has wherewithal to buy gold and silver, will
never be in want of those metals. They are
to be bought for a certain price, like all
commodities; and as they are the price of all
other commodities, so all other commodities
are the price of those metals. We trust, with
perfect security, that the freedom of trade,
without any attention of government, will always
supply us with the wine which we have
occasion for; and we may trust, with equal
security, that it will always supply us with all
the gold and silver which we can afford to purchase
or to employ, either in circulating our
commodities or in other uses.
The quantity of every commodity which human
industry can either purchase or produce,
naturally regulates itself in every country according
to the effectual demand, or according
to the demand of those who are willing to pay
the whole rent, labour, and profits, which
must be paid in order to prepare and bring it
to market. But no commodities regulate
themselves more easily or more exactly, according
to this effectual demand, than gold
and silver; because, on account of the small
bulk and great value of those metals, no commodities
can be more easily transported from
one place to another; from the places where they
are cheap, to those where they are dear; from
the places where they exceed, to those where
they fall short of this effectual demand. If there
were in England, for example, an effectual
demand for an additional quantity of gold, a
packet-boat could bring from Lisbon, or from
wherever else it was to be had, fifty tons of
gold, which could be coined into more than
five millions of guineas. But if there were
an effectual demand for grain to the same value,
to import it would require, at five guineas
a-ton, a million of tons of shipping, or a thousand
ships of a thousand tons each. The navy
of England would not be sufficient.
When the quantity of gold and silver imported
into any country exceeds the effectual
demand, no vigilance of government can prevent
their exportation. All the sanguinary
laws of Spain and Portugal are not able to
keep their gold and silver at home. The continual
importations from Peru and Brazil exceed
the effectual demand of those countries,
and sink the price of those metals there below
that in the neighbouring countries. If,
on the contrary, in any particular country,
their quantity fell short of the effectual demand,
so as to raise their price above that of
the neighbouring countries, the government
would have no occasion to take any pains to
import them. If it were even to take pains
to prevent their importation, it would not be
able to effectuate it. Those metals, when the
Spartans had got wherewithal to purchase
them, broke through all the barriers which
the laws of Lycurgus opposed to their entrance
into Lacedæmon. All the sanguinary
laws of the customs are not able to prevent
the importation of the teas of the Dutch and
Gottenburg East India companies; because
somewhat cheaper than those of the British
company. A pound of tea, however, is about
a hundred times the bulk of one of the highest
prices, sixteen shillings, that is commonly
paid for it in silver, and more than two thousand
times the bulk of the same price in gold,
and, consequently, just so many times more
difficult to smuggle.
It is partly owing to the easy transportation
of gold and silver, from the places where
they abound to those where they are wanted,
that the price of those metals does not fluctuate
continually, like that of the greater part
of other commodities, which are hindered by
their bulk from shifting their situation, when
the market happens to be either over or understocked
with them. The price of those metals,
indeed, is not altogether exempted from
variation; but the changes to which it is liable
are generally slow, gradual, and uniform. In
Europe, for example, it is supposed, without
much foundation, perhaps, that during the
course of the present and preceding century,
they have been constantly, but gradually, sinking
in their value, on account of the continual
importations from the Spanish West Indies.
But to make any sudden change in the price
of gold and silver, so as to raise or lower at
once, sensibly and remarkably, the money
price of all other commodities, requires such
a revolution in commerce as that occasioned
by the discovery of America.
If, notwithstanding all this, gold and silver
should at any time fall short in a country
which has wherewithal to purchase them, there
are more expedients for supplying their place,
than that of almost any other commodity. If
the materials of manufacture are wanted, industry
must stop. If provisions are wanted,
the people must starve. But if money is
wanted, barter will supply its place, though
with a good deal of inconveniency. Buying and
selling upon credit, and the different dealers
compensating their credits with one another,
once a-month, or once a-year, will supply it
with less inconveniency. A well-regulated
paper-money will supply it not only without
any inconveniency, but, in some cases, with
some advantage. Upon every account, therefore,
the attention of government never was
so unnecessarily employed, as when directed
to watch over the preservation or increase of
the quantity of money in any country.
No complaint, however, is more common
than that of a scarcity of money. Money, like
wine, must always be scarce with those who
have neither wherewithal to buy it, nor credit
to borrow it. Those who have either, will
seldom be in want either of the money, or of
the wine which they have occasion for. This
complaint, however, of the scarcity of money,
is not always confined to improvident spendthrifts.
It is sometimes general through a