Chapter XVII: Part III: Of the variations in the Proportion between the respective (1)

Values of that sort of Produce which always affords Rent, and of that
which sometimes does, and sometimes does not, afford Rent.

The increasing abundance of food, in consequence of the increasing
improvement and cultivation, must necessarily increase the demand for
every part of the produce of land which is not food, and which can be
applied either to use or to ornament. In the whole progress of
improvement, it might, therefore, be expected there should be only one
variation in the comparative values of those two different sorts of
produce. The value of that sort which sometimes does, and sometimes does
not afford rent, should constantly rise in proportion to that which always
affords some rent. As art and industry advance, the materials of clothing
and lodging, the useful fossils and materials of the earth, the precious
metals and the precious stones, should gradually come to be more and more
in demand, should gradually exchange for a greater and a greater quantity
of food; or, in other words, should gradually become dearer and dearer.
This, accordingly, has been the case with most of these things upon most
occasions, and would have been the case with all of them upon all
occasions, if particular accidents had not, upon some occasions, increased
the supply of some of them in a still greater proportion than the demand.

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

The great market for silver is the commercial and civilized part of the
world.

If, by the general progress of improvement, the demand of this market
should increase, while, at the same time, the supply did not increase in
the same proportion, the value of silver would gradually rise in
proportion to that of corn. Any given quantity of silver would exchange
for a greater and a greater quantity of corn; or, in other words, the
average money price of corn would gradually become cheaper and cheaper.

If, on the contrary, the supply, by some accident, should increase, for
many years together, in a greater proportion than the demand, that metal
would gradually become cheaper and cheaper; or, in other words, the
average money price of corn would, in spite of all improvements, gradually
become dearer and dearer.

But if, on the other hand, the supply of that metal should increase nearly
in the same proportion as the demand, it would continue to purchase or
exchange for nearly the same quantity of corn; and the average money price
of corn would, in spite of all improvements. continue very nearly the
same.

These three seem to exhaust all the possible combinations of events which
can happen in the progress of improvement; and during the course of the
four centuries preceding the present, if we may judge by what has happened
both in France and Great Britain, each of those three different
combinations seems to have taken place in the European market, and nearly
in the same order, too, in which I have here set them down.

_Digression concerning the Variations in the value of Silver during the
Course of the Four last Centuries._

First Period.—In 1350, and for some time before, the average price
of the quarter of wheat in England seems not to have been estimated lower
than four ounces of silver, Tower weight, equal to about twenty shillings
of our present money. From this price it seems to have fallen gradually to
two ounces of silver, equal to about ten shillings of our present money,
the price at which we find it estimated in the beginning of the sixteenth
century, and at which it seems to have continued to be estimated till
about 1570.

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

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

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

These prices are not recorded, on account of their extraordinary dearness
or cheapness, but are mentioned accidentally, as the prices actually paid
for large quantities of grain consumed at a feast, which was famous for
its magnificence.

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

From these different facts, therefore, we seem to have some reason to
conclude that, about the middle of the fourteenth century, and for a
considerable time before, the average or ordinary price of the quarter of
wheat was not supposed to be less than four ounces of silver, Tower
weight.

From about the middle of the fourteenth to the beginning of the sixteenth
century, what was reckoned the reasonable and moderate, that is, the
ordinary or average price of wheat, seems to have sunk gradually to about
one half of this price; so as at last to have fallen to about two ounces
of silver, Tower weight, equal to about ten shillings of our present
money. It continued to be estimated at this price till about 1570.

In the household book of Henry, the fifth earl of Northumberland, drawn up
in 1512 there are two different estimations of wheat. In one of them it is
computed at six shilling and eightpence the quarter, in the other at five
shillings and eightpence only. In 1512, six shillings and eightpence
contained only two ounces of silver, Tower weight, and were equal to about
ten shillings of our present money.

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

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

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

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

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

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

In their observations upon the prices of corn, three different
circumstances seem frequently to have misled them.

First, in ancient times, almost all rents were paid in kind; in a certain
quantity of corn, cattle, poultry, etc. It sometimes happened, however,
that the landlord would stipulate, that he should be at liberty to demand
of the tenant, either the annual payment in kind or a certain sum of money
instead of it. The price at which the payment in kind was in this manner
exchanged for a certain sum of money, is in Scotland called the conversion
price. As the option is always in the landlord to take either the
substance or the price, it is necessary, for the safety of the tenant,
that the conversion price should rather be below than above the average
market price. In many places, accordingly, it is not much above one half
of this price. Through the greater part of Scotland this custom still
continues with regard to poultry, and in some places with regard to
cattle. It might probably have continued to take place, too, with regard
to corn, had not the institution of the public fiars put an end to it.
These are annual valuations, according to the judgment of an assize, of
the average price of all the different sorts of grain, and of all the
different qualities of each, according to the actual market price in every
different county. This institution rendered it sufficiently safe for the
tenant, and much more convenient for the landlord, to convert, as they
call it, the corn rent, rather at what should happen to be the price of
the fiars of each year, than at any certain fixed price. But the writers
who have collected the prices of corn in ancient times seem frequently to
have mistaken what is called in Scotland the conversion price for the
actual market price. Fleetwood acknowledges, upon one occasion, that he
had made this mistake. As he wrote his book, however, for a particular
purpose, he does not think proper to make this acknowledgment till after
transcribing this conversion price fifteen times. The price is eight
shillings the quarter of wheat. This sum in 1423, the year at which he
begins with it, contained the same quantity of silver as sixteen shillings
of our present money. But in 1562, the year at which he ends with it, it
contained no more than the same nominal sum does at present.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Gold and silver, as they are naturally of the greatest value among the
richest, so they are naturally of the least value among the poorest
nations. Among savages, the poorest of all nations, they are scarce of any
value.

In great towns, corn is always dearer than in remote parts of the country.
This, however, is the effect, not of the real cheapness of silver, but of
the real dearness of corn. It does not cost less labour to bring silver to
the great town than to the remote parts of the country; but it costs a
great deal more to bring corn.

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

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

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

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

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

From 1595 to 1620, both inclusive, the average price of the quarter of
nine bushels of the best wheat, at Windsor market, appears, from the
accounts of Eton college, to have been £ 2:1:6 ⁹⁄₁₃. From which sum,
neglecting the fraction, and deducting a ninth, or 4s. 7 ⅓d., the price
of the quarter of eight bushels comes out to have been £ 1:16:10 ⅔. And
from this sum, neglecting likewise the fraction, and deducting a ninth, or
4s. 1 ⅑d., for the difference between the price of the best wheat and
that of the middle wheat, the price of the middle wheat comes out to have
been about £ 1:12:8 ⁸⁄₉, or about six ounces and one-third of an ounce of
silver.

From 1621 to 1636, both inclusive, the average price of the same measure
of the best wheat, at the same market, appears, from the same accounts, to
have been £ 2:10s.; from which, making the like deductions as in the
foregoing case, the average price of the quarter of eight bushels of
middle wheat comes out to have been £ 1:19:6, or about seven ounces and
two-thirds of an ounce of silver.

Third Period.—Between 1630 and 1640, or about 1636, the effect of
the discovery of the mines of America, in reducing the value of silver,
appears to have been completed, and the value of that metal seems never to
have sunk lower in proportion to that of corn than it was about that time.
It seems to have risen somewhat in the course of the present century, and
it had probably begun to do so, even some time before the end of the last.

From 1637 to 1700, both inclusive, being the sixty-four last years of the
last century the average price of the quarter of nine bushels of the best
wheat, at Windsor market, appears, from the same accounts, to have been £
2:11:0 ⅓, which is only 1s. 0 ⅓d. dearer than it had been during the
sixteen years before. But, in the course of these sixty-four years, there
happened two events, which must have produced a much greater scarcity of
corn than what the course of the seasons would otherwise have occasioned,
and which, therefore, without supposing any further reduction in the
value of silver, will much more than account for this very small
enhancement of price.

The first of these events was the civil war, which, by discouraging
tillage and interrupting commerce, must have raised the price of corn much
above what the course of the seasons would otherwise have occasioned. It
must have had this effect, more or less, at all the different markets in
the kingdom, but particularly at those in the neighbourhood of London,
which require to be supplied from the greatest distance. In 1648,
accordingly, the price of the best wheat, at Windsor market, appears, from
the same accounts, to have been £ 4:5s., and, in 1649, to have been £ 4,
the quarter of nine bushels. The excess of those two years above £ 2:10s.
(the average price of the sixteen years preceding 1637) is £ 3:5s., which,
divided among the sixty four last years of the last century, will alone
very nearly account for that small enhancement of price which seems to
have taken place in them. These, however, though the highest, are by no
means the only high prices which seem to have been occasioned by the civil
wars.

The second event was the bounty upon the exportation of corn, granted in
1688. The bounty, it has been thought by many people, by encouraging
tillage, may, in a long course of years, have occasioned a greater
abundance, and, consequently, a greater cheapness of corn in the home
market, than what would otherwise have taken place there. How far the
bounty could produce this effect at any time I shall examine hereafter: I
shall only observe at present, that between 1688 and 1700, it had not time
to produce any such effect. During this short period, its only effect must
have been, by encouraging the exportation of the surplus produce of every
year, and thereby hindering the abundance of one year from compensating
the scarcity of another, to raise the price in the home market. The
scarcity which prevailed in England, from 1693 to 1699, both inclusive,
though no doubt principally owing to the badness of the seasons, and,
therefore, extending through a considerable part of Europe, must have been
somewhat enhanced by the bounty. In 1699, accordingly, the further
exportation of corn was prohibited for nine months.

There was a third event which occurred in the course of the same period,
and which, though it could not occasion any scarcity of corn, nor,
perhaps, any augmentation in the real quantity of silver which was usually
paid for it, must necessarily have occasioned some augmentation in the
nominal sum. This event was the great debasement of the silver coin, by
clipping and wearing. This evil had begun in the reign of Charles II. and
had gone on continually increasing till 1695; at which time, as we may
learn from Mr Lowndes, the current silver coin was, at an average, near
five-and-twenty per cent. below its standard value. But the nominal sum
which constitutes the market price of every commodity is necessarily
regulated, not so much by the quantity of silver, which, according to the
standard, ought to be contained in it, as by that which, it is found by
experience, actually is contained in it. This nominal sum, therefore, is
necessarily higher when the coin is much debased by clipping and wearing,
than when near to its standard value.

In the course of the present century, the silver coin has not at any time
been more below its standard weight than it is at present. But though very
much defaced, its value has been kept up by that of the gold coin, for
which it is exchanged. For though, before the late recoinage, the gold
coin was a good deal defaced too, it was less so than the silver. In 1695,
on the contrary, the value of the silver coin was not kept up by the gold
coin; a guinea then commonly exchanging for thirty shillings of the worn
and clipt silver. Before the late recoinage of the gold, the price of
silver bullion was seldom higher than five shillings and sevenpence an
ounce, which is but fivepence above the mint price. But in 1695, the
common price of silver bullion was six shillings and fivepence an ounce,
{Lowndes’s Essay on the Silver Coin, 68.} which is fifteen pence above the
mint price. Even before the late recoinage of the gold, therefore, the
coin, gold and silver together, when compared with silver bullion, was not
supposed to be more than eight per cent. below its standard value, In
1695, on the contrary, it had been supposed to be near five-and-twenty per
cent. below that value. But in the beginning of the present century, that
is, immediately after the great recoinage in King William’s time, the
greater part of the current silver coin must have been still nearer to its
standard weight than it is at present. In the course of the present
century, too, there has been no great public calamity, such as a civil
war, which could either discourage tillage, or interrupt the interior
commerce of the country. And though the bounty which has taken place
through the greater part of this century, must always raise the price of
corn somewhat higher than it otherwise would be in the actual state of
tillage; yet, as in the course of this century, the bounty has had full
time to produce all the good effects commonly imputed to it to encourage
tillage, and thereby to increase the quantity of corn in the home market,
it may, upon the principles of a system which I shall explain and examine
hereafter, be supposed to have done something to lower the price of that
commodity the one way, as well as to raise it the other. It is by many
people supposed to have done more. In the sixty-four years of the present
century, accordingly, the average price of the quarter of nine bushels of
the best wheat, at Windsor market, appears, by the accounts of Eton
college, to have been £ 2:0:6 ¹⁰⁄₃₂, which is about ten shillings and
sixpence, or more than five-and-twenty percent. cheaper than it had been
during the sixty-four last years of the last century; and about nine
shillings and sixpence cheaper than it had been during the sixteen years
preceding 1636, when the discovery of the abundant mines of America may be
supposed to have produced its full effect; and about one shilling cheaper
than it had been in the twenty-six years preceding 1620, before that
discovery can well be supposed to have produced its full effect. According
to this account, the average price of middle wheat, during these
sixty-four first years of the present century, comes out to have been
about thirty-two shillings the quarter of eight bushels.

The value of silver, therefore, seems to have risen somewhat in proportion
to that of corn during the course of the present century, and it had
probably begun to do so even some time before the end of the last.

In 1687, the price of the quarter of nine bushels of the best wheat, at
Windsor market, was £ 1:5:2, the lowest price at which it had ever been
from 1595.

In 1688, Mr Gregory King, a man famous for his knowledge in matters of
this kind, estimated the average price of wheat, in years of moderate
plenty, to be to the grower 3s. 6d. the bushel, or eight-and-twenty
shillings the quarter. The grower’s price I understand to be the same with
what is sometimes called the contract price, or the price at which a
farmer contracts for a certain number of years to deliver a certain
quantity of corn to a dealer. As a contract of this kind saves the farmer
the expense and trouble of marketing, the contract price is generally
lower than what is supposed to be the average market price. Mr King had
judged eight-and-twenty shillings the quarter to be at that time the
ordinary contract price in years of moderate plenty. Before the scarcity
occasioned by the late extraordinary course of bad seasons, it was, I have
been assured, the ordinary contract price in all common years.