the country, but that many people want those pieces who have nothing to give for them When the profits of trade happen to be greater than ordinary, over-trading becomes a general error both among great and small dealers. They do not always send more money abroad than usual; but they buy upon credit, both at home and abroad, an unusual quantity of goods, which they send to some distant market, in hopes that the returns will come in before the demand for payment. The demand comes before the returns, and they have nothing at hand with which they can either purchase money, or give solid security for borrowing. It is not any scarcity of gold and silver, but the difficulty which such people find in borrowing, and which their creditors find in getting payment, that occasions the general complaint of the scarcity of money. To attempt to increase the wealth of any country, either by introducing or by 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.-It is not by the importation of gold and silver that the discovery of America has enriched Europe. By the abundance of the American mines, those metals have become cheaper. A service of plate can now be purchased for about a third part of the corn, or a third part of the labour which it would have cost in the fifteenth century. So far Europe has, no doubt, gained a real conveniency, though surely a very trifling one. The cheapness of gold and silver renders those metals rather less fit for the purposes of money than

they were before. In order to make the same purchases, we must load ourselves with a greater quantity of them, and carry about a shilling in our pocket, where a groat would have done before. It is difficult to say which is most trifling, this inconveniency or the opposite conveniency. Neither the one nor the other could have made any very essential change in the state of Europe."

*

Elsewhere Adam Smith states, that "the greater part of the writers who have collected the moneyprices of things in ancient times, seem to have considered the low money-price of corn, and of goods in general, or, in other words, the high value of gold and siver, as a proof not only of the scarcity of those metals, but of the poverty and barbarism of the country at the time when it took place. This notion is connected with the system of political economy, which represents national wealth as consisting in the abundance, and national poverty in the scarcity of gold and silver. I shall only observe, that the high value of the precious metals can be no proof of the poverty or barbarism of any particular country at the time when it took place. It is a proof only of the barrenness of the mines which happened at that time to supply the commercial world. A poor country, as it cannot afford to buy more, so it can as little afford to pay dearer for gold and silver than a rich one; and the value of those metals, therefore, is, not likely to be higher in the former than in the latter. In China, a country much richer than any part

* Wealth of Nations, vol. ii. pages 159, 160, 164, 176, 177.

of Europe, the value of the precious metals is much higher than in any part of Europe. As the wealth of Europe, indeed, has increased greatly since the discovery of the mines of America; so the value of gold and silver has gradually diminished. This diminution of their value, however, has not been owing to the increase of the real wealth of Europe, of the annual produce of its land and labour, but to the accidental discovery of more abundant mines than any that were known before. The increase of the quantity of gold and silver in Europe, and the increase of its manufactures and agriculture, are two events which, though they have happened nearly about the same time, yet have arisen from very different causes, and have scarcely any natural connexion with one another. The one has arisen from a mere accident, in which neither prudence nor policy either had or could have any share; the other from the fall of the feudal system, and from the establishment of a government which afforded to industry the only encouragement which it requires, some tolerable security that it shall enjoy the fruits of its own labour. Poland, where the feudal system still continues to take place, is at this day as beggarly a country as it was before the discovery of America. The money-price of corn, however, has risen; the real value of the precious metals has fallen in Poland in the same manner as in other parts of Europe. Their quantity, therefore, must have increased there as in other places, and nearly in the same proportion to the annual produce of its land and labour. The increase of the quantity of those metals, however, has not, it seems, increased

that of the 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;