Before the discovery of the Spanish West Indies, ten per cent. seems to

have been the common rate of interest through the greater part of Europe.

It has since that time, in different countries, sunk to six, five, four,

and three per cent. Let us suppose, that in every particular country the

value of silver has sunk precisely in the same proportion as the rate of

interest; and that in those countries, for example, where interest has

been reduced from ten to five per cent. the same quantity of silver can

now purchase just half the quantity of goods which it could have purchased

before. This supposition will not, I believe, be found anywhere agreeable

to the truth; but it is the most favourable to the opinion which we are

going to examine; and, even upon this supposition, it is utterly

impossible that the lowering of the value of silver could have the

smallest tendency to lower the rate of interest. If £100 are in those

countries now of no more value than £50 were then, £10 must now be of no

more value than £5 were then. Whatever were the causes which lowered the

value of the capital, the same must necessarily have lowered that of the

interest, and exactly in the same proportion. The proportion between the

value of the capital and that of the interest must have remained the same,

though the rate had never been altered. By altering the rate, on the

contrary, the proportion between those two values is necessarily altered.

If £100 now are worth no more than £50 were then, £5 now can be worth no

more than £2:10s. were then. By reducing the rate of interest, therefore,

from ten to five per cent. we give for the use of a capital, which is

supposed to be equal to one half of its former value, an interest which is

equal to one fourth only of the value of the former interest.

An increase in the quantity of silver, while that of the commodities

circulated by means of it remained the same, could have no other effect

than to diminish the value of that metal. The nominal value of all sorts

of goods would be greater, but their real value would be precisely the

same as before. They would be exchanged for a greater number of pieces of

silver; but the quantity of labour which they could command, the number of

people whom they could maintain and employ, would be precisely the same.

The capital of the country would be the same, though a greater number of

pieces might be requisite for conveying any equal portion of it from one

hand to another. The deeds of assignment, like the conveyances of a

verbose attorney, would be more cumbersome; but the thing assigned would

be precisely the same as before, and could produce only the same effects.

The funds for maintaining productive labour being the same, the demand for

it would be the same. Its price or wages, therefore, though nominally

greater, would really be the same. They would be paid in a greater number

of pieces of silver, but they would purchase only the same quantity of

goods. The profits of stock would be the same, both nominally and really.

The wages of labour are commonly computed by the quantity of silver which

is paid to the labourer. When that is increased, therefore, his wages

appear to be increased, though they may sometimes be no greater than

before. But the profits of stock are not computed by the number of pieces

of silver with which they are paid, but by the proportion which those

pieces bear to the whole capital employed. Thus, in a particular country,

5s. a-week are said to be the common wages of labour, and ten per cent.

the common profits of stock; but the whole capital of the country being

the same as before, the competition between the different capitals of

individuals into which it was divided would likewise be the same. They

would all trade with the same advantages and disadvantages. The common

proportion between capital and profit, therefore, would be the same, and

consequently the common interest of money; what can commonly be given for

the use of money being necessarily regulated by what can commonly be made

by the use of it.

Any increase in the quantity of commodities annually circulated within the

country, while that of the money which circulated them remained the same,

would, on the contrary, produce many other important effects, besides that

of raising the value of the money. The capital of the country, though it

might nominally be the same, would really be augmented. It might continue

to be expressed by the same quantity of money, but it would command a

greater quantity of labour. The quantity of productive labour which it

could maintain and employ would be increased, and consequently the demand

for that labour. Its wages would naturally rise with the demand, and yet

might appear to sink. They might be paid with a smaller quantity of money,

but that smaller quantity might purchase a greater quantity of goods than

a greater had done before. The profits of stock would be diminished, both

really and in appearance. The whole capital of the country being

augmented, the competition between the different capitals of which it was

composed would naturally be augmented along with it. The owners of those

particular capitals would be obliged to content themselves with a smaller

proportion of the produce of that labour which their respective capitals

employed. The interest of money, keeping pace always with the profits of

stock, might, in this manner, be greatly diminished, though the value of

money, or the quantity of goods which any particular sum could purchase,

was greatly augmented.

In some countries the interest of money has been prohibited by law. But as

something can everywhere be made by the use of money, something ought

everywhere to be paid for the use of it. This regulation, instead of

preventing, has been found from experience to increase the evil of usury.

The debtor being obliged to pay, not only for the use of the money, but

for the risk which his creditor runs by accepting a compensation for that

use, he is obliged, if one may say so, to insure his creditor from the

penalties of usury.

In countries where interest is permitted, the law in order to prevent the

extortion of usury, generally fixes the highest rate which can be taken

without incurring a penalty. This rate ought always to be somewhat above

the lowest market price, or the price which is commonly paid for the use

of money by those who can give the most undoubted security. If this legal

rate should be fixed below the lowest market rate, the effects of this

fixation must be nearly the same as those of a total prohibition of

interest. The creditor will not lend his money for less than the use of it

is worth, and the debtor must pay him for the risk which he runs by

accepting the full value of that use. If it is fixed precisely at the

lowest market price, it ruins, with honest people who respect the laws of

their country, the credit of all those who cannot give the very best

security, and obliges them to have recourse to exorbitant usurers. In a

country such as Great Britain, where money is lent to government at three

per cent. and to private people, upon good security, at four and four and

a-half, the present legal rate, five per cent. is perhaps as proper as

any.

The legal rate, it is to be observed, though it ought to be somewhat

above, ought not to be much above the lowest market rate. If the legal

rate of interest in Great Britain, for example, was fixed so high as eight

or ten per cent. the greater part of the money which was to be lent, would

be lent to prodigals and projectors, who alone would be willing to give

this high interest. Sober people, who will give for the use of money no

more than a part of what they are likely to make by the use of it, would

not venture into the competition. A great part of the capital of the

country would thus be kept out of the hands which were most likely to make

a profitable and advantageous use of it, and thrown into those which were

most likely to waste and destroy it. Where the legal rate of interest, on

the contrary, is fixed but a very little above the lowest market rate,

sober people are universally preferred, as borrowers, to prodigals and

projectors. The person who lends money gets nearly as much interest from

the former as he dares to take from the latter, and his money is much

safer in the hands of the one set of people than in those of the other. A

great part of the capital of the country is thus thrown into the hands in

which it is most likely to be employed with advantage.

No law can reduce the common rate of interest below the lowest ordinary

market rate at the time when that law is made. Notwithstanding the edict

of 1766, by which the French king attempted to reduce the rate of interest

from five to four per cent. money continued to be lent in France at five

per cent. the law being evaded in several different ways.

The ordinary market price of land, it is to be observed, depends

everywhere upon the ordinary market rate of interest. The person who has a

capital from which he wishes to derive a revenue, without taking the

trouble to employ it himself, deliberates whether he should buy land with

it, or lend it out at interest. The superior security of land, together

with some other advantages which almost everywhere attend upon this

species of property, will generally dispose him to content himself with a

smaller revenue from land, than what he might have by lending out his

money at interest. These advantages are sufficient to compensate a certain

difference of revenue; but they will compensate a certain difference only;

and if the rent of land should fall short of the interest of money by a

greater difference, nobody would buy land, which would soon reduce its

ordinary price. On the contrary, if the advantages should much more than

compensate the difference, everybody would buy land, which again would

soon raise its ordinary price. When interest was at ten per cent. land was

commonly sold for ten or twelve years purchase. As interest sunk to six,

five, and four per cent. the price of land rose to twenty,

five-and-twenty, and thirty years purchase. The market rate of interest is

higher in France than in England, and the common price of land is lower.

In England it commonly sells at thirty, in France at twenty years

purchase.

CHAPTER V.

OF THE DIFFERENT EMPLOYMENTS OF CAPITALS.

Though all capitals are destined for the maintenance of productive labour

only, yet the quantity of that labour which equal capitals are capable of

putting into motion, varies extremely according to the diversity of their

employment; as does likewise the value which that employment adds to the

annual produce of the land and labour of the country.

A capital may be employed in four different ways; either, first, in

procuring the rude produce annually required for the use and consumption

of the society; or, secondly, in manufacturing and preparing that rude

produce for immediate use and consumption; or, thirdly in transporting

either the rude or manufactured produce from the places where they abound

to those where they are wanted; or, lastly, in dividing particular

portions of either into such small parcels as suit the occasional demands

of those who want them. In the first way are employed the capitals of all

those who undertake improvement or cultivation of lands, mines, or

fisheries; in the second, those of all master manufacturers; in the third,

those of all wholesale merchants; and in the fourth, those of all

retailers. It is difficult to conceive that a capital should be employed

in any way which may not be classed under some one or other of those four.

Each of those four methods of employing a capital is essentially

necessary, either to the existence or extension of the other three, or to

the general conveniency of the society.

Unless a capital was employed in furnishing rude produce to a certain

degree of abundance, neither manufactures nor trade of any kind could

exist.

Unless a capital was employed in manufacturing that part of the rude

produce which requires a good deal of preparation before it can be fit for

use and consumption, it either would never be produced, because there

could be no demand for it; or if it was produced spontaneously, it would

be of no value in exchange, and could add nothing to the wealth of the

society.

Unless a capital was employed in transporting either the rude or

manufactured produce from the places where it abounds to those where it is

wanted, no more of either could be produced than was necessary for the

consumption of the neighbourhood. The capital of the merchant exchanges

the surplus produce of one place for that of another, and thus encourages

the industry, and increases the enjoyments of both.

Unless a capital was employed in breaking and dividing certain portions

either of the rude or manufactured produce into such small parcels as suit

the occasional demands of those who want them, every man would be obliged

to purchase a greater quantity of the goods he wanted than his immediate

occasions required. If there was no such trade as a butcher, for example,

every man would be obliged to purchase a whole ox or a whole sheep at a

time. This would generally be inconvenient to the rich, and much more so

to the poor. If a poor workman was obliged to purchase a month’s or six

months’ provisions at a time, a great part of the stock which he employs

as a capital in the instruments of his trade, or in the furniture of his

shop, and which yields him a revenue, he would be forced to place in that

part of his stock which is reserved for immediate consumption, and which

yields him no revenue. Nothing can be more convenient for such a person

than to be able to purchase his subsistence from day to day, or even from

hour to hour, as he wants it. He is thereby enabled to employ almost his

whole stock as a capital. He is thus enabled to furnish work to a greater

value; and the profit which he makes by it in this way much more than

compensates the additional price which the profit of the retailer imposes

upon the goods. The prejudices of some political writers against

shopkeepers and tradesmen are altogether without foundation. So far is it

from being necessary either to tax them, or to restrict their numbers,

that they can never be multiplied so as to hurt the public, though they

may so as to hurt one another. The quantity of grocery goods, for example,

which can be sold in a particular town, is limited by the demand of that

town and its neighbourhood. The capital, therefore, which can be employed

in the grocery trade, cannot exceed what is sufficient to purchase that

quantity. If this capital is divided between two different grocers, their

competition will tend to make both of them sell cheaper than if it were in

the hands of one only; and if it were divided among twenty, their

competition would be just so much the greater, and the chance of their

combining together, in order to raise the price, just so much the less.

Their competition might, perhaps, ruin some of themselves; but to take

care of this, is the business of the parties concerned, and it may safely

be trusted to their discretion. It can never hurt either the consumer or

the producer; on the contrary, it must tend to make the retailers both

sell cheaper and buy dearer, than if the whole trade was monopolised by

one or two persons. Some of them, perhaps, may sometimes decoy a weak

customer to buy what he has no occasion for. This evil, however, is of too

little importance to deserve the public attention, nor would it

necessarily be prevented by restricting their numbers. It is not the

multitude of alehouses, to give the must suspicious example, that

occasions a general disposition to drunkenness among the common people;

but that disposition, arising from other causes, necessarily gives

employment to a multitude of alehouses.

The persons whose capitals are employed in any of those four ways, are

themselves productive labourers. Their labour, when properly directed,

fixes and realizes itself in the subject or vendible commodity upon which

it is bestowed, and generally adds to its price the value at least of

their own maintenance and consumption. The profits of the farmer, of the

manufacturer, of the merchant, and retailer, are all drawn from the price

of the goods which the two first produce, and the two last buy and sell.

Equal capitals, however, employed in each of those four different ways,

will immediately put into motion very different quantities of productive

labour; and augment, too, in very different proportions, the value of the

annual produce of the land and labour of the society to which they belong.

The capital of the retailer replaces, together with its profits, that of

the merchant of whom he purchases goods, and thereby enables him to

continue his business. The retailer himself is the only productive

labourer whom it immediately employs. In his profit consists the whole

value which its employment adds to the annual produce of the land and

labour of the society.

The capital of the wholesale merchant replaces, together with their

profits, the capitals of the farmers and manufacturers of whom he

purchases the rude and manufactured produce which he deals in, and thereby

enables them to continue their respective trades. It is by this service

chiefly that he contributes indirectly to support the productive labour of

the society, and to increase the value of its annual produce. His capital

employs, too, the sailors and carriers who transport his goods from one

place to another; and it augments the price of those goods by the value,

not only of his profits, but of their wages. This is all the productive

labour which it immediately puts into motion, and all the value which it

immediately adds to the annual produce. Its operation in both these

respects is a good deal superior to that of the capital of the retailer.

Part of the capital of the master manufacturer is employed as a fixed

capital in the instruments of his trade, and replaces, together with its

profits, that of some other artificer of whom he purchases them. Part of

his circulating capital is employed in purchasing materials, and replaces,

with their profits, the capitals of the farmers and miners of whom he

purchases them. But a great part of it is always, either annually, or in a

much shorter period, distributed among the different workmen whom he

employs. It augments the value of those materials by their wages, and by

their masters’ profits upon the whole stock of wages, materials, and

instruments of trade employed in the business. It puts immediately into

motion, therefore, a much greater quantity of productive labour, and adds

a much greater value to the annual produce of the land and labour of the

society, than an equal capital in the hands of any wholesale merchant.

No equal capital puts into motion a greater quantity of productive labour

than that of the farmer. Not only his labouring servants, but his

labouring cattle, are productive labourers. In agriculture, too, Nature

labours along with man; and though her labour costs no expense, its

produce has its value, as well as that of the most expensive workmen. The

most important operations of agriculture seem intended, not so much to

increase, though they do that too, as to direct the fertility of Nature

towards the production of the plants most profitable to man. A field

overgrown with briars and brambles, may frequently produce as great a

quantity of vegetables as the best cultivated vineyard or corn field.

Planting and tillage frequently regulate more than they animate the active

fertility of Nature; and after all their labour, a great part of the work

always remains to be done by her. The labourers and labouring cattle,

therefore, employed in agriculture, not only occasion, like the workmen in

manufactures, the reproduction of a value equal to their own consumption,

or to the capital which employs them, together with its owner’s profits,

but of a much greater value. Over and above the capital of the farmer, and

all its profits, they regularly occasion the reproduction of the rent of

the landlord. This rent may be considered as the produce of those powers

of Nature, the use of which the landlord lends to the farmer. It is

greater or smaller, according to the supposed extent of those powers, or,

in other words, according to the supposed natural or improved fertility of

the land. It is the work of Nature which remains, after deducting or

compensating every thing which can be regarded as the work of man. It is

seldom less than a fourth, and frequently more than a third, of the whole

produce. No equal quantity of productive labour employed in manufactures,

can ever occasion so great reproduction. In them Nature does nothing; man

does all; and the reproduction must always be in proportion to the

strength of the agents that occasion it. The capital employed in

agriculture, therefore, not only puts into motion a greater quantity of

productive labour than any equal capital employed in manufactures; but in

proportion, too, to the quantity of productive labour which it employs, it

adds a much greater value to the annual produce of the land and labour of

the country, to the real wealth and revenue of its inhabitants. Of all the

ways in which a capital can be employed, it is by far the most

advantageous to society.

The capitals employed in the agriculture and in the retail trade of any

society, must always reside within that society. Their employment is

confined almost to a precise spot, to the farm, and to the shop of the

retailer. They must generally, too, though there are some exceptions to

this, belong to resident members of the society.

The capital of a wholesale merchant, on the contrary, seems to have no

fixed or necessary residence anywhere, but may wander about from place to

place, according as it can either buy cheap or sell dear.

The capital of the manufacturer must, no doubt, reside where the

manufacture is carried on; but where this shall be, is not always

necessarily determined. It may frequently be at a great distance, both

from the place where the materials grow, and from that where the complete

manufacture is consumed. Lyons is very distant, both from the places which

afford the materials of its manufactures, and from those which consume

them. The people of fashion in Sicily are clothed in silks made in other

countries, from the materials which their own produces. Part of the wool

of Spain is manufactured in Great Britain, and some part of that cloth is

afterwards sent back to Spain.

Whether the merchant whose capital exports the surplus produce of any

society, be a native or a foreigner, is of very little importance. If he

is a foreigner, the number of their productive labourers is necessarily

less than if he had been a native, by one man only; and the value of their

annual produce, by the profits of that one man. The sailors or carriers

whom he employs, may still belong indifferently either to his country, or

to their country, or to some third country, in the same manner as if he

had been a native. The capital of a foreigner gives a value to their

surplus produce equally with that of a native, by exchanging it for

something for which there is a demand at home. It as effectually replaces

the capital of the person who produces that surplus, and as effectually

enables him to continue his business, the service by which the capital of

a wholesale merchant chiefly contributes to support the productive labour,

and to augment the value of the annual produce of the society to which he

belongs.

It is of more consequence that the capital of the manufacturer should

reside within the country. It necessarily puts into motion a greater

quantity of productive labour, and adds a greater value to the annual

produce of the land and labour of the society. It may, however, be very

useful to the country, though it should not reside within it. The capitals

of the British manufacturers who work up the flax and hemp annually

imported from the coasts of the Baltic, are surely very useful to the

countries which produce them. Those materials are a part of the surplus

produce of those countries, which, unless it was annually exchanged for

something which is in demand there, would be of no value, and would soon

cease to be produced. The merchants who export it, replace the capitals of

the people who produce it, and thereby encourage them to continue the

production; and the British manufacturers replace the capitals of those

merchants.

A particular country, in the same manner as a particular person, may

frequently not have capital sufficient both to improve and cultivate all

its lands, to manufacture and prepare their whole rude produce for

immediate use and consumption, and to transport the surplus part either of

the rude or manufactured produce to those distant markets, where it can be

exchanged for something for which there is a demand at home. The

inhabitants of many different parts of Great Britain have not capital

sufficient to improve and cultivate all their lands. The wool of the

southern counties of Scotland is, a great part of it, after a long land

carriage through very bad roads, manufactured in Yorkshire, for want of a

capital to manufacture it at home. There are many little manufacturing

towns in Great Britain, of which the inhabitants have not capital

sufficient to transport the produce of their own industry to those distant

markets where there is demand and consumption for it. If there are any

merchants among them, they are, properly, only the agents of wealthier

merchants who reside in some of the great commercial cities.

When the capital of any country is not sufficient for all those three

purposes, in proportion as a greater share of it is employed in

agriculture, the greater will be the quantity of productive labour which

it puts into motion within the country; as will likewise be the value

which its employment adds to the annual produce of the land and labour of

the society. After agriculture, the capital employed in manufactures puts

into motion the greatest quantity of productive labour, and adds the

greatest value to the annual produce. That which is employed in the trade

of exportation has the least effect of any of the three.

The country, indeed, which has not capital sufficient for all those three

purposes, has not arrived at that degree of opulence for which it seems

naturally destined. To attempt, however, prematurely, and with an

insufficient capital, to do all the three, is certainly not the shortest

way for a society, no more than it would be for an individual, to acquire

a sufficient one. The capital of all the individuals of a nation has its

limits, in the same manner as that of a single individual, and is capable

of executing only certain purposes. The capital of all the individuals of

a nation is increased in the same manner as that of a single individual,

by their continually accumulating and adding to it whatever they save out

of their revenue. It is likely to increase the fastest, therefore, when it

is employed in the way that affords the greatest revenue to all the

inhabitants or the country, as they will thus be enabled to make the

greatest savings. But the revenue of all the inhabitants of the country is

necessarily in proportion to the value of the annual produce of their land

and labour.

It has been the principal cause of the rapid progress of our American

colonies towards wealth and greatness, that almost their whole capitals

have hitherto been employed in agriculture. They have no manufactures,

those household and coarser manufactures excepted, which necessarily

accompany the progress of agriculture, and which are the work of the women

and children in every private family. The greater part, both of the

exportation and coasting trade of America, is carried on by the capitals

of merchants who reside in Great Britain. Even the stores and warehouses

from which goods are retailed in some provinces, particularly in Virginia

and Maryland, belong many of them to merchants who reside in the mother

country, and afford one of the few instances of the retail trade of a

society being carried on by the capitals of those who are not resident

members of it. Were the Americans, either by combination, or by any other

sort of violence, to stop the importation of European manufactures, and,

by thus giving a monopoly to such of their own countrymen as could

manufacture the like goods, divert any considerable part of their capital

into this employment, they would retard, instead of accelerating, the

further increase in the value of their annual produce, and would obstruct,

instead of promoting, the progress of their country towards real wealth

and greatness. This would be still more the case, were they to attempt, in

the same manner, to monopolize to themselves their whole exportation

trade.

The course of human prosperity, indeed, seems scarce ever to have been of

so long continuance as to enable any great country to acquire capital

sufficient for all those three purposes; unless, perhaps, we give credit

to the wonderful accounts of the wealth and cultivation of China, of those

of ancient Egypt, and of the ancient state of Indostan. Even those three

countries, the wealthiest, according to all accounts, that ever were in

the world, are chiefly renowned for their superiority in agriculture and

manufactures. They do not appear to have been eminent for foreign trade.

The ancient Egyptians had a superstitious antipathy to the sea; a

superstition nearly of the same kind prevails among the Indians; and the

Chinese have never excelled in foreign commerce. The greater part of the

surplus produce of all those three countries seems to have been always

exported by foreigners, who gave in exchange for it something else, for

which they found a demand there, frequently gold and silver.

It is thus that the same capital will in any country put into motion a

greater or smaller quantity of productive labour, and add a greater or

smaller value to the annual produce of its land and labour, according to

the different proportions in which it is employed in agriculture,

manufactures, and wholesale trade. The difference, too, is very great,

according to the different sorts of wholesale trade in which any part of

it is employed.

All wholesale trade, all buying in order to sell again by wholesale, maybe

reduced to three different sorts: the home trade, the foreign trade of

consumption, and the carrying trade. The home trade is employed in

purchasing in one part of the same country, and selling in another, the

produce of the industry of that country. It comprehends both the inland

and the coasting trade. The foreign trade of consumption is employed in

purchasing foreign goods for home consumption. The carrying trade is

employed in transacting the commerce of foreign countries, or in carrying

the surplus produce of one to another.

The capital which is employed in purchasing in one part of the country, in

order to sell in another, the produce of the industry of that country,

generally replaces, by every such operation, two distinct capitals, that

had both been employed in the agriculture or manufactures of that country,

and thereby enables them to continue that employment. When it sends out

from the residence of the merchant a certain value of commodities, it

generally brings back in return at least an equal value of other

commodities. When both are the produce of domestic industry, it

necessarily replaces, by every such operation, two distinct capitals,

which had both been employed in supporting productive labour, and thereby

enables them to continue that support. The capital which sends Scotch

manufactures to London, and brings back English corn and manufactures to

Edinburgh, necessarily replaces, by every such operation, two British

capitals, which had both been employed in the agriculture or manufactures

of Great Britain.

The capital employed in purchasing foreign goods for home consumption,

when this purchase is made with the produce of domestic industry,

replaces, too, by every such operation, two distinct capitals; but one of

them only is employed in supporting domestic industry. The capital which

sends British goods to Portugal, and brings back Portuguese goods to Great

Britain, replaces, by every such operation, only one British capital. The

other is a Portuguese one. Though the returns, therefore, of the foreign

trade of consumption, should be as quick as those of the home trade, the

capital employed in it will give but one half of the encouragement to the

industry or productive labour of the country.

But the returns of the foreign trade of consumption are very seldom so

quick as those of the home trade. The returns of the home trade generally

come in before the end of the year, and sometimes three or four times in

the year. The returns of the foreign trade of consumption seldom come in

before the end of the year, and sometimes not till after two or three

years. A capital, therefore, employed in the home trade, will sometimes

make twelve operations, or be sent out and returned twelve times, before a

capital employed in the foreign trade of consumption has made one. If the

capitals are equal, therefore, the one will give four-and-twenty times

more encouragement and support to the industry of the country than the

other.

The foreign goods for home consumption may sometimes be purchased, not

with the produce of domestic industry but with some other foreign goods.

These last, however, must have been purchased, either immediately with the

produce of domestic industry, or with something else that had been

purchased with it; for, the case of war and conquest excepted, foreign

goods can never be acquired, but in exchange for something that had been

produced at home, either immediately, or after two or more different

exchanges. The effects, therefore, of a capital employed in such a

round-about foreign trade of consumption, are, in every respect, the same

as those of one employed in the most direct trade of the same kind, except

that the final returns are likely to be still more distant, as they must

depend upon the returns of two or three distinct foreign trades. If the

hemp and flax of Riga are purchased with the tobacco of Virginia, which

had been purchased with British manufactures, the merchant must wait for

the returns of two distinct foreign trades, before he can employ the same

capital in repurchasing a like quantity of British manufactures. If the

tobacco of Virginia had been purchased, not with British manufactures, but

with the sugar and rum of Jamaica, which had been purchased with those

manufactures, he must wait for the returns of three. If those two or three

distinct foreign trades should happen to be carried on by two or three

distinct merchants, of whom the second buys the goods imported by the

first, and the third buys those imported by the second, in order to export

them again, each merchant, indeed, will, in this case, receive the returns

of his own capital more quickly; but the final returns of the whole

capital employed in the trade will be just as slow as ever. Whether the

whole capital employed in such a round about trade belong to one merchant

or to three, can make no difference with regard to the country, though it

may with regard to the particular merchants. Three times a greater capital

must in both cases be employed, in order to exchange a certain value of

British manufactures for a certain quantity of flax and hemp, than would

have been necessary, had the manufactures and the flax and hemp been

directly exchanged for one another. The whole capital employed, therefore,

in such a round-about foreign trade of consumption, will generally give

less encouragement and support to the productive labour of the country,

than an equal capital employed in a more direct trade of the same kind.

Whatever be the foreign commodity with which the foreign goods for home

consumption are purchased, it can occasion no essential difference, either

in the nature of the trade, or in the encouragement and support which it

can give to the productive labour of the country from which it is carried

on. If they are purchased with the gold of Brazil, for example, or with

the silver of Peru, this gold and silver, like the tobacco of Virginia,

must have been purchased with something that either was the produce of the

industry of the country, or that had been purchased with something else

that was so. So far, therefore, as the productive labour of the country is

concerned, the foreign trade of consumption, which is carried on by means

of gold and silver, has all the advantages and all the inconveniencies of

any other equally round-about foreign trade of consumption; and will

replace, just as fast, or just as slow, the capital which is immediately

employed in supporting that productive labour. It seems even to have one

advantage over any other equally round-about foreign trade. The

transportation of those metals from one place to another, on account of

their small bulk and great value, is less expensive than that of almost

any other foreign goods of equal value. Their freight is much less, and

their insurance not greater; and no goods, besides, are less liable to

suffer by the carriage. An equal quantity of foreign goods, therefore, may

frequently be purchased with a smaller quantity of the produce of domestic

industry, by the intervention of gold and silver, than by that of any

other foreign goods. The demand of the country may frequently, in this

manner, be supplied more completely, and at a smaller expense, than in any

other. Whether, by the continual exportation of those metals, a trade of

this kind is likely to impoverish the country from which it is carried on

in any other way, I shall have occasion to examine at great length

hereafter.

That part of the capital of any country which is employed in the carrying

trade, is altogether withdrawn from supporting the productive labour of

that particular country, to support that of some foreign countries. Though

it may replace, by every operation, two distinct capitals, yet neither of

them belongs to that particular country. The capital of the Dutch

merchant, which carries the corn of Poland to Portugal, and brings back

the fruits and wines of Portugal to Poland, replaces by every such

operation two capitals, neither of which had been employed in supporting

the productive labour of Holland; but one of them in supporting that of

Poland, and the other that of Portugal. The profits only return regularly

to Holland, and constitute the whole addition which this trade necessarily

makes to the annual produce of the land and labour of that country. When,

indeed, the carrying trade of any particular country is carried on with

the ships and sailors of that country, that part of the capital employed

in it which pays the freight is distributed among, and puts into motion, a

certain number of productive labourers of that country. Almost all nations

that have had any considerable share of the carrying trade have, in fact,

carried it on in this manner. The trade itself has probably derived its

name from it, the people of such countries being the carriers to other

countries. It does not, however, seem essential to the nature of the trade

that it should be so. A Dutch merchant may, for example, employ his

capital in transacting the commerce of Poland and Portugal, by carrying

part of the surplus produce of the one to the other, not in Dutch, but in

British bottoms. It maybe presumed, that he actually does so upon some

particular occasions. It is upon this account, however, that the carrying

trade has been supposed peculiarly advantageous to such a country as Great

Britain, of which the defence and security depend upon the number of its

sailors and shipping. But the same capital may employ as many sailors and

shipping, either in the foreign trade of consumption, or even in the home

trade, when carried on by coasting vessels, as it could in the carrying

trade. The number of sailors and shipping which any particular capital can

employ, does not depend upon the nature of the trade, but partly upon the

bulk of the goods, in proportion to their value, and partly upon the

distance of the ports between which they are to be carried; chiefly upon

the former of those two circumstances. The coal trade from Newcastle to

London, for example, employs more shipping than all the carrying trade of

England, though the ports are at no great distance. To force, therefore,

by extraordinary encouragements, a larger share of the capital of any

country into the carrying trade, than what would naturally go to it, will

not always necessarily increase the shipping of that country.

The capital, therefore, employed in the home trade of any country, will

generally give encouragement and support to a greater quantity of

productive labour in that country, and increase the value of its annual

produce, more than an equal capital employed in the foreign trade of

consumption; and the capital employed in this latter trade has, in both

these respects, a still greater advantage over an equal capital employed

in the carrying trade. The riches, and so far as power depends upon

riches, the power of every country must always be in proportion to the

value of its annual produce, the fund from which all taxes must ultimately

be paid. But the great object of the political economy of every country,

is to increase the riches and power of that country. It ought, therefore,

to give no preference nor superior encouragement to the foreign trade of

consumption above the home trade, nor to the carrying trade above either

of the other two. It ought neither to force nor to allure into either of

those two channels a greater share of the capital of the country, than

what would naturally flow into them of its own accord.

Each of those different branches of trade, however, is not only

advantageous, but necessary and unavoidable, when the course of things,

without any constraint or violence, naturally introduces it.

When the produce of any particular branch of industry exceeds what the

demand of the country requires, the surplus must be sent abroad, and

exchanged for something for which there is a demand at home. Without such

exportation, a part of the productive labour of the country must cease,

and the value of its annual produce diminish. The land and labour of Great

Britain produce generally more corn, woollens, and hardware, than the

demand of the home market requires. The surplus part of them, therefore,

must be sent abroad, and exchanged for something for which there is a

demand at home. It is only by means of such exportation, that this surplus

can acquire a value sufficient to compensate the labour and expense of

producing it. The neighbourhood of the sea-coast, and the banks of all

navigable rivers, are advantageous situations for industry, only because

they facilitate the exportation and exchange of such surplus produce for

something else which is more in demand there.

When the foreign goods which are thus purchased with the surplus produce

of domestic industry exceed the demand of the home market, the surplus

part of them must be sent abroad again, and exchanged for something more

in demand at home. About 96,000 hogsheads of tobacco are annually

purchased in Virginia and Maryland with a part of the surplus produce of

British industry. But the demand of Great Britain does not require,

perhaps, more than 14,000. If the remaining 82,000, therefore, could not

be sent abroad, and exchanged for something more in demand at home, the

importation of them must cease immediately, and with it the productive

labour of all those inhabitants of Great Britain who are at present

employed in preparing the goods with which these 82,000 hogsheads are

annually purchased. Those goods, which are part of the produce of the land

and labour of Great Britain, having no market at home, and being deprived

of that which they had abroad, must cease to be produced. The most

round-about foreign trade of consumption, therefore, may, upon some

occasions, be as necessary for supporting the productive labour of the

country, and the value of its annual produce, as the most direct.

When the capital stock of any country is increased to such a degree that

it cannot be all employed in supplying the consumption, and supporting the

productive labour of that particular country, the surplus part of it

naturally disgorges itself into the carrying trade, and is employed in

performing the same offices to other countries. The carrying trade is the

natural effect and symptom of great national wealth; but it does not seem

to be the natural cause of it. Those statesmen who have been disposed to

favour it with particular encouragement, seem to have mistaken the effect

and symptom for the cause. Holland, in proportion to the extent of the

land and the number of its inhabitants, by far the richest country in

Europe, has accordingly the greatest share of the carrying trade of

Europe. England, perhaps the second richest country of Europe, is likewise

supposed to have a considerable share in it; though what commonly passes

for the carrying trade of England will frequently, perhaps, be found to be

no more than a round-about foreign trade of consumption. Such are, in a

great measure, the trades which carry the goods of the East and West

Indies and of America to the different European markets. Those goods are

generally purchased, either immediately with the produce of British

industry, or with something else which had been purchased with that

produce, and the final returns of those trades are generally used or

consumed in Great Britain. The trade which is carried on in British

bottoms between the different ports of the Mediterranean, and some trade

of the same kind carried on by British merchants between the different

ports of India, make, perhaps, the principal branches of what is properly

the carrying trade of Great Britain.

The extent of the home trade, and of the capital which can be employed in

it, is necessarily limited by the value of the surplus produce of all

those distant places within the country which have occasion to exchange

their respective productions with one another; that of the foreign trade

of consumption, by the value of the surplus produce of the whole country,

and of what can be purchased with it; that of the carrying trade, by the

value of the surplus produce of all the different countries in the world.

Its possible extent, therefore, is in a manner infinite in comparison of

that of the other two, and is capable of absorbing the greatest capitals.

The consideration of his own private profit is the sole motive which

determines the owner of any capital to employ it either in agriculture, in

manufactures, or in some particular branch of the wholesale or retail

trade. The different quantities of productive labour which it may put into

motion, and the different values which it may add to the annual produce of

the land and labour of the society, according as it is employed in one or

other of those different ways, never enter into his thoughts. In

countries, therefore, where agriculture is the most profitable of all

employments, and farming and improving the most direct roads to a splendid

fortune, the capitals of individuals will naturally be employed in the

manner most advantageous to the whole society. The profits of agriculture,

however, seem to have no superiority over those of other employments in

any part of Europe. Projectors, indeed, in every corner of it, have,

within these few years, amused the public with most magnificent accounts

of the profits to be made by the cultivation and improvement of land.

Without entering into any particular discussion of their calculations, a

very simple observation may satisfy us that the result of them must be

false. We see, every day, the most splendid fortunes, that have been

acquired in the course of a single life, by trade and manufactures,

frequently from a very small capital, sometimes from no capital. A single

instance of such a fortune, acquired by agriculture in the same time, and

from such a capital, has not, perhaps, occurred in Europe, during the

course of the present century. In all the great countries of Europe,

however, much good land still remains uncultivated; and the greater part

of what is cultivated, is far from being improved to the degree of which

it is capable. Agriculture, therefore, is almost everywhere capable of

absorbing a much greater capital than has ever yet been employed in it.

What circumstances in the policy of Europe have given the trades which are

carried on in towns so great an advantage over that which is carried on in

the country, that private persons frequently find it more for their

advantage to employ their capitals in the most distant carrying trades of

Asia and America than in the improvement and cultivation of the most

fertile fields in their own neighbourhood, I shall endeavour to explain at

full length in the two following books.

BOOK III.

OF THE DIFFERENT PROGRESS OF OPULENCE IN

DIFFERENT NATIONS

CHAPTER I.

OF THE NATURAL PROGRESS OF OPULENCE.

The great commerce of every civilized society is that carried on between

the inhabitants of the town and those of the country. It consists in the

exchange of rude for manufactured produce, either immediately, or by the

intervention of money, or of some sort of paper which represents money.

The country supplies the town with the means of subsistence and the

materials of manufacture. The town repays this supply, by sending back a

part of the manufactured produce to the inhabitants of the country. The

town, in which there neither is nor can be any reproduction of substances,

may very properly be said to gain its whole wealth and subsistence from

the country. We must not, however, upon this account, imagine that the

gain of the town is the loss of the country. The gains of both are mutual

and reciprocal, and the division of labour is in this, as in all other

cases, advantageous to all the different persons employed in the various

occupations into which it is subdivided. The inhabitants of the country

purchase of the town a greater quantity of manufactured goods with the

produce of a much smaller quantity of their own labour, than they must

have employed had they attempted to prepare them themselves. The town

affords a market for the surplus produce of the country, or what is over

and above the maintenance of the cultivators; and it is there that the

inhabitants of the country exchange it for something else which is in

demand among them. The greater the number and revenue of the inhabitants

of the town, the more extensive is the market which it affords to those of

the country; and the more extensive that market, it is always the more

advantageous to a great number. The corn which grows within a mile of the

town, sells there for the same price with that which comes from twenty

miles distance. But the price of the latter must, generally, not only pay

the expense of raising it and bringing it to market, but afford, too, the

ordinary profits of agriculture to the farmer. The proprietors and

cultivators of the country, therefore, which lies in the neighbourhood of

the town, over and above the ordinary profits of agriculture, gain, in the

price of what they sell, the whole value of the carriage of the like

produce that is brought from more distant parts; and they save, besides,

the whole value of this carriage in the price of what they buy. Compare

the cultivation of the lands in the neighbourhood of any considerable

town, with that of those which lie at some distance from it, and you will

easily satisfy yourself how much the country is benefited by the commerce

of the town. Among all the absurd speculations that have been propagated

concerning the balance of trade, it has never been pretended that either

the country loses by its commerce with the town, or the town by that with

the country which maintains it.

As subsistence is, in the nature of things, prior to conveniency and

luxury, so the industry which procures the former, must necessarily be

prior to that which ministers to the latter. The cultivation and

improvement of the country, therefore, which affords subsistence, must,

necessarily, be prior to the increase of the town, which furnishes only

the means of conveniency and luxury. It is the surplus produce of the

country only, or what is over and above the maintenance of the

cultivators, that constitutes the subsistence of the town, which can

therefore increase only with the increase of the surplus produce. The

town, indeed, may not always derive its whole subsistence from the country

in its neighbourhood, or even from the territory to which it belongs, but

from very distant countries; and this, though it forms no exception from

the general rule, has occasioned considerable variations in the progress

of opulence in different ages and nations.

That order of things which necessity imposes, in general, though not in

every particular country, is in every particular country promoted by the

natural inclinations of man. If human institutions had never thwarted

those natural inclinations, the towns could nowhere have increased beyond

what the improvement and cultivation of the territory in which they were

situated could support; till such time, at least, as the whole of that

territory was completely cultivated and improved. Upon equal, or nearly

equal profits, most men will choose to employ their capitals, rather in

the improvement and cultivation of land, than either in manufactures or in

foreign trade. The man who employs his capital in land, has it more under

his view and command; and his fortune is much less liable to accidents

than that of the trader, who is obliged frequently to commit it, not only

to the winds and the waves, but to the more uncertain elements of human

folly and injustice, by giving great credits, in distant countries, to men

with whose character and situation he can seldom be thoroughly acquainted.

The capital of the landlord, on the contrary, which is fixed in the

improvement of his land, seems to be as well secured as the nature of

human affairs can admit of. The beauty of the country, besides, the

pleasure of a country life, the tranquillity of mind which it promises,

and, wherever the injustice of human laws does not disturb it, the

independency which it really affords, have charms that, more or less,

attract everybody; and as to cultivate the ground was the original

destination of man, so, in every stage of his existence, he seems to

retain a predilection for this primitive employment.

Without the assistance of some artificers, indeed, the cultivation of land

cannot be carried on, but with great inconveniency and continual

interruption. Smiths, carpenters, wheelwrights and ploughwrights, masons

and bricklayers, tanners, shoemakers, and tailors, are people whose

service the farmer has frequent occasion for. Such artificers, too, stand

occasionally in need of the assistance of one another; and as their

residence is not, like that of the farmer, necessarily tied down to a

precise spot, they naturally settle in the neighbourhood of one another,

and thus form a small town or village. The butcher, the brewer, and the

baker, soon join them, together with many other artificers and retailers,

necessary or useful for supplying their occasional wants, and who

contribute still further to augment the town. The inhabitants of the town,

and those of the country, are mutually the servants of one another. The

town is a continual fair or market, to which the inhabitants of the

country resort, in order to exchange their rude for manufactured produce.

It is this commerce which supplies the inhabitants of the town, both with

the materials of their work, and the means of their subsistence. The

quantity of the finished work which they sell to the inhabitants of the

country, necessarily regulates the quantity of the materials and

provisions which they buy. Neither their employment nor subsistence,

therefore, can augment, but in proportion to the augmentation of the

demand from the country for finished work; and this demand can augment

only in proportion to the extension of improvement and cultivation. Had

human institutions, therefore, never disturbed the natural course of

things, the progressive wealth and increase of the towns would, in every

political society, be consequential, and in proportion to the improvement

and cultivation of the territory of country.

In our North American colonies, where uncultivated land is still to be had

upon easy terms, no manufactures for distant sale have ever yet been

established in any of their towns. When an artificer has acquired a little

more stock than is necessary for carrying on his own business in supplying

the neighbouring country, he does not, in North America, attempt to

establish with it a manufacture for more distant sale, but employs it in

the purchase and improvement of uncultivated land. From artificer he

becomes planter; and neither the large wages nor the easy subsistence

which that country affords to artificers, can bribe him rather to work for

other people than for himself. He feels that an artificer is the servant

of his customers, from whom he derives his subsistence; but that a planter

who cultivates his own land, and derives his necessary subsistence from

the labour of his own family, is really a master, and independent of all

the world.

In countries, on the contrary, where there is either no uncultivated land,

or none that can be had upon easy terms, every artificer who has acquired

more stock than he can employ in the occasional jobs of the neighbourhood,

endeavours to prepare work for more distant sale. The smith erects some

sort of iron, the weaver some sort of linen or woollen manufactory. Those

different manufactures come, in process of time, to be gradually

subdivided, and thereby improved and refined in a great variety of ways,

which may easily be conceived, and which it is therefore unnecessary to

explain any farther.

In seeking for employment to a capital, manufactures are, upon equal or

nearly equal profits, naturally preferred to foreign commerce, for the

same reason that agriculture is naturally preferred to manufactures. As

the capital of the landlord or farmer is more secure than that of the

manufacturer, so the capital of the manufacturer, being at all times more

within his view and command, is more secure than that of the foreign

merchant. In every period, indeed, of every society, the surplus part both

of the rude and manufactured produce, or that for which there is no demand

at home, must be sent abroad, in order to be exchanged for something for

which there is some demand at home. But whether the capital which carries

this surplus produce abroad be a foreign or a domestic one, is of very

little importance. If the society has not acquired sufficient capital,

both to cultivate all its lands, and to manufacture in the completest

manner the whole of its rude produce, there is even a considerable

advantage that the rude produce should be exported by a foreign capital,

in order that the whole stock of the society may be employed in more

useful purposes. The wealth of ancient Egypt, that of China and Indostan,

sufficiently demonstrate that a nation may attain a very high degree of

opulence, though the greater part of its exportation trade be carried on

by foreigners. The progress of our North American and West Indian

colonies, would have been much less rapid, had no capital but what

belonged to themselves been employed in exporting their surplus produce.

According to the natural course of things, therefore, the greater part of

the capital of every growing society is, first, directed to agriculture,

afterwards to manufactures, and, last of all, to foreign commerce. This

order of things is so very natural, that in every society that had any

territory, it has always, I believe, been in some degree observed. Some of

their lands must have been cultivated before any considerable towns could

be established, and some sort of coarse industry of the manufacturing kind

must have been carried on in those towns, before they could well think of

employing themselves in foreign commerce.

But though this natural order of things must have taken place in some

degree in every such society, it has, in all the modern states of Europe,

been in many respects entirely inverted. The foreign commerce of some of

their cities has introduced all their finer manufactures, or such as were

fit for distant sale; and manufactures and foreign commerce together have

given birth to the principal improvements of agriculture. The manners and

customs which the nature of their original government introduced, and

which remained after that government was greatly altered, necessarily

forced them into this unnatural and retrograde order.

CHAPTER II.

OF THE DISCOURAGEMENT OF AGRICULTURE

IN THE ANCIENT STATE OF EUROPE, AFTER THE FALL OF THE ROMAN EMPIRE.

When the German and Scythian nations overran the western provinces of the

Roman empire, the confusions which followed so great a revolution lasted

for several centuries. The rapine and violence which the barbarians

exercised against the ancient inhabitants, interrupted the commerce

between the towns and the country. The towns were deserted, and the

country was left uncultivated; and the western provinces of Europe, which

had enjoyed a considerable degree of opulence under the Roman empire, sunk

into the lowest state of poverty and barbarism. During the continuance of

those confusions, the chiefs and principal leaders of those nations

acquired, or usurped to themselves, the greater part of the lands of those

countries. A great part of them was uncultivated; but no part of them,

whether cultivated or uncultivated, was left without a proprietor. All of

them were engrossed, and the greater part by a few great proprietors.

This original engrossing of uncultivated lands, though a great, might have

been but a transitory evil. They might soon have been divided again, and

broke into small parcels, either by succession or by alienation. The law

of primogeniture hindered them from being divided by succession; the

introduction of entails prevented their being broke into small parcels by

alienation.

When land, like moveables, is considered as the means only of subsistence

and enjoyment, the natural law of succession divides it, like them, among

all the children of the family; of all of whom the subsistence and

enjoyment may be supposed equally dear to the father. This natural law of

succession, accordingly, took place among the Romans who made no more

distinction between elder and younger, between male and female, in the

inheritance of lands, than we do in the distribution of moveables. But

when land was considered as the means, not of subsistence merely, but of

power and protection, it was thought better that it should descend

undivided to one. In those disorderly times, every great landlord was a

sort of petty prince. His tenants were his subjects. He was their judge,

and in some respects their legislator in peace and their leader in war. He

made war according to his own discretion, frequently against his

neighbours, and sometimes against his sovereign. The security of a landed

estate, therefore, the protection which its owner could afford to those

who dwelt on it, depended upon its greatness. To divide it was to ruin it,

and to expose every part of it to be oppressed and swallowed up by the

incursions of its neighbours. The law of primogeniture, therefore, came to

take place, not immediately indeed, but in process of time, in the

succession of landed estates, for the same reason that it has generally

taken place in that of monarchies, though not always at their first

institution. That the power, and consequently the security of the

monarchy, may not be weakened by division, it must descend entire to one

of the children. To which of them so important a preference shall be

given, must be determined by some general rule, founded not upon the

doubtful distinctions of personal merit, but upon some plain and evident

difference which can admit of no dispute. Among the children of the same

family there can be no indisputable difference but that of sex, and that

of age. The male sex is universally preferred to the female; and when all

other things are equal, the elder everywhere takes place of the younger.

Hence the origin of the right of primogeniture, and of what is called

lineal succession.

Laws frequently continue in force long after the circumstances which first

gave occasion to them, and which could alone render them reasonable, are

no more. In the present state of Europe, the proprietor of a single acre

of land is as perfectly secure in his possession as the proprietor of

100,000. The right of primogeniture, however, still continues to be

respected; and as of all institutions it is the fittest to support the

pride of family distinctions, it is still likely to endure for many

centuries. In every other respect, nothing can be more contrary to the

real interest of a numerous family, than a right which, in order to enrich

one, beggars all the rest of the children.

Entails are the natural consequences of the law of primogeniture. They

were introduced to preserve a certain lineal succession, of which the law

of primogeniture first gave the idea, and to hinder any part of the

original estate from being carried out of the proposed line, either by

gift, or device, or alienation; either by the folly, or by the misfortune

of any of its successive owners. They were altogether unknown to the

Romans. Neither their substitutions, nor fidei commisses, bear any

resemblance to entails, though some French lawyers have thought proper to

dress the modern institution in the language and garb of those ancient

ones.

When great landed estates were a sort of principalities, entails might not

be unreasonable. Like what are called the fundamental laws of some

monarchies, they might frequently hinder the security of thousands from

being endangered by the caprice or extravagance of one man. But in the

present state of Europe, when small as well as great estates derive their

security from the laws of their country, nothing can be more completely

absurd. They are founded upon the most absurd of all suppositions, the

supposition that every successive generation of men have not an equal

right to the earth, and to all that it possesses; but that the property of

the present generation should be restrained and regulated according to the

fancy of those who died, perhaps five hundred years ago. Entails, however,

are still respected, through the greater part of Europe; In those

countries, particularly, in which noble birth is a necessary qualification

for the enjoyment either of civil or military honours. Entails are thought

necessary for maintaining this exclusive privilege of the nobility to the

great offices and honours of their country; and that order having usurped

one unjust advantage over the rest of their fellow-citizens, lest their

poverty should render it ridiculous, it is thought reasonable that they

should have another. The common law of England, indeed, is said to abhor

perpetuities, and they are accordingly more restricted there than in any

other European monarchy; though even England is not altogether without

them. In Scotland, more than one fifth, perhaps more than one third part

of the whole lands in the country, are at present supposed to be under

strict entail.

Great tracts of uncultivated land were in this manner not only engrossed

by particular families, but the possibility of their being divided again

was as much as possible precluded for ever. It seldom happens, however,

that a great proprietor is a great improver. In the disorderly times which

gave birth to those barbarous institutions, the great proprietor was

sufficiently employed in defending his own territories, or in extending

his jurisdiction and authority over those of his neighbours. He had no

leisure to attend to the cultivation and improvement of land. When the

establishment of law and order afforded him this leisure, he often wanted

the inclination, and almost always the requisite abilities. If the expense

of his house and person either equalled or exceeded his revenue, as it did

very frequently, he had no stock to employ in this manner. If he was an

economist, he generally found it more profitable to employ his annual

savings in new purchases than in the improvement of his old estate. To

improve land with profit, like all other commercial projects, requires an

exact attention to small savings and small gains, of which a man born to a

great fortune, even though naturally frugal, is very seldom capable. The

situation of such a person naturally disposes him to attend rather to

ornament, which pleases his fancy, than to profit, for which he has so

little occasion. The elegance of his dress, of his equipage, of his house

and household furniture, are objects which, from his infancy, he has been

accustomed to have some anxiety about. The turn of mind which this habit

naturally forms, follows him when he comes to think of the improvement of

land. He embellishes, perhaps, four or five hundred acres in the

neighbourhood of his house, at ten times the expense which the land is

worth after all his improvements; and finds, that if he was to improve his

whole estate in the same manner, and he has little taste for any other, he

would be a bankrupt before he had finished the tenth part of it. There

still remain, in both parts of the united kingdom, some great estates

which have continued, without interruption, in the hands of the same

family since the times of feudal anarchy. Compare the present condition of

those estates with the possessions of the small proprietors in their

neighbourhood, and you will require no other argument to convince you how

unfavourable such extensive property is to improvement.

If little improvement was to be expected from such great proprietors,

still less was to be hoped for from those who occupied the land under

them. In the ancient state of Europe, the occupiers of land were all

tenants at will. They were all, or almost all, slaves, but their slavery

was of a milder kind than that known among the ancient Greeks and Romans,

or even in our West Indian colonies. They were supposed to belong more

directly to the land than to their master. They could, therefore, be sold

with it, but not separately. They could marry, provided it was with the

consent of their master; and he could not afterwards dissolve the marriage

by selling the man and wife to different persons. If he maimed or murdered

any of them, he was liable to some penalty, though generally but to a

small one. They were not, however, capable of acquiring property. Whatever

they acquired was acquired to their master, and he could take it from them

at pleasure. Whatever cultivation and improvement could be carried on by

means of such slaves, was properly carried on by their master. It was at

his expense. The seed, the cattle, and the instruments of husbandry, were

all his. It was for his benefit. Such slaves could acquire nothing but

their daily maintenance. It was properly the proprietor himself,

therefore, that in this case occupied his own lands, and cultivated them

by his own bondmen. This species of slavery still subsists in Russia,

Poland, Hungary, Bohemia, Moravia, and other parts of Germany. It is only

in the western and south-western provinces of Europe that it has gradually

been abolished altogether.

But if great improvements are seldom to be expected from great

proprietors, they are least of all to be expected when they employ slaves

for their workmen. The experience of all ages and nations, I believe,

demonstrates that the work done by slaves, though it appears to cost only

their maintenance, is in the end the dearest of any. A person who can

acquire no property can have no other interest but to eat as much and to

labour as little as possible. Whatever work he does beyond what is

sufficient to purchase his own maintenance, can be squeezed out of him by

violence only, and not by any interest of his own. In ancient Italy, how

much the cultivation of corn degenerated, how unprofitable it became to

the master, when it fell under the management of slaves, is remarked both

by Pliny and Columella. In the time of Aristotle, it had not been much

better in ancient Greece. Speaking of the ideal republic described in the

laws of Plato, to maintain 5000 idle men (the number of warriors supposed

necessary for its defence), together with their women and servants, would

require, he says, a territory of boundless extent and fertility, like the

plains of Babylon.

The pride of man makes him love to domineer, and nothing mortifies him so

much as to be obliged to condescend to persuade his inferiors. Wherever

the law allows it, and the nature of the work can afford it, therefore, he

will generally prefer the service of slaves to that of freemen. The

planting of sugar and tobacco can afford the expense of slave cultivation.

The raising of corn, it seems, in the present times, cannot. In the

English colonies, of which the principal produce is corn, the far greater

part of the work is done by freemen. The late resolution of the Quakers in

Pennsylvania, to set at liberty all their negro slaves, may satisfy us

that their number cannot be very great. Had they made any considerable

part of their property, such a resolution could never have been agreed to.

In our sugar colonies., on the contrary, the whole work is done by slaves,

and in our tobacco colonies a very great part of it. The profits of a

sugar plantation in any of our West Indian colonies, are generally much

greater than those of any other cultivation that is known either in Europe

or America; and the profits of a tobacco plantation, though inferior to

those of sugar, are superior to those of corn, as has already been

observed. Both can afford the expense of slave cultivation but sugar can

afford it still better than tobacco. The number of negroes, accordingly,

is much greater, in proportion to that of whites, in our sugar than in our

tobacco colonies.

To the slave cultivators of ancient times gradually succeeded a species of

farmers, known at present in France by the name of metayers. They are

called in Latin Coloni Partiarii. They have been so long in disuse in

England, that at present I know no English name for them. The proprietor

furnished them with the seed, cattle, and instruments of husbandry, the

whole stock, in short, necessary for cultivating the farm. The produce was

divided equally between the proprietor and the farmer, after setting aside

what was judged necessary for keeping up the stock, which was restored to

the proprietor, when the farmer either quitted or was turned out of the

farm.

Land occupied by such tenants is properly cultivated at the expense of the

proprietors, as much as that occupied by slaves. There is, however, one

very essential difference between them. Such tenants, being freemen, are

capable of acquiring property; and having a certain proportion of the

produce of the land, they have a plain interest that the whole produce

should be as great as possible, in order that their own proportion may be

so. A slave, on the contrary, who can acquire nothing but his maintenance,

consults his own ease, by making the land produce as little as possible

over and above that maintenance. It is probable that it was partly upon

account of this advantage, and partly upon account of the encroachments

which the sovereigns, always jealous of the great lords, gradually

encouraged their villains to make upon their authority, and which seem, at

least, to have been such as rendered this species of servitude altogether

inconvenient, that tenure in villanage gradually wore out through the

greater part of Europe. The time and manner, however, in which so

important a revolution was brought about, is one of the most obscure

points in modern history. The church of Rome claims great merit in it; and

it is certain, that so early as the twelfth century, Alexander III.

published a bull for the general emancipation of slaves. It seems,

however, to have been rather a pious exhortation, than a law to which

exact obedience was required from the faithful. Slavery continued to take

place almost universally for several centuries afterwards, till it was

gradually abolished by the joint operation of the two interests above

mentioned; that of the proprietor on the one hand, and that of the

sovereign on the other. A villain, enfranchised, and at the same time

allowed to continue in possession of the land, having no stock of his own,

could cultivate it only by means of what the landlord advanced to him, and

must therefore have been what the French call a metayer.

It could never, however, be the interest even of this last species of

cultivators, to lay out, in the further improvement of the land, any part

of the little stock which they might save from their own share of the

produce; because the landlord, who laid out nothing, was to get one half

of whatever it produced. The tithe, which is but a tenth of the produce,

is found to be a very great hindrance to improvement. A tax, therefore,

which amounted to one half, must have been an effectual bar to it. It

might be the interest of a metayer to make the land produce as much as

could be brought out of it by means of the stock furnished by the

proprietor; but it could never be his interest to mix any part of his own

with it. In France, where five parts out of six of the whole kingdom are

said to be still occupied by this species of cultivators, the proprietors

complain, that their metayers take every opportunity of employing their

master’s cattle rather in carriage than in cultivation; because, in the

one case, they get the whole profits to themselves, in the other they

share them with their landlord. This species of tenants still subsists in

some parts of Scotland. They are called steel-bow tenants. Those ancient

English tenants, who are said by Chief-Baron Gilbert and Dr Blackstone to

have been rather bailiffs of the landlord than farmers, properly so

called, were probably of the same kind.

To this species of tenantry succeeded, though by very slow degrees,

farmers, properly so called, who cultivated the land with their own stock,

paying a rent certain to the landlord. When such farmers have a lease for

a term of years, they may sometimes find it for their interest to lay out

part of their capital in the further improvement of the farm; because they

may sometimes expect to recover it, with a large profit, before the

expiration of the lease. The possession, even of such farmers, however,

was long extremely precarious, and still is so in many parts of Europe.

They could, before the expiration of their term, be legally ousted of

their leases by a new purchaser; in England, even, by the fictitious

action of a common recovery. If they were turned out illegally by the

violence of their master, the action by which they obtained redress was

extremely imperfect. It did not always reinstate them in the possession of

the land, but gave them damages, which never amounted to a real loss. Even

in England, the country, perhaps of Europe, where the yeomanry has always

been most respected, it was not till about the 14th of Henry VII. that the

action of ejectment was invented, by which the tenant recovers, not

damages only, but possession, and in which his claim is not necessarily

concluded by the uncertain decision of a single assize. This action has

been found so effectual a remedy, that, in the modern practice, when the

landlord has occasion to sue for the possession of the land, he seldom

makes use of the actions which properly belong to him as a landlord, the

writ of right or the writ of entry, but sues in the name of his tenant, by

the writ of ejectment. In England, therefore the security of the tenant is

equal to that of the proprietor. In England, besides, a lease for life of

forty shillings a-year value is a freehold, and entitles the lessee to a

vote for a member of parliament; and as a great part of the yeomanry have

freeholds of this kind, the whole order becomes respectable to their

landlords, on account of the political consideration which this gives

them. There is, I believe, nowhere in Europe, except in England, any

instance of the tenant building upon the land of which he had no lease,

and trusting that the honour of his landlord would take no advantage of so

important an improvement. Those laws and customs, so favourable to the

yeomanry, have perhaps contributed more to the present grandeur of

England, than all their boasted regulations of commerce taken together.

The law which secures the longest leases against successors of every kind,

is, so far as I know, peculiar to Great Britain. It was introduced into

Scotland so early as 1449, by a law of James II. Its beneficial influence,

however, has been much obstructed by entails; the heirs of entail being

generally restrained from letting leases for any long term of years,

frequently for more than one year. A late act of parliament has, in this

respect, somewhat slackened their fetters, though they are still by much

too strait. In Scotland, besides, as no leasehold gives a vote for a

member of parliament, the yeomanry are upon this account less respectable

to their landlords than in England.

In other parts of Europe, after it was found convenient to secure tenants

both against heirs and purchasers, the term of their security was still

limited to a very short period; in France, for example, to nine years from

the commencement of the lease. It has in that country, indeed, been lately

extended to twentyseven, a period still too short to encourage the tenant

to make the most important improvements. The proprietors of land were

anciently the legislators of every part of Europe. The laws relating to

land, therefore, were all calculated for what they supposed the interest

of the proprietor. It was for his interest, they had imagined, that no

lease granted by any of his predecessors should hinder him from enjoying,

during a long term of years, the full value of his land. Avarice and

injustice are always short-sighted, and they did not foresee how much this

regulation must obstruct improvement, and thereby hurt, in the long-run,

the real interest of the landlord.

The farmers, too, besides paying the rent, were anciently, it was

supposed, bound to perform a great number of services to the landlord,

which were seldom either specified in the lease, or regulated by any

precise rule, but by the use and wont of the manor or barony. These

services, therefore, being almost entirely arbitrary, subjected the tenant

to many vexations. In Scotland the abolition of all services not precisely

stipulated in the lease, has, in the course of a few years, very much

altered for the better the condition of the yeomanry of that country.

The public services to which the yeomanry were bound, were not less

arbitrary than the private ones. To make and maintain the high roads, a

servitude which still subsists, I believe, everywhere, though with

different degrees of oppression in different countries, was not the only

one. When the king’s troops, when his household, or his officers of any

kind, passed through any part of the country, the yeomanry were bound to

provide them with horses, carriages, and provisions, at a price regulated

by the purveyor. Great Britain is, I believe, the only monarchy in Europe

where the oppression of purveyance has been entirely abolished. It still

subsists in France and Germany.

The public taxes, to which they were subject, were as irregular and

oppressive as the services. The ancient lords, though extremely unwilling

to grant, themselves, any pecuniary aid to their sovereign, easily allowed

him to tallage, as they called it, their tenants, and had not knowledge

enough to foresee how much this must, in the end, affect their own

revenue. The taille, as it still subsists in France may serve as an

example of those ancient tallages. It is a tax upon the supposed profits

of the farmer, which they estimate by the stock that he has upon the farm.

It is his interest, therefore, to appear to have as little as possible,

and consequently to employ as little as possible in its cultivation, and

none in its improvement. Should any stock happen to accumulate in the

hands of a French farmer, the taille is almost equal to a prohibition of

its ever being employed upon the land. This tax, besides, is supposed to

dishonour whoever is subject to it, and to degrade him below, not only the

rank of a gentleman, but that of a burgher; and whoever rents the lands of

another becomes subject to it. No gentleman, nor even any burgher, who has

stock, will submit to this degradation. This tax, therefore, not only

hinders the stock which accumulates upon the land from being employed in

its improvement, but drives away all other stock from it. The ancient

tenths and fifteenths, so usual in England in former times, seem, so far

as they affected the land, to have been taxes of the same nature with the

taille.

Under all these discouragements, little improvement could be expected from

the occupiers of land. That order of people, with all the liberty and

security which law can give, must always improve under great disadvantage.

The farmer, compared with the proprietor, is as a merchant who trades with

burrowed money, compared with one who trades with his own. The stock of

both may improve; but that of the one, with only equal good conduct, must

always improve more slowly than that of the other, on account of the large

share of the profits which is consumed by the interest of the loan. The

lands cultivated by the farmer must, in the same manner, with only equal

good conduct, be improved more slowly than those cultivated by the

proprietor, on account of the large share of the produce which is consumed

in the rent, and which, had the farmer been proprietor, he might have

employed in the further improvement of the land. The station of a farmer,

besides, is, from the nature of things, inferior to that of a proprietor.

Through the greater part of Europe, the yeomanry are regarded as an

inferior rank of people, even to the better sort of tradesmen and

mechanics, and in all parts of Europe to the great merchants and master

manufacturers. It can seldom happen, therefore, that a man of any

considerable stock should quit the superior, in order to place himself in

an inferior station. Even in the present state of Europe, therefore,

little stock is likely to go from any other profession to the improvement

of land in the way of farming. More does, perhaps, in Great Britain than

in any other country, though even there the great stocks which are in some

places employed in farming, have generally been acquired by fanning, the

trade, perhaps, in which, of all others, stock is commonly acquired most

slowly. After small proprietors, however, rich and great farmers are in

every country the principal improvers. There are more such, perhaps, in

England than in any other European monarchy. In the republican governments

of Holland, and of Berne in Switzerland, the farmers are said to be not

inferior to those of England.

The ancient policy of Europe was, over and above all this, unfavourable to

the improvement and cultivation of land, whether carried on by the

proprietor or by the farmer; first, by the general prohibition of the

exportation of corn, without a special licence, which seems to have been a

very universal regulation; and, secondly, by the restraints which were

laid upon the inland commerce, not only of corn, but of almost every other

part of the produce of the farm, by the absurd laws against engrossers,

regraters, and forestallers, and by the privileges of fairs and markets.

It has already been observed in what manner the prohibition of the

exportation of corn, together with some encouragement given to the

importation of foreign corn, obstructed the cultivation of ancient Italy,

naturally the most fertile country in Europe, and at that time the seat of

the greatest empire in the world. To what degree such restraints upon the

inland commerce of this commodity, joined to the general prohibition of

exportation, must have discouraged the cultivation of countries less

fertile, and less favourably circumstanced, it is not, perhaps, very easy

to imagine.

CHAPTER III.

OF THE RISE AND PROGRESS OF CITIES

AND TOWNS, AFTER THE FALL OF THE ROMAN EMPIRE.

The inhabitants of cities and towns were, after the fall of the Roman

empire, not more favoured than those of the country. They consisted,

indeed, of a very different order of people from the first inhabitants of

the ancient republics of Greece and Italy. These last were composed

chiefly of the proprietors of lands, among whom the public territory was

originally divided, and who found it convenient to build their houses in

the neighbourhood of one another, and to surround them with a wall, for

the sake of common defence. After the fall of the Roman empire, on the

contrary, the proprietors of land seem generally to have lived in

fortified castles on their own estates, and in the midst of their own

tenants and dependants. The towns were chiefly inhabited by tradesmen and

mechanics, who seem, in those days, to have been of servile, or very

nearly of servile condition. The privileges which we find granted by

ancient charters to the inhabitants of some of the principal towns in

Europe, sufficiently show what they were before those grants. The people

to whom it is granted as a privilege, that they might give away their own

daughters in marriage without the consent of their lord, that upon their

death their own children, and not their lord, should succeed to their

goods, and that they might dispose of their own effects by will, must,

before those grants, have been either altogether, or very nearly, in the

same state of villanage with the occupiers of land in the country.

They seem, indeed, to have been a very poor, mean set of people, who

seemed to travel about with their goods from place to place, and from fair

to fair, like the hawkers and pedlars of the present times. In all the

different countries of Europe then, in the same manner as in several of

the Tartar governments of Asia at present, taxes used to be levied upon

the persons and goods of travellers, when they passed through certain

manors, when they went over certain bridges, when they carried about their

goods from place to place in a fair, when they erected in it a booth or

stall to sell them in. These different taxes were known in England by the

names of passage, pontage, lastage, and stallage. Sometimes the king,

sometimes a great lord, who had, it seems, upon some occasions, authority

to do this, would grant to particular traders, to such particularly as

lived in their own demesnes, a general exemption from such taxes. Such

traders, though in other respects of servile, or very nearly of servile

condition, were upon this account called free traders. They, in return,

usually paid to their protector a sort of annual poll-tax. In those days

protection was seldom granted without a valuable consideration, and this

tax might perhaps be considered as compensation for what their patrons

might lose by their exemption from other taxes. At first, both those

poll-taxes and those exemptions seem to have been altogether personal, and

to have affected only particular individuals, during either their lives,

or the pleasure of their protectors. In the very imperfect accounts which

have been published from Doomsday-book, of several of the towns of

England, mention is frequently made, sometimes of the tax which particular

burghers paid, each of them, either to the king, or to some other great

lord, for this sort of protection, and sometimes of the general amount

only of all those taxes. {see Brady’s Historical Treatise of Cities and

Boroughs, p. 3. etc.}

But how servile soever may have been originally the condition of the

inhabitants of the towns, it appears evidently, that they arrived at

liberty and independency much earlier than the occupiers of land in the

country. That part of the king’s revenue which arose from such poll-taxes

in any particular town, used commonly to be let in farm, during a term of

years, for a rent certain, sometimes to the sheriff of the county, and

sometimes to other persons. The burghers themselves frequently got credit

enough to be admitted to farm the revenues of this sort which arose out of

their own town, they becoming jointly and severally answerable for the

whole rent. {See Madox, Firma Burgi, p. 18; also History of the Exchequer,

chap. 10, sect. v, p. 223, first edition.} To let a farm in this manner,

was quite agreeable to the usual economy of, I believe, the sovereigns of

all the different countries of Europe, who used frequently to let whole

manors to all the tenants of those manors, they becoming jointly and

severally answerable for the whole rent; but in return being allowed to

collect it in their own way, and to pay it into the king’s exchequer by

the hands of their own bailiff, and being thus altogether freed from the

insolence of the king’s officers; a circumstance in those days regarded as

of the greatest importance.

At first, the farm of the town was probably let to the burghers, in the

same manner as it had been to other farmers, for a term of years only. In

process of time, however, it seems to have become the general practice to

grant it to them in fee, that is for ever, reserving a rent certain, never

afterwards to be augmented. The payment having thus become perpetual, the

exemptions, in return, for which it was made, naturally became perpetual

too. Those exemptions, therefore, ceased to be personal, and could not

afterwards be considered as belonging to individuals, as individuals, but

as burghers of a particular burgh, which, upon this account, was called a

free burgh, for the same reason that they had been called free burghers or

free traders.

Along with this grant, the important privileges, above mentioned, that

they might give away their own daughters in marriage, that their children

should succeed to them, and that they might dispose of their own effects

by will, were generally bestowed upon the burghers of the town to whom it

was given. Whether such privileges had before been usually granted, along

with the freedom of trade, to particular burghers, as individuals, I know

not. I reckon it not improbable that they were, though I cannot produce

any direct evidence of it. But however this may have been, the principal

attributes of villanage and slavery being thus taken away from them, they

now at least became really free, in our present sense of the word freedom.

Nor was this all. They were generally at the same time erected into a

commonalty or corporation, with the privilege of having magistrates and a

town-council of their own, of making bye-laws for their own government, of

building walls for their own defence, and of reducing all their

inhabitants under a sort of military discipline, by obliging them to watch

and ward; that is, as anciently understood, to guard and defend those

walls against all attacks and surprises, by night as well as by day. In

England they were generally exempted from suit to the hundred and county

courts: and all such pleas as should arise among them, the pleas of the

crown excepted, were left to the decision of their own magistrates. In

other countries, much greater and more extensive jurisdictions were

frequently granted to them. {See Madox, Firma Burgi. See also Pfeffel in

the Remarkable events under Frederick II. and his Successors of the House

of Suabia.}

It might, probably, be necessary to grant to such towns as were admitted

to farm their own revenues, some sort of compulsive jurisdiction to oblige

their own citizens to make payment. In those disorderly times, it might

have been extremely inconvenient to have left them to seek this sort of

justice from any other tribunal. But it must seem extraordinary, that the

sovereigns of all the different countries of Europe should have exchanged

in this manner for a rent certain, never more to be augmented, that branch

of their revenue, which was, perhaps, of all others, the most likely to be

improved by the natural course of things, without either expense or

attention of their own; and that they should, besides, have in this manner

voluntarily erected a sort of independent republics in the heart of their

own dominions.

In order to understand this, it must be remembered, that, in those days,

the sovereign of perhaps no country in Europe was able to protect, through

the whole extent of his dominions, the weaker part of his subjects from

the oppression of the great lords. Those whom the law could not protect,

and who were not strong enough to defend themselves, were obliged either

to have recourse to the protection of some great lord, and in order to

obtain it, to become either his slaves or vassals; or to enter into a

league of mutual defence for the common protection of one another. The

inhabitants of cities and burghs, considered as single individuals, had no

power to defend themselves; but by entering into a league of mutual

defence with their neighbours, they were capable of making no contemptible

resistance. The lords despised the burghers, whom they considered not only

as a different order, but as a parcel of emancipated slaves, almost of a

different species from themselves. The wealth of the burghers never failed

to provoke their envy and indignation, and they plundered them upon every

occasion without mercy or remorse. The burghers naturally hated and feared

the lords. The king hated and feared them too; but though, perhaps, he

might despise, he had no reason either to hate or fear the burghers.

Mutual interest, therefore, disposed them to support the king, and the

king to support them against the lords. They were the enemies of his

enemies, and it was his interest to render them as secure and independent

of those enemies as he could. By granting them magistrates of their own,

the privilege of making bye-laws for their own government, that of

building walls for their own defence, and that of reducing all their

inhabitants under a sort of military discipline, he gave them all the

means of security and independency of the barons which it was in his power

to bestow. Without the establishment of some regular government of this

kind, without some authority to compel their inhabitants to act according

to some certain plan or system, no voluntary league of mutual defence

could either have afforded them any permanent security, or have enabled

them to give the king any considerable support. By granting them the farm

of their own town in fee, he took away from those whom he wished to have

for his friends, and, if one may say so, for his allies, all ground of

jealousy and suspicion, that he was ever afterwards to oppress them,

either by raising the farm-rent of their town, or by granting it to some

other farmer.

The princes who lived upon the worst terms with their barons, seem

accordingly to have been the most liberal in grants of this kind to their

burghs. King John of England, for example, appears to have been a most

munificent benefactor to his towns. {See Madox.} Philip I. of France lost

all authority over his barons. Towards the end of his reign, his son

Lewis, known afterwards by the name of Lewis the Fat, consulted, according

to Father Daniel, with the bishops of the royal demesnes, concerning the

most proper means of restraining the violence of the great lords. Their

advice consisted of two different proposals. One was to erect a new order

of jurisdiction, by establishing magistrates and a town-council in every

considerable town of his demesnes. The other was to form a new militia, by

making the inhabitants of those towns, under the command of their own

magistrates, march out upon proper occasions to the assistance of the

king. It is from this period, according to the French antiquarians, that

we are to date the institution of the magistrates and councils of cities

in France. It was during the unprosperous reigns of the princes of the

house of Suabia, that the greater part of the free towns of Germany

received the first grants of their privileges, and that the famous

Hanseatic league first became formidable. {See Pfeffel.}

The militia of the cities seems, in those times, not to have been inferior

to that of the country; and as they could be more readily assembled upon

any sudden occasion, they frequently had the advantage in their disputes

with the neighbouring lords. In countries such as Italy or Switzerland, in

which, on account either of their distance from the principal seat of

government, of the natural strength of the country itself, or of some

other reason, the sovereign came to lose the whole of his authority; the

cities generally became independent republics, and conquered all the

nobility in their neighbourhood; obliging them to pull down their castles

in the country, and to live, like other peaceable inhabitants, in the

city. This is the short history of the republic of Berne, as well as of

several other cities in Switzerland. If you except Venice, for of that

city the history is somewhat different, it is the history of all the

considerable Italian republics, of which so great a number arose and

perished between the end of the twelfth and the beginning of the sixteenth

century.

In countries such as France and England, where the authority of the

sovereign, though frequently very low, never was destroyed altogether, the

cities had no opportunity of becoming entirely independent. They became,

however, so considerable, that the sovereign could impose no tax upon

them, besides the stated farm-rent of the town, without their own consent.

They were, therefore, called upon to send deputies to the general assembly

of the states of the kingdom, where they might join with the clergy and

the barons in granting, upon urgent occasions, some extraordinary aid to

the king. Being generally, too, more favourable to his power, their

deputies seem sometimes to have been employed by him as a counterbalance

in those assemblies to the authority of the great lords. Hence the origin

of the representation of burghs in the states-general of all great

monarchies in Europe.

Order and good government, and along with them the liberty and security of

individuals, were in this manner established in cities, at a time when the

occupiers of land in the country, were exposed to every sort of violence.

But men in this defenceless state naturally content themselves with their

necessary subsistence; because, to acquire more, might only tempt the

injustice of their oppressors. On the contrary, when they are secure of

enjoying the fruits of their industry, they naturally exert it to better

their condition, and to acquire not only the necessaries, but the

conveniencies and elegancies of life. That industry, therefore, which aims

at something more than necessary subsistence, was established in cities

long before it was commonly practised by the occupiers of land in the

country. If, in the hands of a poor cultivator, oppressed with the

servitude of villanage, some little stock should accumulate, he would

naturally conceal it with great care from his master, to whom it would

otherwise have belonged, and take the first opportunity of running away to

a town. The law was at that time so indulgent to the inhabitants of towns,

and so desirous of diminishing the authority of the lords over those of

the country, that if he could conceal himself there from the pursuit of

his lord for a year, he was free for ever. Whatever stock, therefore,

accumulated in the hands of the industrious part of the inhabitants of the

country, naturally took refuge in cities, as the only sanctuaries in which

it could be secure to the person that acquired it.

The inhabitants of a city, it is true, must always ultimately derive their

subsistence, and the whole materials and means of their industry, from the

country. But those of a city, situated near either the sea-coast or the

banks of a navigable river, are not necessarily confined to derive them

from the country in their neighbourhood. They have a much wider range, and

may draw them from the most remote corners of the world, either in

exchange for the manufactured produce of their own industry, or by

performing the office of carriers between distant countries, and

exchanging the produce of one for that of another. A city might, in this

manner, grow up to great wealth and splendour, while not only the country

in its neighbourhood, but all those to which it traded, were in poverty

and wretchedness. Each of those countries, perhaps, taken singly, could

afford it but a small part, either of its subsistence or of its

employment; but all of them taken together, could afford it both a great

subsistence and a great employment. There were, however, within the narrow

circle of the commerce of those times, some countries that were opulent

and industrious. Such was the Greek empire as long as it subsisted, and

that of the Saracens during the reigns of the Abassides. Such, too, was

Egypt till it was conquered by the Turks, some part of the coast of

Barbary, and all those provinces of Spain which were under the government

of the Moors.

The cities of Italy seem to have been the first in Europe which were

raised by commerce to any considerable degree of opulence. Italy lay in

the centre of what was at that time the improved and civilized part of the

world. The crusades, too, though, by the great waste of stock and

destruction of inhabitants which they occasioned, they must necessarily

have retarded the progress of the greater part of Europe, were extremely

favourable to that of some Italian cities. The great armies which marched

from all parts to the conquest of the Holy Land, gave extraordinary

encouragement to the shipping of Venice, Genoa, and Pisa, sometimes in

transporting them thither, and always in supplying them with provisions.

They were the commissaries, if one may say so, of those armies; and the

most destructive frenzy that ever befel the European nations, was a source

of opulence to those republics.

The inhabitants of trading cities, by importing the improved manufactures

and expensive luxuries of richer countries, afforded some food to the

vanity of the great proprietors, who eagerly purchased them with great

quantities of the rude produce of their own lands. The commerce of a great

part of Europe in those times, accordingly, consisted chiefly in the

exchange of their own rude, for the manufactured produce of more civilized

nations. Thus the wool of England used to be exchanged for the wines of

France, and the fine cloths of Flanders, in the same manner as the corn in

Poland is at this day, exchanged for the wines and brandies of France, and

for the silks and velvets of France and Italy.

A taste for the finer and more improved manufactures was, in this manner,

introduced by foreign commerce into countries where no such works were

carried on. But when this taste became so general as to occasion a

considerable demand, the merchants, in order to save the expense of

carriage, naturally endeavoured to establish some manufactures of the same

kind in their own country. Hence the origin of the first manufactures for

distant sale, that seem to have been established in the western provinces

of Europe, after the fall of the Roman empire.

No large country, it must be observed, ever did or could subsist without

some sort of manufactures being carried on in it; and when it is said of

any such country that it has no manufactures, it must always be understood

of the finer and more improved, or of such as are fit for distant sale. In

every large country both the clothing and household furniture or the far

greater part of the people, are the produce of their own industry. This is

even more universally the case in those poor countries which are commonly

said to have no manufactures, than in those rich ones that are said to

abound in them. In the latter you will generally find, both in the clothes

and household furniture of the lowest rank of people, a much greater

proportion of foreign productions than in the former.

Those manufactures which are fit for distant sale, seem to have been

introduced into different countries in two different ways.

Sometimes they have been introduced in the manner above mentioned, by the

violent operation, if one may say so, of the stocks of particular

merchants and undertakers, who established them in imitation of some

foreign manufactures of the same kind. Such manufactures, therefore, are

the offspring of foreign commerce; and such seem to have been the ancient

manufactures of silks, velvets, and brocades, which flourished in Lucca

during the thirteenth century. They were banished from thence by the

tyranny of one of Machiavel’s heroes, Castruccio Castracani. In 1310, nine

hundred families were driven out of Lucca, of whom thirty-one retired to

Venice, and offered to introduce there the silk manufacture. {See Sandi

Istoria civile de Vinezia, part 2 vol. i, page 247 and 256.} Their offer

was accepted, many privileges were conferred upon them, and they began the

manufacture with three hundred workmen. Such, too, seem to have been the

manufactures of fine cloths that anciently flourished in Flanders, and

which were introduced into England in the beginning of the reign of

Elizabeth, and such are the present silk manufactures of Lyons and

Spitalfields. Manufactures introduced in this manner are generally

employed upon foreign materials, being imitations of foreign manufactures.

When the Venetian manufacture was first established, the materials were

all brought from Sicily and the Levant. The more ancient manufacture of

Lucca was likewise carried on with foreign materials. The cultivation of

mulberry trees, and the breeding of silk-worms, seem not to have been

common in the northern parts of Italy before the sixteenth century. Those

arts were not introduced into France till the reign of Charles IX. The

manufactures of Flanders were carried on chiefly with Spanish and English

wool. Spanish wool was the material, not of the first woollen manufacture

of England, but of the first that was fit for distant sale. More than one

half the materials of the Lyons manufacture is at this day foreign silk;

when it was first established, the whole, or very nearly the whole, was

so. No part of the materials of the Spitalfields manufacture is ever

likely to be the produce of England. The seat of such manufactures, as

they are generally introduced by the scheme and project of a few

individuals, is sometimes established in a maritime city, and sometimes in

an inland town, according as their interest, judgment, or caprice, happen

to determine.

At other times, manufactures for distant sale grow up naturally, and as it

were of their own accord, by the gradual refinement of those household and

coarser manufactures which must at all times be carried on even in the

poorest and rudest countries. Such manufactures are generally employed

upon the materials which the country produces, and they seem frequently to

have been first refined and improved in such inland countries as were not,

indeed, at a very great, but at a considerable distance from the

sea-coast, and sometimes even from all water carriage. An inland country,

naturally fertile and easily cultivated, produces a great surplus of

provisions beyond what is necessary for maintaining the cultivators; and

on account of the expense of land carriage, and inconveniency of river

navigation, it may frequently be difficult to send this surplus abroad.

Abundance, therefore, renders provisions cheap, and encourages a great

number of workmen to settle in the neighbourhood, who find that their

industry can there procure them more of the necessaries and conveniencies

of life than in other places. They work up the materials of manufacture

which the land produces, and exchange their finished work, or, what is the

same thing, the price of it, for more materials and provisions. They give

a new value to the surplus part of the rude produce, by saving the expense

of carrying it to the water-side, or to some distant market; and they

furnish the cultivators with something in exchange for it that is either

useful or agreeable to them, upon easier terms than they could have

obtained it before. The cultivators get a better price for their surplus

produce, and can purchase cheaper other conveniencies which they have

occasion for. They are thus both encouraged and enabled to increase this

surplus produce by a further improvement and better cultivation of the

land; and as the fertility of the land had given birth to the manufacture,

so the progress of the manufacture re-acts upon the land, and increases

still further its fertility. The manufacturers first supply the

neighbourhood, and afterwards, as their work improves and refines, more

distant markets. For though neither the rude produce, nor even the coarse

manufacture, could, without the greatest difficulty, support the expense

of a considerable land-carriage, the refined and improved manufacture

easily may. In a small bulk it frequently contains the price of a great

quantity of rude produce. A piece of fine cloth, for example which weighs

only eighty pounds, contains in it the price, not only of eighty pounds

weight of wool, but sometimes of several thousand weight of corn, the

maintenance of the different working people, and of their immediate

employers. The corn which could with difficulty have been carried abroad

in its own shape, is in this manner virtually exported in that of the

complete manufacture, and may easily be sent to the remotest corners of

the world. In this manner have grown up naturally, and, as it were, of

their own accord, the manufactures of Leeds, Halifax, Sheffield,

Birmingham, and Wolverhampton. Such manufactures are the offspring of

agriculture. In the modern history of Europe, their extension and

improvement have generally been posterior to those which were the

offspring of foreign commerce. England was noted for the manufacture of

fine cloths made of Spanish wool, more than a century before any of those

which now flourish in the places above mentioned were fit for foreign

sale. The extension and improvement of these last could not take place but

in consequence of the extension and improvement of agriculture, the last

and greatest effect of foreign commerce, and of the manufactures

immediately introduced by it, and which I shall now proceed to explain.

CHAPTER IV.

HOW THE COMMERCE OF TOWNS CONTRIBUTED

TO THE IMPROVEMENT OF THE COUNTRY.

The increase and riches of commercial and manufacturing towns contributed

to the improvement and cultivation of the countries to which they

belonged, in three different ways.

First, by affording a great and ready market for the rude produce of the

country, they gave encouragement to its cultivation and further

improvement. This benefit was not even confined to the countries in which

they were situated, but extended more or less to all those with which they

had any dealings. To all of them they afforded a market for some part

either of their rude or manufactured produce, and, consequently, gave some

encouragement to the industry and improvement of all. Their own country,

however, on account of its neighbourhood, necessarily derived the greatest

benefit from this market. Its rude produce being charged with less

carriage, the traders could pay the growers a better price for it, and yet

afford it as cheap to the consumers as that of more distant countries.

Secondly, the wealth acquired by the inhabitants of cities was frequently

employed in purchasing such lands as were to be sold, of which a great

part would frequently be uncultivated. Merchants are commonly ambitious of

becoming country gentlemen, and, when they do, they are generally the best

of all improvers. A merchant is accustomed to employ his money chiefly in

profitable projects; whereas a mere country gentleman is accustomed to

employ it chiefly in expense. The one often sees his money go from him,

and return to him again with a profit; the other, when once he parts with

it, very seldom expects to see any more of it. Those different habits

naturally affect their temper and disposition in every sort of business.

The merchant is commonly a bold, a country gentleman a timid undertaker.

The one is not afraid to lay out at once a large capital upon the

improvement of his land, when he has a probable prospect of raising the

value of it in proportion to the expense; the other, if he has any

capital, which is not always the case, seldom ventures to employ it in

this manner. If he improves at all, it is commonly not with a capital, but

with what he can save out or his annual revenue. Whoever has had the

fortune to live in a mercantile town, situated in an unimproved country,

must have frequently observed how much more spirited the operations of

merchants were in this way, than those of mere country gentlemen. The

habits, besides, of order, economy, and attention, to which mercantile

business naturally forms a merchant, render him much fitter to execute,

with profit and success, any project of improvement.

Thirdly, and lastly, commerce and manufactures gradually introduced order

and good government, and with them the liberty and security of

individuals, among the inhabitants of the country, who had before lived

almost in a continual state of war with their neighbours, and of servile

dependency upon their superiors. This, though it has been the least

observed, is by far the most important of all their effects. Mr Hume is

the only writer who, so far as I know, has hitherto taken notice of it.