to their natural rates, the wages of the labour,
the profits of the stock, and the rent of
the land, which must be paid in order to bring
it from the mine to the market. In the greater
part of the silver mines of Peru, the tax of
the king of Spain, amounting to a tenth of the
gross produce, eats up, it has already been observed,
the whole rent of the land. This tax
was originally a half; it soon afterwards fell
to a third, then to a fifth, and at last to a
tenth, at which rate it still continues. In the
greater part of the silver mines of Peru, this,
it seems, is all that remains, after replacing
the stock of the undertaker of the work, together
with its ordinary profits; and it seems
to be universally acknowledged that these profits,
which were once very high, are now as
low as they can well be, consistently with carrying
on the works.
The tax of the king of Spain was reduced
to a fifth of the registered silver in 1504[19],
one-and-forty years before 1545, the date of the
the discovery of the mines of Potosi. In the
course of ninety years, or before 1636, these
mines, the most fertile in all America, had
time sufficient to produce their full effect, or
to reduce the value of silver in the European
market as low as it could well fall, while it
continued to pay this tax to the king of Spain.
Ninety years is time sufficient to reduce any
commodity, of which there is no monopoly,
to its natural price, or to the lowest price at
which, while it pays a particular tax, it can
continue to be sold for any considerable time
together.
The price of silver in the European market
might, perhaps, have fallen still lower, and it
might have become necessary either to reduce
the tax upon it, not only to one-tenth, as in
1736, but to one twentieth, in the same manner
as that upon gold, or to give up working
the greater part of the American mines which
are now wrought. The gradual increase of
the demand for silver, or the gradual enlargement
of the market for the produce of the
silver mines of America, is probably the cause
which has prevented this from happening, and
which has not only kept up the value of silver
in the European market, but has perhaps even
raised it somewhat higher than it was about
the middle of the last century.
Since the first discovery of America, the
market for the produce of its silver mines has
been growing gradually more and more extensive.
First, the market of Europe has become
gradually more and more extensive. Since
the discovery of America, the greater part of
Europe has been much improved. England,
Holland, France, and Germany; even Sweden,
Denmark, and Russia, have all advanced
considerably, both in agriculture and in manufactures.
Italy seems not to have gone
backwards. The fall of Italy preceded the
conquest of Peru. Since that time it seems
rather to have recovered a little. Spain and
Portugal, indeed, are supposed to have gone
backwards. Portugal, however, is but a very
small part of Europe, and the declension of
Spain is not, perhaps, so great as is commonly
imagined. In the beginning of the sixteenth
century, Spain was a very poor country, even
in comparison with France, which has been
so much improved since that time. It was
the well known remark of the emperor Charles
V. who had travelled so frequently through
both countries, that every thing abounded in
France, but that every thing was wanting in
Spain. The increasing produce of the agriculture
and manufactures of Europe must
necessarily have required a gradual increase
in the quantity of silver coin to circulate it;
and the increasing number of wealthy individuals
must have required the like increase in
the quantity of their plate and other ornaments
of silver.
Secondly, America is itself a new market,
for the produce of its own silver mines;
and as its advances in agriculture, industry,
and population, are much more rapid than
those of the most thriving countries in Europe,
its demand must increase much more
rapidly. The English colonies are altogether
a new market, which, partly for coin, and
partly for plate, requires a continual augmenting
supply of silver through a great continent
where there never was any demand before.
The greater part, too, of the Spanish
and Portuguese colonies, are altogether new
markets. New Granada, the Yucatan, Paraguay,
and the Brazils, were, before discovered
by the Europeans, inhabited by savage nations,
who had neither arts nor agriculture.
A considerable degree of both has now been
introduced into all of them. Even Mexico
and Peru, though they cannot be considered
as altogether new markets, are certainly much
more extensive ones than they ever were before.
After all the wonderful tales which
have been published concerning the splendid
state of those countries in ancient times, whoever
reads, with any degree of sober judgment,
the history of their first discovery and
conquest, will evidently discern that, in arts,
agriculture, and commerce, their inhabitants
were much more ignorant than the Tartars of
the Ukraine are at present. Even the Peruvians,
the more civilized nation of the two,
though they made use of gold and silver as
ornaments, had no coined money of any kind.
Their whole commerce was carried on by barter,
and there was accordingly scarce any division
of labour among them. Those who
cultivated the ground, were obliged to build
their own houses, to make their own household
furniture, their own clothes, shoes, and
instruments of agriculture. The few artificers
among them are said to have been all maintained