century. As riches, improvement, and population,
have increased, interest has declined.
The wages of labour do not sink with the profits
of stock. The demand for labour increases
with the increase of stock, whatever be its
profits; and after these are diminished, stock
may not only continue to increase, but to increase
much faster than before. It is with industrious
nations, who are advancing in the
acquisition of riches, as with industrious individuals.
A great stock, though with small
profits, generally increases faster than a small
stock with great profits. Money, says the proverb,
makes money. When you have got a
little, it is often easy to get more. The great
difficulty is to get that little. The connection
between the increase of stock and that of industry,
or of the demand for useful labour,
has partly been explained already, but will be
explained more fully hereafter, in treating of
the accumulation of stock.
The acquisition of new territory, or of new
branches of trade, may sometimes raise the
profits of stock, and with them the interest of
money, even in a country which is fast advancing
in the acquisition of riches. The
stock of the country, not being sufficient for
the whole accession of business which such acquisitions
present to the different people among
whom it is divided, is applied to those particular
branches only which afford the greatest
profit. Part of what had before been employed
in other trades, is necessarily withdrawn
from them, and turned into some of the new
and more profitable ones. In all those old
trades, therefore, the competition comes to be
less than before. The market comes to be
less fully supplied with many different sorts
of goods. Their price necessarily rises more
or less, and yields a greater profit to those who
deal in them, who can, therefore, afford to
borrow at a higher interest. For some time
after the conclusion of the late war, not only
private people of the best credit, but some of
the greatest companies in London, commonly
borrowed at five per cent. who, before that,
had not been used to pay more than four, and
four and a half per cent. The great accession
both of territory and trade by our acquisitions
in North America and the West Indies, will
sufficiently account for this, without supposing
any diminution in the capital stock of the
society. So great an accession of new business
to be carried on by the old stock, must
necessarily have diminished the quantity employed
in a great number of particular branches,
in which the competition being less, the
profits must have been greater. I shall hereafter
have occasion to mention the reasons
which dispose me to believe that the capital
stock of Great Britain was not diminished,
even by the enormous expense of the late war.
The diminution of the capital stock of the
society, or of the funds destined for the maintenance
of industry, however, as it lowers the
wages of labour, so it raises the profits of
stock, and consequently the interest of money.
By the wages of labour being lowered, the
owners of what stock remains in the society
can bring their goods at less expense to market
than before; and less stock being employed
in supplying the market than before, they
can sell them dearer. Their goods cost them
less, and they get more for them. Their profits,
therefore, being augmented at both ends,
can well afford a large interest. The great
fortunes so suddenly and so easily acquired in
Bengal and the other British settlements in
the East Indies, may satisfy us, that as the
wages of labour are very low, so the profits of
stock are very high in those ruined countries.
The interest of money is proportionably so.
In Bengal, money is frequently lent to the
farmers at forty, fifty, and sixty per cent. and
the succeeding crop is mortgaged for the payment.
As the profits which can afford such
an interest must eat up almost the whole rent
of the landlord, so such enormous usury must
in its turn eat up the greater part of those
profits. Before the fall of the Roman republic,
a usury of the same kind seems to have
been common in the provinces, under the ruinous
administration of their proconsuls. The
virtuous Brutus lent money in Cyprus at
eight-and-forty per cent. as we learn from the
letters of Cicero.
In a country which had acquired that full
complement of riches which the nature of its
soil and climate, and its situation with respect
to other countries, allowed it to acquire, which
could, therefore, advance no further, and
which was not going backwards, both the
wages of labour and the profits of stock would
probably be very low. In a country fully
peopled in proportion to what either its territory
could maintain, or its stock employ, the
competition for employment would necessarily
be so great as to reduce the wages of labour
to what was barely sufficient to keep up the
number of labourers, and the country being
already fully peopled, that number could never
be augmented. In a country fully stocked
in proportion to all the business it had to
transact, as great a quantity of stock would
be employed in every particular branch as the
nature and extent of the trade would admit.
The competition, therefore, would everywhere
be as great, and, consequently, the ordinary
profit as low as possible.
But, perhaps, no country has ever yet arrived
at this degree of opulence. China seems
to have been long stationary, and had, probably,
long ago acquired that full complement
of riches which is consistent with the nature
of its laws and institutions. But this complement
may be much inferior to what, with
other laws and institutions, the nature of its
soil, climate, and situation, might admit of.
A country which neglects or despises foreign
commerce, and which admits the vessels of