earning the first guinea is the greatest obstacle that can be thrown in the way of labour, industry, and commerce. As little as diamonds and precious stones, the trappings of opulence, have ever tempted the ambition of the labouring and industrious classes, or increased the labour and industry of any people, as little would gold and silver, reserved exclusively for the rich, have any influence upon the labouring and industrious classes.

When, on the contrary, a gold and silver currency is so plentiful that, without being depreciated, it gets within the reach of any individual that chooses to labour, the most careless are stimulated by the desire of getting money, and all redouble their efforts to obtain a quantity equal or superior to what is possessed by their equals. Ornaments of gold and silver, the price of which is neither so low that any one might get them, nor so high as to be exclusively reserved for the rich, form one of the most powerful incitements to labour, because they gratify the vanity of the labouring classes. Every production of industry that is within the reach of the least favoured classes, partakes of this property of gold and silver, and it would not be beneath the care of an enlightened government to turn the efforts of industry to cheap commodities rather than to the expensive frivolities of opulence; the progress of riches would be so much the more rapid, and national wealth would receive a new impulse from individual

comforts.

We may, therefore, conclude, with some degree of certainty, that a gold and silver currency is the first and most powerful stimulus to labour, industry, and

wealth; that this stimulus is weaker in proportion as money is scarce and circulates less freely among the labouring classes*, and stronger in proportion as money is plentiful and widely diffused among the labourers.

But whatever importance I may assign to gold and silver, and although I am inclined to believe that their plenty has the greatest influence upon wealth; yet it would not be reasonable to infer, that wealth depends on the fecundity or sterility of gold and silver mines; and that those authors, who considered gold and silver as the only wealth, were not so very wrong. There is a great difference between the two systems; they do not approximate in any respect. According to one system, the precious metals are only means to acquire wealth; according to the other, they are the end, or wealth itself. Vain, therefore, would be the attempt to assimilate them, and to confound one with the other.

In vain does Adam Smith himself observe, "that to attempt to increase the wealth of any country,

* In every kingdom into which money begins to flow in greater abundance than formerly, every thing takes a new face: labour and industry gain life.-Hume's Essays; Edinb. 1804; vol. i. of money, page 303.

+ That an increase of the circulating medium tends to afford temporary encouragement to industry, seems to be proved by the effects of the Mississipi Scheme in France; for it is affirmed by French writers, that the notes of Mr. Law's bank appeared for a time to have a very powerful influence in extending the demand for labour, and in augmenting the visible and bonâ fide property of the kingdom. Mr. Henry Thornton on Paper Credit, page 263.-T.

either by introducing or detaining in it an unnecessary quantity of gold and silver, is as absurd as it would be to attempt to increase the good cheer of private families by obliging them to keep an unnecessary number of kitchen utensils."

The plenty of gold and silver which those wish for who are intimately convinced of their influence upon labour, industry, and commerce, does not extend to a quantity useless to commerce, but simply to the quantity that commerce can employ. One has nothing common with the other; or rather, the assertion is perfectly correct, that if at the first working of the mines of America, the abundance of gold and silver exceeded the wants of labour, industry, and commerce; if it sunk the value of those metals, and had no other effect than to employ a greater quantity of money for the same operations, this excess has long since ceased to exist. The labour, industry, and commerce of nations, have long ago opened so many channels for the precious metals, that they are no longer sufficient for their wants; and it is not unjustly that people complain of the scarcity of money, nor is it without a just cause that governments have resorted to divers measures to prevent the calamities attendant on the scarcity of gold and silver.

Not that, in imitation of some authors who are fascinated by the advantages resulting from the plenty of the precious metals, I imagine it can be obtained by prohibitions, privileges, and other not less disastrous measures: but I entirely concur with those who discover the source of this plenty in foreign commerce,

and who peculiarly recommend that commerce as one of the principal sources of the wealth of modern

nations.*

The example of Poland, Spain, and Portugal, which have not availed themselves of the plenty of gold and silver, and which remained poor in the midst of the prosperity of the other nations of Europe, can be of no weight here. Adam Smith himself ascribes the poverty of those countries to the vices of their governments. They prevented their sharing in the progress of the industry of other nations, which was so powerfully forwarded by the plenty of gold and silver. Their poverty, therefore, does not attest the inefficacy of gold and silver; it only shews how greatly those political writers and practical statesmen err, who fancy that a good economical system is not incompatible with a bad political system; and that a nation may grow rich in despite of the defects of its political institutions. The security of the labourer, the freedom of labour, and the protection of property, contribute more to the growth of wealth than the order, economy, and good use of the stocks which it accumulates. The best governed nation will always be the richest; just as plenty of gold and silver always will be one of the most powerful means of accelerating the progress of labour and industry.

And let it not be supposed that, according to this system, if the gold and silver mines ceased to be productive, general wealth would be arrested in its pro

* D'Avenant, Steuart, Count Ferri, &c.

gress, or, at least, that wealth could not be progressive in one nation without retrograding in the others.

As soon as a metallic currency has given the impulse to general labour, its scarcity may be remedied by credit and banks, and its plenty maintained among the labouring classes; so that it may constantly afford a new aliment to their emulation, activity, and industry. These means are another benefit for which wealth is indebted to the plenty of gold and silver, as I shall endeavour to shew in the following chapter.

Let us, therefore, conclude, that in whatever light we view the question of the plenty or scarcity of metallic currency, its plenty is indispensably necessary to the progress of wealth, and that governments ought to patronize and second, with all their might, whatever can carry the abundance of the precious metals to the highest pitch which it is capable of attaining.

CHAP. IV.

Of Credit and Banks.

CREDIT is to money what money is to the produce of labour when it is exchanged. Just as money supplies the place of one of the exchanged commodities, so credit supplies the place of money. The only dif ference between the two equivalents is, that the equivalent money is real and actual, and the equivalent credit is but temporary and grounded in confidence.