, and to maintain fleets and armies in distant countries. This, they say, cannot be done but by sending abroad money to pay them with ; and a nation cannot send much money abroad, unless it has a good deal at home. Every such nation, therefore, must en¬ deavour in time of peace to accumulate gold and silver, that, when occasion requires, it may have wherewithal to carry on foreign wars.

In consequence of these popular notions, all the different nations

of Europe have studied, though to little purpose, every possible

means of accumulating gold and silver in their respective countries.

Spain and Portugnlj prnpviVfnrs of the principal mines which supply Europe with those metals, have either prohibited their exportation under the severest penalties, or subjected it. to a con¬ siderable duty. The like prohibition seems anciently to have made a part of the policy of most other European nations. It is even to be found, where we should least of all expect to find it, in some old Scotch Acts of Parliament, which forbid under heavy penalties the carrying gold or silver forth of the kingdom. The like policy anciently took place both in France and England.1

1 The officer charged with this duty wns the Earl of Holland, in the reign of was known by the name of the King’s Charles I.

Exchanger, and the last person appointed

B 7,




When those countries became commercial, the merchants found this prohibition, upon many occasions, extremely inconvenient. They could frequently buy more advantageously with gold and silver than with any other commodity, the foreign goods which they wanted, either to import into their own, or to carry to some other foreign country. They remonstrated, therefore, against this prohibition as hurtful to trade.

They represented, first, that the exportation of gold and silver in order to purchase foreign goods, did not always diminish the quantity of those metals in the kingdom. That^ on JTm rnqtmry, jt miglit'-frequcntlv^iiicrease that qnnntitwi because, if the sumption of foreign goods was not thereby increased in the country, 'those goods might hn t,n fnrmgk^knnfrips. and being

there sold for a large profit, might bring back much more treasure than was origin

this operation of foreign trade to the seed-time and harvest of agri¬ culture. fIf we only behold,’ says he, ‘the actions of the husband¬ man in the seed-time, when he casteth away much good corn into the ground, we shall account him rather a madman than a husband¬ man. But when we consider his labours in the harvest, which is the end of his endeavours, we shall find the worth and plentiful increase of his actions.’ 1

They represented, secondly, that this prohibition could not hinder the exportation of gold and silver, which, on account of the small¬ ness of their bulk in proportion to their value, could easily be smuggled abroad. That this exportation could only be prevented bv a prop nr niton f inn lr> what they called the balance of trade. That when the country exported to a greater value than* it imported, a balance became due to it from foreign nations, which wTas necesr sarily paid to it in gold and silver, and thereby increased the quan¬ tity ofjBns^rnotak Tn the kingdom. BhtTrraTlvhen it imported to a greater value than it exported, a contrary balance became due to foreign nations, which was necessarily paid to them in the same manner, and thereby diminished that quantity. That in this case to prohibit the exportation of those metals could not prevent it, but only, by making it mure dangerous, render it more expensive. That the exchange was thereby turned more against the country which owed the balance than it otherwise might have been ; the merchant

1 Treasure by Foreign Trade, p. 50.

ally sent out to pun

^rEWfun compares




who purchased a bill upon the foreign country being obliged to pay the banker who sold it, not only for the natural risk, trouble, and expense of sending the money thither, but for the extraordinary risk arising from the prohibition. But that the more the exchange was against any country, the more the balance of trade became neces¬ sarily against it; the money of that country becoming necessarily of so much less value, in comparison with that of the country to which the balance was due. That if the exchange between England and Holland, for example, was fi ve per cent, against England, it would require a hundred and five ounces of silver in England to purchase a bill for a hundred ounces of silver in Holland : that a hundred and five ounces of silver in England, therefore, would be worth only a hundred ounces of silver in Holland, and would purchase only a proportionable quantity of Dutch goods : but that a hundred ounces of silver in Holland, on the contrary, would be worth a hundred and five ounces in England, and would purchase a proportionable quantity of English goods : that the English goods which were sold to Holland would be sold so much cheaper ; and the Dutch goods which were sold to England, so much dearer, by the difference of the exchange; that the one would draw so much less Dutch money to- England, and the other so much more English money to Holland,

as this difference amounted to : and that the balance of trade, there-


fore, would necessarily be so much more against England, and would require a greater balance of gold and silver to be exported to Holland.

Those arguments were partly solid and partly sophistical. They were solid so far as they asserted that the exportation of gold and silver in trade might frequently be advantageous to the country. They were solid too in asserting that no prohibition could prevent their exportation, when private people found any advantage in exporting them. But they were sophistical in supposing, that either to preserve or to augment the quantity of those metals required more the attention of Government, than to preserve or to augment the quantity of any other useful commodities, which the freedom of trade, without any such attention, never fails to supply in the proper quantity. They were sophistical too, perhaps, in asserting that the high price of exchange necessarily increased what they called the unfavourable balance of trade, or occasioned the exportation of a greater quantity of gold and silver. That




high price, indeed, was extremely disadvantageous to the mer¬ chants who had any money to pay in foreign countries. They paid so much dearer for the bills which their bankers granted them upon those countries. Eut though the risk arising from the prohibition might occasion some extraordinary expense to the bankers, it "would not necessarily carry any more money__ou.t-Qf the country. This expense would generally be all laid out in the country, in smuggling tne money out of it. and could seldom occasion the exportatiohof a single sixportoo beyond the precise sum drawn for. The high price of exchange too would naturally dispose the merchants to endeavour to make their exports nearly balance their imports, in order that they might have this high exchange to pay upon as small a sum as possible. The high price of exchange, besides, must necessarily have operated a$ a tax, in raising ihe price of foreign goods, and thereby diminishing their consumption. It would tend, therefore, not to increase but to diminish what They called the unfavourable balance of trade, and consequently the exportation of gold and silver.

Such as they were, however, those arguments convinced the people to whom they were addressed. They were addressed by merchants to parliaments, and to the councils of princes, to nobles and to country gentlemen ; by those who were supposed to under¬ stand trade, to those who were conscious to themselves that they knew nothing about the matter. That foreign trade enriched the country, experience demonstrated to the nobles and country gentlemen, as wrell as to the merchants ; but how, or in what manner, none of them well knew. The merchants knew perfectly in what manner it enriched themselves. It was their business to know it. But to know in what manner it enriched the country, was no part of their business. This subject never came into their consideration but when they had occasion to apply to their country for some change in the laws relating to foreign trade. It then became necessary to say something about the beneficial effects of foreign trade, and the manner in which those effects were obstructed by the laws as they then stood. To the judges who were to decide the business, it appeared a most satisfactory account of the matter, when they were told that foreign trade brought money into the country, but that the laws in question hindered it from bringing so much as it otherwise would do. Those arguments therefore




produced the wished-for effect. The prohibition of exporting gold and silver was in France and England confined to the coin of those respective countries. The exportation of foreign coin and of bullion was made free. In Holland, and in some other places, this liberty was extended even to the coin of the country. The attention of Government was turned away from guarding against the exportation of gold and silver, to watch over the balance of trade, as the only cause which could occasion any augmentation or diminution of those metals. From one fruitless care it was turned away to another care much more intricate, much more embarrassing, and just equally fruitless. The title of Mun’s book, England’s Treasure in Foreign Trade, became a fundamental maxim in the political economy, not of England only, but of all other com¬ mercial countries. The inland or home trade, the most important of all, the trade in which an equal capital affords the greatest revenue, and creates the greatest employment to the people of the country,1 was considered as subsidiary only to foreign trade. It neither brought money into the country, it was said, nor carried any out of it. The country, therefore, could never become either richer or poorer by means of it, except so far as its prosperity or decay might indirectly influence the state of foreign trade.

A country that has no mines of its own must undoubtedly draw its gold and silver from foreign countries, in the same manner as one that has no vineyards of its own must draw its wines. It does not seem necessary, however, that the attention of Govern¬ ment should be more turned towards the one than towards the other object. A country that has wherewithal to buy wine, will always get the wine which it has occasion for ; and a country that has wherewithal to buy gold and silver, will never be in want of those metals. They are to be bought for a certain price like all other commodities, and as they are the price of all other com¬ modities, so all other commodities are the price of those metals. We trust with perfect security that the freedom of trade, without any attention of Government, will always supply us with the wine which we have occasion for ; and we may trust with equal security that it will always supply us with all the gold and silver which

1 This contrast of home and foreign dustry affords the greatest revenue and trade to the advantage of the former is the greatest employment which suits a suggested by the economists from whom community best.

►Smith learnt his principles. That in-




we can afford to purchase or to employ, either in circulating* our commodities, or in other uses.

The quantity of every commodity which human industry can either purchase or produce, naturally regulates itself in every country accord¬ ing to the effectual demand, or according to the demand of those who are willing to pay the whole rent, labour, and profits which must be paid in order to prepare npd bring it, tn market. But no com¬ modities regulate themselves more easily or more exactly according to this effectual demand than gold and silver ; because, on account of the small bulk and great value of those metals, no commodities can be more easily transported from one place to another, from the places where they are cheap to those where they are dear, from the places where they exceed, to those where they fall short of this effectual demand. If there was in England, for example, an effectual demand for an additional quantity of gold, a packet-boat could bring from Lisbon, or from wherever else it was to be had, fifty tons of gold, which could be coined into more than five millions of guineas. But if there was an effectual demand for grain to the same value, to import it would require, at five guineas a ton, a million of tons of shipping, or a thousand ships of a thousand tons each. The navy of England would not be sufficient.1

When the quantity of gold and silver imported into any country exceeds the effectual demand, no vigilance of Government can pre¬ vent their exportation. All the sanguinary laws of Spain and Portugal are not able to keep their gold and silver at home. The continual importations from Peru and Brazil exceed the effectual demand of those countries, and sink the price of those metals there below that in the neighbouring countries. If, on the contrary, in any particular country their quantity fell short of the effectual de¬ mand, so as to raise their price above that of the neighbouring countries, the Government would have no occasion to take any pains to import them. If it was even to take pains to prevent their im¬ portation, it would not be able to effectuate it. Those metals, when the par tans had the wherewithal to purchase them, broke through all the barriers which the laws of Lycurgus opposed to their entrance in Lacedemon. All the sanguinary laws of the customs are not able to prevent the importation of the teas of the Dutch and Gottenburg

1 At present (18S0) the tonnage of the mercantile marine of England is about seven millions.




East India Companies, because somewhat cheaper than those of the British Company. A pound of tea, however, is about a hundred times the bulk of one of the highest prices, sixteen shillings, that is commonly paid for it in silver, and more than two thousand times the bulk of the same price in gold, and consequently just so many times more difficult to smuggle.

It is partly owing to the easy transportation of gold and silver from the places where they abound to those where they are wanted, that the price of those metals does not fluctuate continually like that of the greater part of other commodities, which are hindered by their bulk from shifting their situation, when the market happens to be either over or understocked with them. The price of those metals, indeed, is not altogether exempted from variation, but the changes to which it is liable are generally slow, gradual, and uniform. In Europe, for example, it is supposed, without much foundation, per¬ haps, that, during the course of the present and preceding century, they have been constantly, but gradually, sinking in their value, on account of the continual importations from the Spanish West Indies. But to make any sudden change in the price of gold and silver, so as to raise or lower at once, sensibly and remarkably, the money price of all other commodities, requires such aye volution in commerce as that occasioned by the discovery of America.

If, notwithstanding all this, gold or silver should at any time fall short in a country which has wherewithal to purchase them, there are more expedients for supplying their place than that of almost any other commodity. If the materials of manufacture are wanted, industry must stop. If provisions are wanted, the people must starve. But if money is wanted, barter will supply its place, though with a good deal of inconveniency. Buying and selling upon credit, and the different dealers compensating their credits with one another, once a month or once a year, will supply it with less inconveniency. A well-regulated paper money will supply it, not only without in¬ conveniency, but, in some cases, with some advantages. Upon every account, therefore, the attention of Government never was so un¬ necessarily employed as when directed to watch over the preserva¬ tion or increase of the quantity of money in any country.

No complaint, however, is more common than that of a scarcity of money. Money, like wine, must always be scarce with those who have neither wherewithal to buy it, nor credit to borrow it. Those



book i v.

who have either, will seldom be in want either of the money or of the wine which they have occasion for. This complaint, however, of the -scarcity of money, 'is not always confined to improvident spendthrifts. It is sometimes general through a whole town, and the country in its neighbourhood. Overtrading is the common cause of it. Sober men, whose projects have been disproportioned to their capitals, are as likely to have neither wherewithal to buy money, nor credit to borrow it, as prodigals whose expense has been disproportioned to their revenue. Before their projects can be brought to bear, their stock is gone, and their credit with it. They run about everywhere to borrow money, and everybody tells them that they have none to lend. Even such general complaints of the scarcity of money do not always prove that the usual number of rynlrl n»>r] cilvpr a gyp r^f circulating in the country, but that many people want, those p1'0^00 have nothing to give for them. When the profits of trade happen to be greater than ordinary, over¬ trading becomes a general error both among g'reat and small dealers. They do not always send more money abroad than usual, but they buy upon credit both at home and abroad, an unusual quantity of goods, which they send to some distant market, in hopes that the ' returns will come in before the demand for payment. The demand comes before the returns, and they have nothing at hand with which they can either purchase money, or give solid security for borrowing. It is not any scarcity of gold and silver, but the diffi¬ culty which such people find in borrowing, and which their creditors find in getting payment, that occasions the general complaint of the scarcity of money. 1

It would be too ridiculous to go about seriously to prove that wealth does not consist in money, or in gold and silver, but in what money purchases, and is valuable only for purchasing. Money, no doubt, makes always a part of the national capital; but it has already been shown that it generally makes but a small part, and always the most unprofitable part of it.

It is not because wealth consists more essentially in money than in goods, that the merchant finds it generally more easy to buy goods with money than to buy money with goods ; but because money is the known and established instrument of commerce, for

1 The confusion between private and public losses is a constant source of fallacies in political economy.




which everything is readily given in exchange, but which is not t always with equal readiness to be got in exchange for everything. The greater part of goods besides are more perishable than money, and he may frequently sustain a much greater loss by keeping them. When his goods are upon hand too, he is more liable to such de¬ mands for money as he may not be able to answer, than when he has got their price in his coffers. Over and above all this, his profit arises more directly from selling than from buying, and he is upon all these accounts generally much more anxious to exchange his goods for money than his money for goods. But though a particular merchant, with abundance of goods in his warehouse, may some¬ times be ruined by not being able to sell them in time, a nation or country is not liable to the same accident. The whole capital of a merchant frequently consists in perishable goods destined for purchas¬ ing money. But it is but a very small part of the annual produce of the land and labour of a country which can ever be destined for purchasing gold and silver from their neighbours. The far greater part is circulated and consumed among themselves ; and even of the surplus which is sent abroad, the greater part is generally des¬ tined for the purchase of other foreign goods. Though gold and silver, therefore, could not be had in exchange for the goods destined to purchase them, the nation would not be ruined. It might, indeed, suffer some loss and inconveniency, and be forced upon some of those expedients which are necessary for supplying the place of money. The annual produce of its land and labour, however, would be the same, or very nearly the same, as usual, because the same, or very nearly the same consumable capital would be employed in maintaining it. And though goods do not always draw money so readily as money draws goods, in -the long-run they draw it more necessarily than even it draws them. Goods can serve many other purposes besides purchasing money, but money can serve no other purpose besides purchasing goods. Money, therefore, necessarily runs after goods, but goods do not always or necessarily run after money. The man who buys, does not always mean to sell again, but frequently to use or to consume ; whereas he who sells always means to buy again. The one may frequently have done the whole, but the other can never have done more than the one-lialf of his business. It is not for its own sake that men desire money, but for the sake of what they can purchase with it.




Consumable commodities, it is said, are soon destroyed ; whereas gold and silver are of a more durable nature, and, were it not for this continual exportation, might be accumulated for ages together, to the incredible augmentation of the real wealth of the country. Nothing, therefore, it is pretended, can be more disadvantageous to any country than the trade which consists in the exchange of such lasting for such perishable commodities. We do not, however, reckon that trade disadvantageous which consists in the exchange of the hardware of England for the wines of France ; and yet hardware is a very durable commodity, and wTas it not for this continual exportation, might too be accumulated for ages together, to the incredible augmentation of the pots and pans of the country. But it readily occurs that the number of such utensils is in every country necessarily limited by the use which there is for them ; that it would be absurd to have more pots and pans than were necessary for cooking the victuals usually consumed there ; and that if the quantity of victuals were to increase, the number of pots and pans would readily increase along with it, a part of the increased quantity of victuals being employed in purchasing them, or in maintaining an additional number of workmen whose business it was to make them. It should as readily occur that the quantity of gold and silver is in every country limited by the use which there is for those metals ; that their use consists in circulating commodities as coin, and in affording a species of household furniture as plate ; that the quantity of coin in every country is regulated by the value of the commodities which are to be circu¬ lated by it : increase that value, and immediately a part of it will be sent abroad to purchase, wherever it is to be had, the additional quantity of coin requisite for circulating them : that the quantity of plate is regulated by the number and wealth of those private families who choose to indulge themselves in that sort of magni¬ ficence : increase the number and wealth of such families, and a part of this increased wealth will most probably be employed in purchasing, wherever it is to be found, an additional quantity of plate : that to attempt to increase the wealth of any country, either by introducing or by detaining in it an unnecessary quantity of gold and silver, is as absurd as it would be to attempt to increase the good cheer of private families, by obliging them to keep an un¬ necessary number of kitchen utensils. As the expense of purchas-




ing those unnecessary utensils would diminish instead of increasing either the quantity or goodness of the family provisions, so the expense of purchasing an unnecessary quantity of gold and silver must, in every country, as necessarily diminish the wealth which feeds, clothes, and lodges, which maintains and employs the people. Gold and silver, whether in the shape of coin or of plate, are utensils, it must be remembered, as much as the furniture of the kitchen. Increase the use for them, increase the consumable commodities which are to be circulated, managed, and prepared by means of them, and you will infallibly increase the quantity ; but if you attempt, by extraordinary means, to increase the quantity, you will as infallibly diminish the use and even the quantity too, which in those metals can never be greater than what the use requires. Were they ever to be accumulated beyond this quantity, their transportation is so easy, and the loss which attends their lying idle and unemployed so great, that no law could prevent their being immediately sent out of the country.

It is not always necessary to accumulate gold and silver in order to enable a country to carry on foreign wars, and to maintain fleets and armies in distant countries. Fleets and armies are maintained, not with gold and silver, but with consumable goods. The nation which, from the annual produce of its domestic industry, from the annual revenue arising out of its lands, labour, and consumable stock, has wherewithal to purchase those consumable goods in distant countries, can maintain foreign wars there.

A nation may purchase the pay and provisions of an army in a distant country three different ways : by sending abroad either, first, some part of its accumulated gold and silver; or, secondly, some part of the annual produce of its manufactures ; or, last of all, some part of its annual rude produce.

The gold and silver which can properly be considered as accumu¬ lated or stored up in any country, may be distinguished into three parts : first, the circulating money ; secondly, the plate of private families ; and, last of all, the money which may have been collected by many years’ parsimony, and laid up in the treasury of the prince.

It can seldom happen that such can be spared from the circu¬ lating money of the country ; because in that there can seldom be much redundancy. The value of goods annually bought and sold in any country requires a certain quantity of money to circulate




and distribute them to their proper consumers, and can give employment to no more. The channel of circulation necessarily draws to itself a sum sufficient to fill it, and never admits