this cafe be cheated in confequence of the high valuation of filver in coin; as no creditor can at present be cheated in confequence of the high valuation of copper. The bankers only would fuffer by this regulation. When a run comes upon them they fometimes endeavour to gain time by paying in fixpences, and they would be precluded by this regulation from.this difcreditable method of evading immediate payment. They would be obliged in confequence to keep at all times in their coffers a greater quantity of cash than at prefent; and though this might no doubt be a confiderable inconveniency to them, it would at the fame time be a confiderable fecurity to their creditors.

THREE pounds feventeen fhillings and ten-pence halfpenny (the mint price of gold) certainly does not contain, even in our present excellent gold coin, more than an ounce of standard gold, and it may be thought, therefore, fhould not purchase more ftandard bullion. But gold in coin is more convenient than gold in bullion, and though, in England, the coinage is free, yet the gold which is carried in bullion to the mint, can feldom be returned in coin to the owner till after a delay of feveral weeks. In the present hurry of the mint, it could not be returned till after a delay of feveral months. This delay is equivalent to a small duty, and renders gold in coin fomewhat more valuable than an equal quantity of gold in bullion. If in the English coin filver was rated according to its proper proportion to gold, the price of filver bullion would probably fall below the mint price even without any reformation of the filver coin; the value even of the prefent worn and defaced filver coin being regulated by the value of the excellent gold coin for which it can be changed.

A SMALL feignorage or duty upon the coinage of both gold and filver would probably increase still more the fuperiority of those

metals

I.

BOOK metals in coin above an equal quantity of either of them in bullion. The coinage would in this cafe increase the value of the metal coined in proportion to the extent of this small duty; for the same reason that the fashion increases the value of plate in proportion to the price of that fashion. The fuperiority of coin above bullion would prevent the melting down of the coin, and would discourage its exportation. If upon any publick exigency it should become necessary to export the coin, the greater part of it would foon return again of its own accord. Abroad it could fell only for its weight in bullion. At home it would buy more than that weight. There would be a profit, therefore, in bringing it home again. In France a feignorage of about eight per cent. is impofed upon the coinage, and the French coin, when exported, is said to return home again of its own accord.

THE Occafional fluctuations in the market price of gold and filver bullion arife from the fame caufes as the like fluctuations in that of all other commodities. The frequent loss of those metals from various accidents by fea and by land, the continual waste of them in gilding and plating, in lace and embroidery, in the wear and tear of coin, and in that of plate; require, in all countries which poffefs no mines of their own, a continual importation in order to repair this lofs and this wafte. The merchant importers, like all other merchants, we may believe, endeavour, as well as they can, to fuit their occafional importations to what, they judge, is likely to be the immediate demand. With all their attention, however, they fometimes over do the business, and fometimes under-do it. When they import more bullion than is wanted, rather than incur the risk and trouble of exporting it again, they are sometimes willing to fell a part of it for something lefs than the ordinary or average price. When, on the other hand, they import less than is wanted, they get something more than this

price. But when, under all those occasional fluctuations, the market price either of gold or filver bullion continues for several years together steadily and conftantly, either more or less above, or more or less below the mint price; we may be affured that this steady and conftant, either fuperiority or inferiority of price, is the effect of fomething in the state of the coin, which, at that time, renders a certain quantity of coin either of more value or of less value than the precise quantity of bullion which it ought to contain. The constancy and steadiness of the effect, fuppofes a proportionable conftancy and steadiness in the cause.

The money of any particular country is, at any particular time and place, more or lefs an accurate measure of value according as the current coin is more or less exactly agreeable to its standard, or contains more or lefs exactly the precife quantity of pure gold or pure filver which it ought to contain. If in England, for example, forty-four guineas and a half contained exactly a pound weight of standard gold, or eleven ounces of fine gold and one ounce of alloy, the gold coin of England would be as accurate a measure of the actual value of goods at any particular time and place as the nature of the thing would admit. But if, by rubbing and wearing, forty-four guineas and a half generally contain lefs than a pound weight of ftandard gold; the diminution, however, being greater in fome pieces than in others; the meafure of value comes to be liable to the fame fort of uncertainty to which all other weights and measures are commonly exposed. As it rarely happens that these are exactly agreeable to their standard, the merchant adjufts the price of his goods, as well as he can, not to what those weights and measures ought to be, but to what, upon an average, hé finds by experience they actually are. In confequence of a like disorder in the coin the price of goods comes, in the fame manner, to be adjusted, not to the quantity of pure gold or filver which the H 4

VOL. I.

coin

BOOK

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coin ought to contain, but to that which, upon an average, it is found by experience, it actually does contain.

By the money-price of goods, it is to be observed, I understand always the quantity of pure gold or filver for which they are fold, without any regard to the denomination of the coin. Six fhillings and eight-pence, for example, in the time of Edward I. I confider as the fame money-price with a pound sterling in the present times; because it contained, as nearly as we can judge, the fame quantity of pure filver.

IN

СНАР. VI.

Of the component Parts of the Price of Commodities.

N that early and rude ftate of fociety which precedes both the accumulation of stock and the appropriation of land, the proportion between the quantities of labour neceffary for acquiring different objects feems to be the only circumstance which can afford any rule for exchanging them for one another. If among a nation of hunters, for example, it ufually cofts twice the labour to kill a beaver which it does to kill a deer, one beaver fhould naturally exchange for or be worth two deer. It is natural that what is usually the produce of two days or two hours labour, fhould be worth double of what is ufually the produce of one day's or one hour's labour.

If the one fpecies of labour fhould be more fevere than the other, fome allowance will naturally be made for this fuperior hardship;

and

and the produce of one hour's labour in the one way may frequently CHAP. exchange for that of two hours labour in the other.

OR if the one fpecies of labour requires an uncommon degree of dexterity and ingenuity, the esteem which men have for such talents, will naturally give a value to their produce, fuperior to what would be due to the time employed about it. Such talents can feldom be acquired but in confequence of long application, and the fuperior value of their produce may frequently be no more than a reasonable compenfation for the time and labour which must be spent in acquiring them. In the advanced state of society, allowances of this kind, for fuperior hardship and superior skill, are commonly made in the wages of labour; and fomething of the fame kind must probably have taken place in its earliest and rudest period.

In this ftate of things, the whole produce of labour belongs to the labourer; and the quantity of labour commonly employed in acquiring or producing any commodity, is the only circumftance which can regulate the quantity of labour which it ought commonly to purchase, command, or exchange for.

As foon as stock has accumulated in the hands of particular perfons, fome of them will naturally employ it in setting to work industrious people, whom they will fupply with materials and subsistence, in order to make a profit by the fale of their work, or by what their labour adds to the value of the materials. In exchanging the complete manufacture either for money, for labour, or for other goods, over and above what may be fufficient to pay the price of the materials, and the wages of the workmen, fomething must be given for the profits of the undertaker of the work VOL. I.

I

who

VI.