III. have afterwards the courage to reform, till ruin C H A P. and bankruptcy oblige them. But if a perfon has at any time, been at too great an expence in building, in furniture, in books or pictures, no imprudence can be inferred from his changing his conduct. These are things in which further expence is frequently rendered unneceffary by former expence; and when a person stops fhort, he appears to do fo, not because he has exceeded his fortune, but because he has fatisfied his fancy. The expence, befides, that is laid out in durable commodities, gives maintenance, commonly, to a greater number of people, than that which is employed in the most profuse hospitality. Of two or three hundred weight of provifions, which may fometimes be ferved up at a great festival, one-half, perhaps, is thrown to the dunghill, and there is always a great deal wafted and abufed. But if the expence of this entertainment had been employed in setting to work masons, carpenters, upholsterers, mechanics, &c. a quantity of provifions, of equal value, would have been diftributed among a ftill greater number of people, who would have bought them in penny-worths and pound weights, and not have loft or thrown away a fingle ounce of them. In the one way, befides, this expence maintains productive, in the other unproductive hands. In the one way, therefore, it increases, in the other, it does not increase, the exchangeable value of the annual produce of the land and labour of the country. I would II. BOOK. I would not, however, by all this be understood to mean, that the one fpecies of expence always betokens a more liberal or generous fpirit than the other. When a man of fortune fpends his revenue chiefly in hofpitality, he shares the greater part of it with his friends and companions; but when he employs it in purchafing fuch durable commodities, he often spends the whole upon his own perfon, and gives nothing to any body without an equivalent. The latter fpecies of expence, therefore, especially when directed towards frivolous objects, the little ornaments of drefs and furniture,jewels, trinkets, gewgaws, frequently indicates, not only a trifling, but a base and selfish disposition. All that I mean is, that the one fort of expence, as it always occafions fome accumulation of valuable commodities, as it is more favourable to private frugality, and, confequently, to the increase of the public capital, and as it maintains productive, rather than unproductive hands, conduces more than the other to the growth of public opulence. CHAP. THE CHAP. IV. Of Stock lent at Intereft. IV. HE ftock which is lent at intereft is always C H ÁP. confidered as a capital by the lender. He expects that in due time it is to be reftored to him, and that in the mean time the borrower is to pay him a certain annual rent for the use of it. The borrower may use it either as a capital, or as a stock referved for immediate confumption. If he uses it as a capital, he employs it in the maintenance of productive labourers, who reproduce the value with a profit. He can, in this cafe, both restore the capital and pay the intereft without alienating or encroaching upon any other fource of revenue. If he ufes it as a stock referved for immediate confumption, he acts the part of a prodigal, and diffipates in the maintenance of the idle, what was deftined for the fupport of the induftrious. He can, in this cafe, neither restore the capital nor pay the intereft, without either alienating or encroaching upon fome other fource of revenue, fuch as the property or the rent of land. The stock which is lent at intereft is, no doubt, occafionally employed in both thefe ways, but in the former much more frequently than in the latter. The man who borrows in order to spend will foon be ruined, and he who lends to him will generally have occafion to repent of his VOL. III. D folly. L II. BOOK folly. To borrow or to lend for fuch a purpose, therefore, is in all cafes, where grofs ufury is out of the question, contrary to the interest of both parties; and though it no doubt happens fometimes that people do both the one and the other; yet, from the regard that all men have for their own intereft, we may be affured, that it cannot happen fo very frequently as we are fometimes apt to imagine. Afk any rich man of common prudence, to which of the two forts of people he has lent the greater part of his stock, to those who, he thinks, will employ it profitably, or to thofe who will spend it idly, and he will laugh at you for propofing the question. Even among borrowers, therefore, not the people in the world most famous for frugality, the number of the frugal and industrious furpaffes confiderably that of the prodigal and idle. The only people to whom stock is commonly lent, without their being expected to make any very profitable use of it, are country gentlemen who borrow upon mortgage. Even they fcarce ever borrow merely to fpend. What they borrow, one may fay, is commonly spent before they borrow it. They have generally confumed fo great a quantity of goods, advanced to them upon credit by fhopkeepers and tradefinen, that they find it neceffary to borrow at intereft in order to pay the debt. The capital borrowed replaces the capitals of those shopkeepers and tradesmen, which the country gentlemen could not have replaced from the rents of their estates. It is not properly borrowed in order to be spent, but in order order to replace a capital which had been spent c HAP. before. Almoft all loans at intereft are made in money, either of paper, or of gold and filver. But what the borrower really wants, and what the lender really fupplies him with, is not the money, but the money's worth, or the goods which it can purchase. If he wants it as a stock for immediate confumption, it is thofe goods only which he can place in that stock. If he wants it as a capital for employing industry, it is from thofe goods only that the industrious can be furnished with the tools, materials, and maintenance, neceffary for carrying on their work. By means of the loan, the lender, as it were, affigns to the borrower his right to a certain portion of the annual produce of the land and labour of the country, to be employed as the borrower pleases. The quantity of ftock, therefore, or, as it is commonly expreffed, of money which can be lent at interest in any country, is not regulated by the value of the money, whether paper or coin, which ferves as the inftrument of the different loans made in that country, but by the value of that part of the annual produce which, as foon as it comes either from the ground, or from the hands of the productive labourers, is destined not only for re placing a capital, but fuch a capital as the owner does not care to be at the trouble of employing himself. As fuch capitals are commonly lent out and paid back in money, they conftitute what is called the monied intereft. It is diftinct, not only from the landed, but from the trading and D 2 1 manu IV. |