he is likely to sell them. Half an ounce of
silver at Canton in China may command a
greater quantity both of labour and of the necessaries
and conveniencies of life, than an
ounce at London. A commodity, therefore,
which sells for half an ounce of silver at Canton,
may there be really dearer, of more real
importance to the man who possesses it there,
than a commodity which sells for an ounce at
London is to the man who possesses it at
London. If a London merchant, however,
can buy at Canton, for half an ounce of silver,
a commodity which he can afterwards
sell at London for an ounce, he gains a hundred
per cent. by the bargain, just as much as
if an ounce of silver was at London exactly of
the same value as at Canton. It is of no importance
to him that half an ounce of silver at
Canton would have given him the command
of more labour, and of a greater quantity of
the necessaries and conveniencies of life than
an ounce can do at London. An ounce at
London will always give him the command
of double the quantity of all these, which half
an ounce could have done there, and this is
precisely what he wants.
As it is the nominal or money price of
goods, therefore, which finally determines the
prudence or imprudence of all purchases and
sales, and thereby regulates almost the whole
business of common life in which price is concerned,
we cannot wonder that it should have
been so much more attended to than the real
price.
In such a work as this, however, it may
sometimes be of use to compare the different
real values of a particular commodity at different
times and places, or the different degrees
of power over the labour of other people
which it may, upon different occasions,
have given to those who possessed it. We
must in this case compare, not so much the
different quantities of silver for which it was
commonly sold, as the different quantities of
labour which those different quantities of silver
could have purchased. But the current
prices of labour, at distant times and places,
can scarce ever be known with any degree of
exactness. Those of corn, though they have
in few places been regularly recorded, are in
general better known, and have been more
frequently taken notice of by historians and
other writers. We must generally, therefore,
content ourselves with them, not as being always
exactly in the same proportion as the
current prices of labour, but as being the
nearest approximation which can commonly
be had to that proportion. I shall hereafter
have occasion to make several comparisons of
this kind.
In the progress of industry, commercial
nations have found it convenient to coin several
different metals into money; gold for
larger payments, silver for purchases of moderate
value, and copper, or some other coarse
metal, for those of still smaller consideration.
They have always, however, considered one of
those metals as more peculiarly the measure
of value than any of the other two; and this
preference seems generally to have been given
to the metal which they happen first to make
use of as the instrument of commerce. Having
once begun to use it as their standard,
which they must have done when they had no
other money, they have generally continued
to do so even when the necessity was not the
same.
The Romans are said to have had nothing
but copper money till within five years before
the first Punic war[7], when they first began
to coin silver. Copper, therefore, appears
to have continued always the measure
of value in that republic. At Rome all accounts
appear to have been kept, and the
value of all estates to have been computed,
either in asses or in sestertii. The as was always
the denomination of a copper coin.
The word sestertius signifies two asses and a
half. Though the sestertius, therefore, was
originally a silver coin, its value was estimated
in copper. At Rome, one who owed a
great deal of money was said to have a great
deal of other people's copper.
The northern nations who established themselves
upon the ruins of the Roman empire,
seem to have had silver money from the first
beginning of their settlements, and not to
have known either gold or copper coins for
several ages thereafter. There were silver
coins in England in the time of the Saxons;
but there was little gold coined till the time
of of Edward III. nor any copper till that of
James I. of Great Britain. In England,
therefore, and for the same reason, I believe,
in all other modern nations of Europe, all
accounts are kept, and the value of all goods
and of all estates is generally computed, in
silver: and when we mean to express the
amount of a person's fortune, we seldom mention
the number of guineas, but the number
of pounds sterling which we suppose would
be given for it.
Originally, in all countries, I believe, a legal
tender of payment could be made only in
the coin of that metal which was peculiarly
considered as the standard or measure of
value. In England, gold was not considered
as a legal tender for a long time after it was
coined into money. The proportion between
the values of gold and silver money was not
fixed by any public law or proclamation, but
was left to be settled by the market. If a
debtor offered payment in gold, the creditor
might either reject such payment altogether,
or accept of it at such a valuation of the gold
as he and his debtor could agree upon.
Copper is not at present a legal tender, except
in the change of the smaller silver coins.
In this state of things, the distinction between