borrow, because there is neither industry nor commerce in the country.

To this observation of Swift's it might be added, that the case is exactly the same with a mere agricultural nation, whose industry has made little progress, and whose commerce is confined to the hometrade; or even with a flourishing nation, the industry of which is stopped, and which is deprived of its foreign trade by extraordinary and prolonged circumstances. Surely, under these different suppositions, the rate of interest might be very low, and wealth yet be on the decline.

It is therefore without any foundation that a low rate of interest has hitherto been ranked among the signs that indicate the progressive, stationary, or retrograde condition of national wealth; this criterion is imperfect, insufficient, and incapable of affording any correct information. The signs which we have pointed out are also merely conjectural; yet they may lead to truth.

CHAP. X.

Conclusion of the Fourth Book.

THE circulation of the produce of labour effected by commerce has its principle in the passion for enjoyment, which men gratify by interchanging the produce of their labour, industry, talents, knowledge, and genius. This circulation is more productive in proportion as it is less confined, more extensive, and more general. When it extends only from the country to the neighbouring towns, and from the towns to the country, it is slow weak, and languid, because the produce which it offers to the consumers is calculated only for the most ordinary wants of life. It gains in animation, activity, and usefulness, when it pervades every district, every town, every city, and the metropolis of every country, because it then circulates productions more numerous, more various, better calculated for the conveniency, comforts, and peculiar enjoyments of every country. It attains the highest pitch of grandeur and power, when in its course it embraces all climates, all countries, and all nations, because it then distributes to every consumer the produce of all soils, the productions of all kinds of industry, all the riches of nature and labour, and excites every desire, flatters every taste, and gratifies every caprice and every fancy.

Commerce, in its various stages, bestows upon the

different produce of labour a value constantly relative to the demand of the consumers and to the abundance or scarcity of the commodity. This value is always proportioned to the extent of the commerce, to the number of consumers, and to the variety of productions: but in fixing this value, which is sometimes uncertain and frequently arbitrary, cominerce generally gives to every producer the equivalent of what his production has cost him. Were this indispensable condition not fulfilled, re-production would be at a stand, and circulation would lose its activity, and perhaps entirely cease. This condition once per

formed, commerce observes no other law in the distribution of equivalents, but the demand for and the abundance or scarcity of the commodity: and this law is always fluctuating, always uncertain, and consequently always unequal. But this inequality obstructs neither the activity nor the range of the circulation; it only affects the rate of profits; and a small profit is always preferable to none.

Notwithstanding these advantages and the general interest which it must inspire, the circulation of the produce of labour would have met with but an indifferent success, had it not been for the assistance of a preferred produce, which every producer willingly takes at all times in exchange for its produce, because he is certain that the partiality or predilection which he entertains for that produce is common to the producers of all countries.

When money has that indispensable and necessary character; when it consists in a produce universally preferred, and for which all other productions are

willingly exchanged; when public authority contents itself with guaranteeing, as it were, this preferred commodity against the frauds, adulterations, and deteriorations to which it may be liable, money be-. comes the most active agent, the most powerful spring, and the most useful instrument of circulation.

But it is especially by giving rise to credit that metallic money renders the greatest service to circulation. As soon as it has established credit metallic money appears in circulation merely to regulate the march and to insure the results of credit. Even the liquidation of credit is frequently effected without the aid of metallic money. Banks, when confined to the liquidation of commercial credit, supply the place of coin most successfully, or at least derive but a feeble and trifling assistance from the metallic currency of the country.

The different methods of circulating the produce of labour, such as corporations and privileged companies, the monopoly of colonial commerce, exclusive commercial treaties, and every combination that has been contrived to give another direction to the course of commerce, when it is supposed unfavourable or less beneficial, or to enlarge it when supposed to be favourable, are as many obstacles which restrict and shackle the progress of commerce, and are equally fatal to public and private wealth.

In short, nations ought never to forget that the circulation of the produce of labour is always beneficial, and that the only way to reap all its benefits is to render commerce safe, free, easy, and general.

BOOK V.

ON THE VARIOUS SYSTEMS CONCERNING THE
NATIONAL INCOME AND CONSUMPTION.

CHAP. I.

Of the National Income.

ALL systems of political economy agree in making the national income consist in the produce of annual labour. The spontaneous productions of the soil, of mines, and of the waters, are not very considerable, and require besides a certain portion of labour to be gathered and brought to market; they must, of course, be ranked among the produce of labour.

Income is either private or public. But these two denominations are merely two different manners of viewing income; they neither alter its nature nor its quantity. All authors on subjects connected with political economy, unanimously teach, that the national income is composed of the private income of the members of the nation.*

* Sir William Petty-George King-Mr. Hooke-Sir William Pulteney-Adam Smith-Dr. Beeke--Physiocratie, page 113.Philosophie Rurale, page 150.