horses, and the maintenance of horses, of land
carriage consequently, or of the greater part
of the inland commerce of the country.
By regulating the money price of all the
other parts of the rude produce of land, it regulates
that of the materials of almost all manufactures;
by regulating the money price of
labour, it regulates that of manufacturing art
and industry; and by regulating both, it regulates
that of the complete manufacture.
The money price of labour, and of every thing
that is the produce, either of land or labour,
must necessarily either rise or fall in proportion
to the money price of corn.
Though in consequence of the bounty,
therefore, the farmer should be enabled to sell
his corn for 4s. the bushel, instead of 3s 6d.
and to pay his landlord a money rent proportionable
to this rise in the money price of his
produce; yet if, in consequence of this rise
in the price of corn, 4s. will purchase no more
home made goods of any other kind than 3s.
6d. would have done before, neither the circumstances
of the farmer, nor those of the
landlord, will be much mended by this
change. The farmer will not be able to cultivate
much better; the landlord will not be able
to live much better. In the purchase of foreign
commodities, this enhancement in the
price of corn may give them some little advantage.
In that of home made commodities,
it can give them none at all. And almost the
whole expense of the farmer, and the far
greater part even of that of the landlord, is in
home made commodities.
That degradation in the value of silver,
which is the effect of the fertility of the mines,
and which operates equally, or very nearly
equally, through the greater part of the commercial
world, is a matter of very little consequence
to any particular country. The consequent
rise of all money prices, though it
does not make those who receive them really
richer, does not make them really poorer. A
service of plate becomes really cheaper, and
every thing else remains precisely of the same
real value as before.
But that degradation in the value of silver,
which, being the effect either of the peculiar
situation or of the political institutions of a
particular country, takes place only in that
country, is a matter of very great consequence,
which, far from tending to make any body
really richer, tends to make every body really
poorer. The rise in the money price of all
commodities, which is in this case peculiar to
that country, tends to discourage more or less
every sort of industry which is carried on within
it, and to enable foreign nations, by furnishing
almost all sorts of goods for a smaller
quantity of silver than its own workmen can
afford to do, to undersell them, not only in
the foreign, but even in the home market.
It is the peculiar situation of Spain and
Portugal, as proprietors of the mines, to be
the distributers of gold and silver to all the
other countries of Europe. Those metals
ought naturally, therefore, to be somewhat
cheaper in Spain and Portugal than in any
other part of Europe. The difference, however,
should be no more than the amount of
the freight and insurance; and, on account of
the great value and small bulk of those metals,
their freight is no great matter, and their insurance
is the same as that of any other goods
of equal value. Spain and Portugal, therefore,
could suffer very little from their peculiar
situation, if they did not aggravate its disadvantages
by their political institutions.
Spain by taxing, and Portugal by prohibiting,
the exportation of gold and silver, load
that exportation with the expense of smuggling,
and raise the value of those metals in
other countries so much more above what it is
in their own, by the whole amount of this expense.
When you dam up a stream of water,
as soon as the dam is full, as much water
must run over the dam-head as if there was
no dam at all. The prohibition of exportation
cannot detain a greater quantity of gold
and silver in Spain and Portugal, than what
they can afford to employ, than what the annual
produce of their land and labour will allow
them to employ, in coin, plate, gilding,
and other ornaments of gold and silver. When
they have got this quantity, the dam is full,
and the whole stream which flows in afterwards
must run over. The annual exportation
of gold and silver from Spain and Portugal,
accordingly, is, by all accounts, notwithstanding
these restraints, very near equal to
the whole annual importation. As the water,
however, must always be deeper behind the
dam-head than before it, so the quantity of gold
and silver which these restraints detain in Spain
and Portugal, must, in proportion to the annual
produce of their land and labour, be greater
than what is to be found in other countries.
The higher and stronger the dam-head, the
greater must be the difference in the depth of
water behind and before it. The higher the tax,
the higher the penalties with which the prohibition
is guarded, the more vigilant and severe
the police which looks after the execution of
the law, the greater must be the difference in
the proportion of gold and silver to the annual
produce of the land and labour of Spain
and Portugal, and to that of other countries.
It is said, accordingly, to be very considerable,
and that you frequently find there a profusion
of plate in houses, where there is nothing else
which would in other countries be thought
suitable or correspondent to this sort of magnificence.
The cheapness of gold and silver,
or, what is the same thing, the dearness of all
commodities, which is the necessary effect of
this redundancy of the precious metals, discourages
both the agriculture and manufactures
of Spain and Portugal, and enables foreign
nations to supply them with many sorts