of great value. In the British coin, indeed,
the value of the gold preponderates greatly,
but it is not so in that of all countries. In
the coin of some countries, the value of the
two metals is nearly equal. In the Scotch
coin, before the union with England, the
gold preponderated very little, though it did
somewhat[21], as it appears by the accounts
of the mint. In the coin of many countries
the silver preponderates. In France, the largest
sums are commonly paid in that metal,
and it in there difficult to get more gold than
what is necessary to carry about in your pocket.
The superior value, however, of the silver
plate above that of the gold, which takes
place in all countries, will much more than
compensate the preponderancy of the gold
coin above the silver, which takes place only
in some countries.
Though, in one sense of the word, silver
always has been, and probably always will be,
much cheaper than gold; yet, in another sense,
gold may perhaps, in the present state of the
Spanish market, be said to be somewhat cheaper
than silver. A commodity may be said to
be dear or cheap not only according to the
absolute greatness or smallness of its usual
price, but according as that price is more or
less above the lowest for which it is possible
to bring it to market for any considerable time
together. This lowest price is that which
barely replaces, with a moderate profit, the
stock which must be employed in bringing of
the commodity thither. It is the price which
affords nothing to the landlord, of which rent
makes not any component part, but which resolves
itself altogether into wages and profit.
But, in the present state of the Spanish market,
gold is certainly somewhat nearer to this
lowest price than silver. The tax of the king
of Spain upon gold is only one-twentieth part
of the standard metal, or five per cent.; whereas
his tax upon silver amounts to one-tenth
part of it, or to ten per cent. In these taxes,
too, it has already been observed, consists the
whole rent of the greater part of the gold and
silver mines of Spanish America; and that
upon gold is still worse paid than that upon
silver. The profits of the undertakers of gold
mines, too, as they more rarely make a fortune,
must, in general, be still more moderate
than those of the undertakers of silver
mines. The price of Spanish gold, therefore,
as it affords both less rent and less profit,
must, in the Spanish market, be somewhat
nearer to the lowest price for which it is possible
to bring it thither, than the price of
Spanish silver. When all expenses are computed,
the whole quantity of the one metal, it
would seem, cannot, in the Spanish market,
be disposed of so advantageously as the whole
quantity of the other. The tax, indeed, of
the king of Portugal upon the gold of the
Brazils, is the same with the ancient tax of
the king of Spain upon the silver of Mexico
and Peru; or one-fifth part of the standard
metal. It may therefore be uncertain, whether,
to the general market of Europe, the
whole mass of American gold comes at a price
nearer to the lowest for which it is possible to
bring it thither, than the whole mass of American
silver.
The price of diamonds and other precious
stones may, perhaps, be still nearer to the lowest
price at which it is possible to bring them
to market, than even the price of gold.
Though it is not very probable that any
part of a tax, which is not only imposed upon
one of the most proper subjects of taxation, a
mere luxury and superfluity, but which affords
so very important a revenue as the tax upon
silver, will ever be given up us long as it is
possible to pay it; yet the same impossibility
of paying it, which, in 1736, made it necessary
to reduce it from one-fifth to one-tenth,
may in time make it necessary to reduce it
still further; in the same manner as it made
it necessary to reduce the tax upon gold to
one-twentieth. That the silver mines of Spanish
America, like all other mines, become
gradually more expensive in the working, on
account of the greater depths at which it is
necessary to carry on the works, and of the
greater expense of drawing out the water, and
of supplying them with fresh air at those
depths, is acknowledged by every body who
has inquired into the state of those mines.
These causes, which are equivalent to a
growing scarcity of silver (for a commodity
may be said to grow scarcer when it becomes
more difficult and expensive to collect a certain
quantity of it), must, in time, produce
one or other of the three following events:
The increase of the expense must either, first,
be compensated altogether by a proportionable
increase in the price of the metal; or, secondly,
it must be compensated altogether by a proportionable
diminution of the tax upon silver;
or thirdly, it must be compensated partly by
the one and partly by the other of those two
expedients. This third event is very possible.
As gold rose in its price in proportion to silver,
notwithstanding a great diminution of
the tax upon gold, so silver might rise in its
price in proportion to labour and commodities,
notwithstanding an equal diminution of
the tax upon silver.
Such successive reductions of the tax, however,
though they may not prevent altogether,
must certainly retard, more or less, the rise
of the value of silver in the European market.
In consequence of such reductions, many
mines may be wrought which could not be
wrought before, because they could not afford
to pay the old tax; and the quantity of silver
annually brought to market, must always be
somewhat greater, and, therefore, the value