whole mercantile town and the country in its
neighbourhood. Over-trading is the common
cause of it. Sober men, whose projects have
been disproportioned to their capitals, are as
likely to have neither wherewithal to buy money,
nor credit to borrow it, as prodigals,
whose expense has been disproportioned to
their revenue. Before their projects can be
brought to bear, their stock is gone, and
credit with it. They run about everywhere
to borrow money, and everybody tells them
that they have none to lend. Even such general
complaints of the scarcity of money do
not always prove that the usual number of
gold and silver pieces are not circulating in
the country, but that many people want those
pieces who have nothing to give for them.
When the profits of trade happen to be greater
than ordinary over-trading becomes a general
error, both among great and small dealers.
They do not always send more money
abroad than usual, but they buy upon credit,
both at home and abroad, an unusual quantity
of goods, which they send to some distant
market, in hopes that the returns will come in
before the demand for payment. The demand
comes before the returns, and they have nothing
at hand with which they can either purchase
money or give solid security for borrowing.
It is not any scarcity of gold and silver,
but the difficulty which such people find in
borrowing, and which their creditor find in
getting payment, that occasions the general
complaint of the scarcity of money.
It would be too ridiculous to go about seriously
to prove, that wealth does not consist
in money, or in gold and silver; but in what
money purchases, and is valuable only for purchasing.
Money, no doubt, makes always a
part of the national capital; but it has already
been shown that it generally makes but a
small part, and always the most unprofitable
part of it.
It is not because wealth consists more essentially
in money than in goods, that the
merchant finds it generally more easy to buy
goods with money, than to buy money with
goods; but because money is the known and
established instrument of commerce, for which
every thing is readily given in exchange, but
which is not always with equal readiness to
be got in exchange for every thing. The
greater part of goods, besides, are more perishable
than money, and he may frequently
sustain a much greater loss by keeping them.
When his goods are upon hand, too, he is
more liable to such demands for money as he
may not be able to answer, than when he has
got their price in his coffers. Over and above
all this, his profit arises more directly from
selling than from buying; and he is, upon
all these accounts, generally much more anxious
to exchange his goods for money than his
money for goods. But though a particular
merchant, with abundance of goods in his
warehouse, may sometimes be ruined by not
being able to sell them in time, a nation or
country is not liable to the same accident.
The whole capital of a merchant frequently
consists in perishable goods destined for purchasing
money. But it is but a very small
part of the annual produce of the land and labour
of a country, which can ever be destined
for purchasing gold and silver from their
neighbours. The far greater part is circulated
and consumed among themselves; and
even of the surplus which is sent abroad, the
greater part is generally destined for the purchase
of other foreign goods. Though gold
and silver, therefore, could not be had in exchange
for the goods destined to purchase
them, the nation would not be ruined. It
might, indeed, suffer some loss and inconveniency,
and be forced upon some of those expedients
which are necessary for supplying the
place of money. The annual produce of its
land and labour, however, would be the same,
or very nearly the same as usual; because the
same, or very nearly the same consumable capital
would be employed in maintaining it.
And though goods do not always draw money
so readily as money draws goods, in the long-run
they draw it more necessarily than even
it draws them. Goods can serve many other
purposes besides purchasing money, but money
can serve no other purpose besides purchasing
goods. Money, therefore, necessarily
runs after goods, but goods do not always
necessarily run after money. The man who
buys, does not always mean to sell again, but
frequently to use or to consume; whereas he
who sells always means to buy again. The
one may frequently have done the whole, but
the other can never have done more than the
one half of his business. It is not for its
own sake that men desire money, but for the
sake of what they can purchase with it.
Consumable commodities, it is said, are soon
destroyed; whereas gold and silver are of a
the more durable nature, and were it not for this
continual exportation, might be accumulated
for ages together, to the incredible augmentation
of the real wealth of the country. Nothing,
therefore, it is pretended, can be more
disadvantageous to any country, than the trade
which consists in the exchange of such lasting
for such perishable commodities. We do not,
however, reckon that trade disadvantageous,
which consists in the exchange of the hardware
of England for the wines of France,
and yet hardware is a very durable commodity,
and were it not for this continual exportation,
might too be accumulated for ages together,
to the incredible augmentation of the
pots and pans of the country. But it readily
occurs, that the number of such utensils is in
every country necessarily limited by the use
which there is for them; that it would be absurd
to have more pots and pans than were
necessary for cooking the victuals usually consumed