vate promissory notes consists in the moveable and immoveable goods of the debtor. And public funds or stocks have their mortgages in a particular branch of the revenue.

This merchandize, these moveable and immoveable goods, and this branch of public revenue, constitute part of the fixed capital, of the circulating capital, and of the stock reserved for immediate consumption: it would, therefore, be assigning a double employment to the same thing, if they were comprised in the capital of a country; which would lead to a confusion subversive of the first principles of political ●conomy.*

It is improperly that Adam Smith has placed them on a par with metallic currency, assigned them the same nature, and enumerated them as part of the capital of a country. That bills of exchange, notes and stocks belong to other branches of the science, will be proved hereafter, when I shall inquire into their nature, effects, and co-operation in the formation and distribution of wealth.

Lastly, that part of capital which Adam Smith reserves for immediate consumption, is exactly that which Dr. Quesnay calls revenue.

The latter asserts, that " the totality of the revenue must return to annual circulation, and pervade it through all its extent; and that no pecuniary for

*Commercial capital, let it then be understood, consists not iħa paper, and is not augmented by the multiplication of this medium of payment. An Inquiry into the Nature and Effects of the Paper Credit of Great Britain; by Henry Thornton. Chap. i.

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"tunes can be accumulated, or, at least, that there "must be a compensation between those that are "accumulated and those which return to circu"lation."*

Adam Smith has been silent on the hoarding of money destined, not destined, not only to distribute the income to all classes of the community, but also to assist the circulation of all the other parts of capital. Are we to attribute his silence to simple omission, or to the inutility or little importance of the subject?

Metallic currency, as we have seen before, is a mere instrument, proper to circulate the produce of labour, whatever this produce may be. Abstracted from this destination, or hoarded, it becomes like a merchandize that is not in commerce; and which, as long as it remains out of it, has no value or use for any one. It is as if it did not exist, as if it were still buried in the bowels of the earth.

When hoarding is the effect of the passion for gold and silver, which is so violent in some individuals, that they sacrifice to it all other interests, it is of little importance with regard to wealth, because it never is attempted to any great extent. All the harm that arises from such hoarding is, that it forces the nation

* Physiocratie, Max. 7.

+ Although money constitutes no part of the capital stock reserved for consumption or revenue, and although Dr. Quesnay has improperly confounded it, I yet thought it my duty to discuss here the question about the hoarding of money, to which his theory of revenue gives rise.

to a larger purchase of precious metals, and occasions it a little more expence.

Hoarding becomes of some importance only when it takes place in consequence of political causes or mal-administration, when the minds of men are uneasy about public affairs, or when their safety and property are threatened. In such cases, the hoarding may be so considerable, that capitals may not be casily or but partially circulated; that, according to Dr. Quesnay's expression, the distribution of part of the annual income of the nation may be paralyzed; that the returns of the advances on cultivation, of the wages of labour, and of the consumption of the dif ferent classes who exercise lucrative trades, may be impeded; and that the re-production of the revenue and taxes may be diminished.* Instances of such hoarding are met with wherever government respects not persons and property, nor causes them to be respected; and in times of political commotions.

Political economy affords no remedies against this calamity.

To substitute a paper currency to the hoarded coin, is impossible; because, wherever the stability of government is threatened, and wherever government either will not, or cannot protect persons and property, there is no public credit.

As the interchange of the produce of labour is the source of wealth, whatever endangers the safety of individuals, the circulation of productions, the return and peaceable enjoyment of equivalents, causes the

* See the preceding note.

metallic currency. to be eagerly sought for by all classes of the community, occasions its being hoarded, and opposes an insurmountable obstacle to that credit which might, to a certain degree, supply its place.

To import precious metals for the purpose of converting them into money, and thus replace the coin that has disappeared from circulation, can be done only at a great expence, and is not of material assistance. The operation can only be cutrusted to merchants, who cannot perform it otherwise than by the exchange of national produce: but commerce is liable to all the chances which occasion the hoarding of coin. Nothing can induce merchants fearing for their property, to import precious metals but the certain prospect of a considerable benefit which is to indemnify them for the risks to which they expose themselves, or afford them, in fraud and corruption, a guarantee which they find not either in the laws or in government. To complete the misfortune; when the newly imported precious metals are circulated in the shape of coin, they do not remain long in circulation; the same motives which caused the old coin to be hoarded, cause the new coin to disappear; the penury continues the same, and the scantiness of circulation dries up every source of wealth.

Against these inconveniencies, the constant attendants of political commotions and bad governments, science loses its power, and all those measures, which political economy disavows, are but juggling tricks or miserable palliatives, which aggravate the evil and delay its cure, or render it impracticable.

Thus capital stock, considered in its three great

divisions, as fixed capital, circulating capital, and capital destined for immediate consumption, provides for the wants of labour, contributes to its progress in proportion to its own increase, and always affords an exact measure of the progress of national wealth.

There is a fourth employment of capital, distinct from those which I have just examined, the nature of which is not yet completely ascertained, neither are its effects certain or sufficiently known; I mean its being lent out at interest either to private individuals or to the public. Authors are not yet agreed respecting either the utility or the disadvantages of this kind of employment of capital.

Dr. Quesnay has considered this subject both with regard to the interest of the capitals thus employed, and the nature of national debts; his observations on these two points are very concise, and rather dogmatical than luminous.

He states that, "if money is lent out at a high rate of interest, it shews that the country has not money enough in proportion to its income, since "the use of it is so dearly paid for.

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"On the other hand, he would have governments "to avoid loans which pay interest, and burthen the "state with all-devouring debts; and in case of extra

ordinary necessities, he would have them to have

recourse to the resources of the nation, and not to "the credit of financiers."*

Adam Smith has carefully and amply discussed the