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mint price. Since that reformation, the mar-rendered the demand for silver bullion greater ket price has been constantly below the mint than the demand for silver coin. price. But that market price is the same number of people who want silver coin for the whether it is paid in gold or in silver coin. common uses of buying and selling at home, The late reformation of the gold coin, there is surely much greater than that of those who fore, has raised not only the value of the gold want silver bullion either for the use of expor coin, but likewise that of the silver coin in tation or for any other use. There subsists at proportion to gold bullion, and probably, too, present a like permission of exporting gold bulin proportion to all other commodities; though lion, and a like prohibition of exporting gold the price of the greater part of other commo- coin; and yet the price of gold bullion bas dities being influenced by so many other fallen below the mint price. But in the Engcauses, the rise in the value of either gold olish coin, silver was then, in the same manner silver coin in proportion to them may not be as now, under-rated in proportion to gold; so distinct and sensible, and the gold coin (which at that time, too, In the English mint, a pound weight of was not supposed to require any reformation) standard silver bullion is coined into sixty-two regulated then, as well as now, the real value shillings, containing, in the same manner, a of the whole coin. As the reformation of the pound weight of standard silver. Five shil-silver coin did not then reduce the price of lings and twopence an ounce, therefore, is said silver bullion to the mint price, it is not very to be the mint price of silver in England, or probable that a like reformation will do s the quantity of silver coin which the mint now. gives in return for standard silver bullion. Were the silver coin brought back as near Before the reformation of the gold coin, the to its standard weight as the gold, a guinea, market price of standard silver bullion was, it is probable, would, according to the present upon different occasions, five shillings and proportion, exchange for more silver in coin fourpence, five shillings and fivepence, five than it would purchase in bullion. The silver shillings and sixpence, five shillings and seven- coin containing its full standard weight, there pence, and very often five shillings and eight-would in this case, be a profit in melting it Five shillings and seven-down, in order, first to sell the bullion for pence an ounce. pence, however, seems to have been the most gold coin, and afterwards to exchange this common price. Since the reformation of the gold coin for silver coin, to be melted down gold coin, the market price of standard silver in the same manner. Some alteration in the bullion has fallen occasionally to five shillings present proportion seems to be the only method and threepence, five shillings and fourpence, of preventing this inconveniency. and five shillings and fivepence an ounce, The inconveniency, perhaps, would be less, which last price it has scarce ever exceeded. if silver was rated in the coin as much above Though the market price of silver bullion has its proper proportion to gold as it is at present fallen considerably since the reformation of rated below it, provided it was at the same time the gold coin, it has not fallen so low as the enacted, that silver should not be a legal tenmint price. der for more than the change of a guinea, in In the proportion between the different met- the same manner as copper is not a legal tenals in the English coin, as copper is rated very der for more than the change of a shilling. much above its real value, so silver is rated No creditor could, in this case, be cheated in somewhat below it. In the market of Europe, consequence of the high valuation of silver in in the French coin and in the Dutch coin, an coin; as no creditor can at present be cheated ounce of fine gold exchanges for about four-in consequence of the high valuation of cop teen ounces of fine silver. In the English per. The bankers only would suffer by this coin, it exchanges for about fifteen ounces, regulation. When a run comes upon them, that is, for more silver than it is worth, ac- they sometimes endeavour to gain time, by cording to the common estimation of Europe. paying in sixpences, and they would be preBut as the price of copper in bars is not, even cluded by this regulation from this discredit in England, raised by the high price of cop-able method of evading immediate payment. per in English coin, so the price of silver in They would be obliged, in consequence, to bullion is not sunk by the low rate of silver keep at all times in their coffers a greater in English coin. Silver in bullion still pre-quantity of cash than at present; and though serves its proper proportion to gold, for the this might, no doubt, be a considerable inconsame reason that copper in bars preserves its veniency to them, it would, at the same time, proper proportion to silver. be a considerable security to their creditors. Upon the reformation of the silver coin, in Three pounds seventeen shillings and ten. the reign of William III., the price of silver pence halfpenny (the mint price of gold) cer bullion still continued to be somewhat above tairly does not contain, even in our present the mint price. Mr Locke imputed this high excellent gold coin, more than an ounce of price to the permission of exporting silver bul- standard gold, and it may be thought, there lion, and to the prohibition of exporting silver fore, should not purchase more standard bul This permission of exporting, he said, lion. But gold in coin is more convenien!

coin.

than gold in bullion; and though, in England, |ing to sell a part of it for something less than the coinage is free, yet the gold which is car- the ordinary or average price. When, on the ried in bullion to the mint, can seldom be re- other hand, they import less than is wanted, turned in coin to the owner till after a delay they get something more than this price. of several weeks. In the present hurry of the But when, under all those occasional fluctu. mint, it could not be returned till after a de-ations, the market price either of gold or sil. lay of several months. This delay is equiva-ver bullion continues for several years tolent to a small duty, and renders gold in coin gether steadily and constantly, either more or somewhat more valuable than an equal quan-less above, or more or less below the mint tity of gold in bullion. If, in the English price, we may be assured that this steady and coin, silver was rated according to its proper constant, either superiority or inferiority of proportion to gold, the price of silver bullion price, is the effect of something in the state of would probably fall below the mint price, the coin, which, at that time, renders a cereven without any reformation of the silver tain quantity of coin either of more value or coin; the value even of the present worn and of less value than the precise quantity of buldefaced silver coin being regulated by the va- lion which it ought to contain. The conlue of the excellent gold coin for which it can stancy and steadiness of the effect supposes a be changed. proportionable constancy and steadiness in the cause.

A small seignorage or duty upon the coinage of both gold and silver, would probably The money of any particular country is, at increase still more the superiority of those any particular time and place, more or less an metals in coin above an equal quantity of accurate measure or value, according as the either of them in bullion. The coinage current coin is more or less exactly agreeable would, in this case, increase the value of the to its standard, or contains more or less exmetal coined in proportion to the extent of actly the precise quantity of pure gold or this small duty, for the same reason that the pure silver which it ought to contain. If in fashion increases the value of plate in propor- England, for example, forty-four guineas and tion to the price of that fashion. The supe- a half contained exactly a pound weight of riority of coin above bullion would prevent standard gold, or eleven ounces of fine gold, the melting down of the coin, and would and one ounce of alloy, the gold coin of Engaiscourage its exportation. If, upon any land would be as accurate a measure of the public exigency, it should become necessary actual value of goods at any particular time to export the coin, the greater part of it would and place as the nature of the thing would soon return again, of its own accord. Abroad, admit. But if, by rubbing and wearing, it could sell only for its weight in bullion. forty-four guineas and a half generally conAt home, it would buy more than that weight. tain less than a pound weight of standard There would be a profit, therefore, in bring- gold, the diminution, however, being greater ing it home again. In France, a seignorage in some pieces than in others, the measure of of about eight per cent. is imposed upon the value comes to be liable to the same sort of coinage, and the French coin, when exported, uncertainty to which all other weights and is said to return home again, of its own ac-measures are commonly exposed. As it rarely happens that these are exactly agreeable te The occasional fluctuations in the market their standard, the merchant adjusts the price price of gold and silver bullion arise from the of his goods as well as he can, not to what same causes as the like fluctuations in that those weights and measures ought to be, but of all other commodities. The frequent loss to what, upon an average, he finds, by expeof those metals from various accidents by sea rience, they actually are. In consequence of and by land, the continual waste of them in a like disorder in the coin, the price of goods gilding and plating, in lace and embroidery, comes, in the same manner, to be adjusted, in the wear and tear of coin, and in that of not to the quantity of pure gold or silver plate, require, in all countries which possess which the coin ought to contain, but to that no mines of their own, a continual importa- which, upon an average, it is found, by expetion, in order to repair this loss and this rience, it actually does contain.

cord.

waste.

The merchant importers, like all By the money price of goods, it is to be other merchants, we may believe, endeavour, observed, I understand always the quantity of as well as they can, to suit their occasional pure gold or silver for which they are sold, importations to what they judge is likely to without any regard to the denomination of be the immediate demand. With all their the coin. Six shillings and eight pence, for attention, however, they sometimes overdo example, in the time of Edward I., I conthe business, and sometimes underdo it. sider as the same money price with a pound When they import more bullion than is want-sterling in the present times, because it coned, rather than incur the risk and trouble of tained, as nearly as we can judge, the same exporting it again, they are sometimes will-quantity of pure silver. Notes 6, 7.

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CHAP. VI.

given for the profits of the undertaker of the work, who hazards his stock in this adventure, The value which the workmen add to the ma terials, therefore, resolves itself in this case

OF THE COMPONENT PART OF THE PRICE OF into two parts, of which the one pays their

COMMODITIES.

wages, the other the profits of their employer upon the whole stock of materials and wages IN that early and rude state of society which which he advanced. He could have no inteprecedes both the accumulation of stock and rest to employ them, unless he expected from the appropriation of land, the proportion be- the sale of their work something more than tween the quantities of labour necessary for what was sufficient to replace his stock to acquiring different objects, seems to be the him; and he could have no interest to employ only circumstance which can afford any rule a great stock rather than a small one, unless for exchanging them for one another. If his profits were to bear some proportion to among a nation of hunters, for example, it the extent of his stock.

usually costs twice the labour to kill a beaver The profits of stock, it may perhaps be
which it does to kill a deer, one beaver should thought, are only a different name for the
naturally exchange for or be worth two deer. wages of a particular sort of labour, the la-
It is natural that what is usually the produce bour of inspection and direction. They are,
of two days or two hours labour, should be however, altogether different, are regulated
worth double of what is usually the produce
of one day's or one hour's labour.

by quite different principles, and bear no pro-
portion to the quantity, the hardship, or the
ingenuity of this supposed labour of inspec
tion and direction. They are regulated alto-
gether by the value of the stock employed,
and are greater or smaller in proportion to the
extent of this stock. Let us suppose, for ex-
ample, that in some particular place, where
Or if the one species of labour requires an the common annual profits of manufacturing
uncommon degree of dexterity and ingenuity, stock are ten per cent. there are two different
the esteem which men have for such talents, manufactures, in each of which twenty work-
will naturally give a value to their produce, men are employed, at the rate of fifteen
superior to what would be due to the time pounds a year each, or at the expense of three
employed about it. Such talents can seldom hundred a-year in each manufactory. Let
be acquired but in consequence of long appli- us suppose, too, that the coarse materials
cation, and the superior value of their pro- annually wrought up in the one cost only
duce may frequently be no more than a rea- seven hundred pounds, while the finer mate-
sonable compensation for the time and labour rials in the other cost seven thousand. The
which must be spent in acquiring them. In capital annually employed in the one will, in
the advanced state of society, allowances of this case,
amount only to one thousand
this kind, for superior hardship and superior pounds; whereas that employed in the other
skill, are commonly made in the wages of la- will amount to seven thousand three hundred
bour; and something of the same kind must pounds. At the rate of ten per cent. there-
probably have taken place in its earliest and fore, the undertaker of the one will expect a
rudest period.

If the one species of labour should be more severe than the other, some allowance will naturally be made for this superior hardship; and the produce of one hour's labour in the one way may frequently exchange for that of two hour's labour in the other.

yearly profit of about one hundred pounds In this state of things, the whole produce only; while that of the other will expect of labour belongs to the labourer; and the about seven hundred and thirty pounds. But quantity of labour commonly employed in ac- though their profits are so very different, their quiring or producing any commodity, is the labour of inspection and direction may be only circumstance which an regulate the either altogether or very nearly the same. In quantity of labour which it ought commonly many great works, almost the whole labour to purchase, command, or exchange for. of this kind is committed to some principal As soon as stock has accumulated in the clerk, His wages properly express the value hands of particular persons, some of them will of this labour of inspection and direction. naturally employ it in setting to work indust- Though in settling them some regard rious people, whom they will supply with ma- commonly, not only to his labour and skill, terials and subsistence, in order to make a but to the trust which is reposed in him, yet profit by the sale of their work, or by what they never bear any regular proportion to the their labour adds to the value of the materials. capital of which he oversees the management; In exchanging the complete manufacture and the owner of this capital, though he is either for money, for labour, or for other thus discharged of almost all labour, still exgoods, over and above what may be sufficient pects that his profit should bear a regular proto pay the price of the materials, and the portion to his capital. In the price of com wages of the workmen, something must be modities, therefore, the profits of stock con

had

er of a

stitute a component part altogether different advances both the rent of this land, and the
from the wages of labour, and regulated by wages of this labour. Though the price of the
quite different principles.
corn, therefore, may pay the price as well as
the maintenance of the horse, the whole price
still resolves itself, either immediately or ulti-
mately, into the same three parts of rent, la-
bour, and profit.

In this state of things, the whole produce
of labour does not always belong to the la-
bourer. He must in most cases share it with
the owner of the stock which employs him.
Neither is the quantity of labour commonly In the price of flour or meal, we must add
employed in acquiring or producing any to the price of the corn, the profits of the mill-
commodity, the only circumstance which can er, and the wages of his servants; in the price
regulate the quantity which it ought common- of bread, the profits of the baker, and the
ly to purchase, command or exchange for. wages of his servants; and in the price of
An additional quantity, it is evident, must be both, the labour of transporting the corn from
due for the profits of the stock which advanc- the house of the farmer to that of the miller,
ed the wages and furnished the materials of and from that of the miller to that of the ba
that labour.
ker, together with the profits of those who ad-
vance the wages of that labour.

As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce. The wood of the forest, the grass of the field, and all the natural fruits of the earth, which, when land was in common, profits of their respective employers. cost the labourer only the trouble of gather- As any particular commodity comes to be ing them, come, even to him, to have an ad-more manufactured, that part of the price ditional price fixed upon them. He must which resolves itself into wages and profit, then pay for the licence to gather them, and comes to be greater in proportion to that which must give up to the landlord a portion of resolves itself into rent. In the progress of what his labour either collects or produces. the manufacture, not only the number of proThis portion, or, what comes to the same fits increase, but every subsequent profit is thing, the price of this portion, constitutes the greater than the foregoing; because the capi rent of land, and in the price of the greater tal from which it is derived must always be part of commodities, makes a third compo- greater. The capital which employs the wea

The price of flax resolves itself into the same three parts as that of corn. In the price of linen we must add to this price the wages of the flax-dresser, of the spinner, of the weaver, of the bleacher, &c. together with the

nent part.

The real value of all the different componfent parts of price, it must be observed, is measured by the quantity of labour which they can, each of them, purchase or command. Labour measures the value, not only of that part of price which resolves itself into labour, but of that which resolves itself into rent, and of that which resolves itself into profit.

In every society, the price of every commodity finally resolves itself into some one or other, or all of those three parts; and in every improved society, all the three enter, more or less, as component parts, into the price of the far greater part of commodities.

vers, for example, must be greater than that which employs the spinners; because it not only replaces that capital with its profits, but pays, besides, the wages of the weavers and the profits must always bear some proportion to the capital.

In the most improved societies, however, there are always a few commodities of which the price resolves itself into two parts only, the wages of labour, and the profits of stock; and a still smaller number, in which it consists altogether in the wages of labour. In the price of sea-fish, for example, one part pays the labour of the fisherman, and the other the profits of the capital employed in the fishIn the price of corn, for example, one part ery. Rent very seldom makes any part of it, pays the rent of the landlord, another pays the though it does sometimes, as I shall shew wages or maintenance of the labourers and la-hereafter. It is otherwise, at least through bouring cattle employed in producing it, and the greater part of Europe, in river fisheries. the third pays the profit of the farmer. These A salmon fishery pays a rent; and rent, though three parts seem either immediately or ulti- it cannot well be called the rent of land, makes mately to make up the whole price of corn. a part of the price of a salmon, as well as A fourth part, it may perhaps be thought is wares and profit. In some parts of Scotland, necessary for replacing the stock of the farm-a few poor people make a trade of gathering, er, or for compensating the wear and tear of along the sea-shore, those little variegated his labouring cattle, and other instruments of stones commonly known by the name of Scotch husbandry. But it must be considered, that pebbles. The price which is paid to them by the price of any instrument of husbandry, such the stone-cutter, is altogether the wages of as a labouring horse, is itself made up of the their labour; neither rent nor profit makes any same three parts; the rent of the land upon part of it. which he is reared, the labour of tending and rearing him, and the profits of the farmer, who

But the whole price of any commodity must still finally resolve itself into some one or other

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or all of those three parts; as whatever part | belong to different persons, they are readily
of it remains after paying the rent of the land, distinguished; but when they belong to th
and the price of the whole labour employed in same, they are sometimes confounded with
raising, manufacturing, and bringing it to one another, at least in common language.
market, must necessarily be profit to some.
body.

A gentleman who farms a part of his own
estate, after paying the expense of cultivation,
As the price or exchangeable value of every should gain both the rent of the landlord and
particular commodity, taken separately, re- the profit of the farmer. He is apt to deno-
solves itself into some one or other, or all of minate, however, his whole gain, profit, and
those three parts; so that of all the commodi- thus confounds rent with profit, at least in
ties which compose the whole annual produce common language. The greater part of our
of the labour of every country, taken com- North American and West Indian planters
plexly, must resolve itself into the same three are in this situation. They farm, the greater
parts, and be parcelled out among different in- part of them, their own estates: and accord-
habitants of the country, either as the wages ingly we seldom hear of the rent of a planta-
of their labour, the profits of their stock, or tion, but frequently of its profit.
the rent of their land. The whole of what is Common farmers seldom employ any over-
annually either collected or produced by the seer to direct the general operations of the
labour of every society, or, what comes to the farm. They generally, too, work a good deal
same thing, the whole price of it, is in this with their own hands, as ploughmen, harrow-
manner originally distributed among some of ers, &c. What remains of the crop, after pay-
its different members. Wages, profit, and ing the rent, therefore, should not only re-
rent, are the three original sources of all reve- place to them their stock employed in cultiva-
nue, as well as of all exchangeable value. All tion, together with its ordinary profits, but
other revenue is ultimately derived from some
one or other of these.

ney.

pay them the wages which are due to them, both as labourers and overseers. Whatever remains, however, after paying the rent and keeping up the stock, is called profit. But wages evidently make a part of it. The farmer, by saving these wages, must necessarily gain them. Wages, therefore, are in this case confounded with profit.

An independent manufacturer, who has stock enough both to purchase materials, and to maintain himself till he can carry his work to market, shouid gain both the wages of a journeyman who works under a master, and the profit which that master makes by the sale of that journeyman's work. His whole gains, however, are commonly called profit, and wages are, in this case, too, confounded with profit.

Whoever derives his revenue from a fund which is his own, must draw it either from his labour, from his stock, or from his land. The revenue derived from labour is called wages; that derived from stock, by the person who manages er employs it, is called profit; that derived from it by the person who does not employ it himself, but lends it to another, is called the interest or the use of moIt is the compensation which the borrower pays to the lender, for the profit which he has an opportunity of making by the use of the money. Part of that profit naturally belongs to the borrower, who runs the risk and takes the trouble of employing it, and part to the lender, who affords him the opportunisy of making this profit. The interest of mo- A gardener who cultivates his own garden ney is always a derivative revenue, which, if with his own hands, unites in his own person it is not paid from the pront which is made by the three different characters, of landlord, the use of the money, must be paid from some farmer, and labourer. His produce, there other source of revenue, unless perhaps the fore, should pay him the rent of the first, the borrower is a spendthrift, who contracts a se-profit of the second, and the wages of the cond debt in order to pay the interest of the third. The whole, however, is commonly confirst. The revenue which proceeds altogether sidered as the earnings of his labour. Both from land, is called xent. and belongs to the rent and profit are, in this case, confounded landlord. The revenue of the farmer is de- with wages. rived partly from his labour, and partly from als stock. To mm, and is only the instrument which enables him to earn the wages of this labour, and to make the profits of this stock. All taxes, and all the revenue which is founded upon them, all salaries, pensions, and annuities of every kind, are ultimately derived from some one or other of those three original sources of revenue, and are paid either immediately or mediately from the wages of labour, the profits of stock, or the rent of land.

When those three different sorts of revenue

As in a civilized country there are but few commodities of which the exchangeable value arises from labour only, rent and profit contributing largely to that of the far greater part of them, so the annual produce of its labour will always be sufficient to purchase of command a much greater quantity of labour than what was employed in raising, preparing, and bringing that produce to market. If the society were annuany to employ all the labour which it can annually purchase, as the quantity of labour would increase greatly every year, so the produce of every succeeding year

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