. annual produce; it has neither improved the manufactures and agriculture of the country, nor mended the circumstances of its inhabitants. Spain and Portugal, the countries which possess the mines, are, after Poland, perhaps, the two most beggarly countries in Europe. The value of the precious metals, however, must be lower in Spain and Portugal, than in any other part of Europe as they come from those countries to all other parts of Europe, loaded, not only with a freight and an insurance, but with the expence of smuggling; their exportation being either prohibited or subjected to a duty. In proportion to the annual produce of the land and labour, therefore, their quantity must be greater in those countries than in any other part of Europe; those countries, however, are poorer than the greater part of Europe. Though the feudal system has been abolished in Spain and Portugal, it has not been succeeded by a much better. As the low value of gold and silver, therefore, is no proof of the wealth and flourishing state of the country where it takes place; so neither is their high value, or the low money-price, either of goods in general, or of corn in particular, any proof of its poverty and barbarism." *

I have connected and brought under one point of view the scattered parts of the doctrine of Adam Smith concerning the plenty or scarcity of gold and silver, their proportion to labour and industry, and their co-operation in the progress of public and private wealth, in order to view at once all the arguments by

* Wealth of Nations, vol. i. pages 387, 388, 389.

which he supports his opinions, and to compare them with the motives that induce me to doubt the accuracy of his doctrine.

And to rivet the attention of the reader to this subject, I must add, that the truth of the system of political economy of Adam Smith rests mostly upon the truth or fallacy of this particular doctrine, and that if they do not support, they necessarily destroy each other.

His system indeed is this.—If the natural order of things had not been deranged by the combinations of governments, wealth would have been indebted for its first elements to agriculture; the industry of the towns would have arisen from the accumulation of the agricultural produce; the home-trade would have derived its first capitals from the surplus stock of the produce of agriculture and manufactures; and afterwards foreign trade would have grown out of the superabundance of the home-trade.

According to this system, gold and silver, which in countries that have no mines can only be obtained by foreign trade, are quite useless to the formation, progress, and increase of wealth; and Adam Smith could not but consider their plenty or scarcity as indifferent in themselves, and as destitute of any influence upon the wealth of modern nations.

But whereupon does this system rest? Where are its proofs and how can we suppose, that a country may prosper, flourish, and grow wealthy, without the assistance of gold and silver converted into money? Adam Smith appears perfectly convinced, that their plenty or scarcity are of no importance to wealth;

but he did not go so far as to say that they were of no utility, and that nations might grow rich without their assistance. It is however difficult to separate the two ideas; and if it were clearly demonstrated, that nations cannot arrive at wealth but by means of gold and silver, it could not easily be supposed that their plenty or scarcity has no influence upon wealth. Let us therefore first inquire, whether the wealth of nations is entirely independent of gold and silver, or how far it depends upon these metals?

Before gold or siver coin is introduced in any country. exchanges are made in material commodities, but not beyond the place where they are produced. The surplus of agricultural produce is carried to the next town, and the produce of the industry of the town is consumed in the neighbouring hamlets or villages.

The home-trade does not go beyond each town and its district; it has neither motives nor means to leave. this narrow sphere, to look at a distance for a more advantageous sale of its commodities, and of course it never exceeds the ordinary wants of the country. In such a state of things desires are confined within wants, and to labour to satisfy them is the limit of the efforts and ambition of all.*

* Three things, says Genorcsi, have led mankind to commerce ; the natural love of self-preservation, the desire of the conveniencies of life and wealth, and the pleasures of luxury. The first produces but a rare and scanty commerce, because necessaries are generally furnished by the country, and foreign countries contribute very little to the supply of wants of that kind. The second produces a little more commerce, because the number and variety of conve niencies are great, and cannot all be produced by the same soil,

Should people even succeed in creating a local money of the nature of those enumerated by Adam Smith, such money would not impart great activity to the circulation of productions, and would not extend commercial relations very far.

Brittle or

perishable, of difficult or expensive conveyance, destitute of any particular or general attraction, it would be little sought for, and could content neither indivi dual avarice nor national ambition. Consequently

it would leave things in the state in which they were before its existence, and it is difficult to conceive how they could be mended with its assistance.

This theory is fully confirmed by history. The hordes and tribes of savages discovered in the interior of Africa and in some parts of Asia and America, that were destitute of gold and silver coins, though they had other money, were yet plunged into extreme indigence and misery, and all accounts of travels and voyages afford scarcely a single exception to this general fact.

But no sooner are gold and silver introduced in any country, than the wish of possessing them excites the desires of the inhabitants, sets labour, industry and commerce in motion, and developes the energies,

The third is the cause of an infinite commerce, because pleasures and luxury have no end.

The internal trade, or circulation, (says Mengotti in his Essay on the Commerce of the Romans, which was crowned by the Academy of Sciences at Paris in 1789,) must have been slow and extremely languid without the impulse of gold and silver coin, which is the soul of industry and commerce.

+ Wealth of Nations, vol. i. book i, chap. 4.

faculties, and talents of every individual member of the nation. The incorruptibility of the finer metals, their divisibility, the facility with which they may be kept and concealed from all eyes, or displayed and conveyed any where, with the certainty of procuring by their means any desirable commodity or enjoyment, cause them to be sought for; and the desires which they inspire are unlimited, because imagination magnifies the gratifications which gold and silver are able to purchase.

It therefore appears certain, that gold and silver are necessary to the formation of wealth, and that without them wealth cannot possibly exist.*

Their necessity being thus demonstrated, it follows evidently that their plenty or scarcity cannot be indifferent to the progress of wealth. Their scarcity causes them to be hoarded, concentrated among a small number of individuals, and renders them as it were strangers to the generality of the people. To the classes that cannot partake of them it is as if they were not; they have of course no influence upon their labour, industry, and talents. Some one has observed, very justly in my opinion, that the first guinea is more difficult to earn than the second million; and I think I am not mistaken, when I add that the difficulty of

*Money, in a word, is the most universal incitement, iron the most powerful instrument of human industry; and it is very difficult to conceive by what means a people, neither actuated by the one, nor seconded by the other, could emerge from the grossest barbarism. Gibbon's Decline and Fall of the Roman Empire, chap. ix.