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The Wealth of Nations - Part 4
At Rome,
on the contrary, the principal courts of justice consisted either of a
single judge, or of a small number of judges, whose characters, es-
pecially as they deliberated always in public, could not fail to be
very much affected by any rash or unjust decision. In doubtful
cases, such courts, from their anxiety to avoid blame, would nat-
urally endeavour to shelter themselves under the example, or pre-
cedent, of the judges who had sat before them, either in the same, or
in some other court. This attention to practice and precedent, nec-
essarily formed the Roman law into that regular and orderly system
in which it has been delivered down to us; and the like attention has
had the like effects upon the laws of every other country where such
attention has taken place. The superiority of character in the Ro-
mans over that of the Greeks, so much remarked by Polybius and
Dionysius of Halicarnassus,^^^ was probably more owing to the bet-
ter constitution of their courts of justice, than to any of the circum-
stances to which those authors ascribe it. The Romans are said to
have been particularly distinguished for their superior respect to an
oath. But the people who were accustomed to make oath only before
some diligent and well-informed court of justice, would naturally
be much more attentive to what they swore, than they who were ac-
customed to do the same thing before mobbish and disorderly as-
semblies.
The abilities, both civil and military, of the Greeks and Romans,
will readily be allowed to have been, at least, equal to those of any
modern nation. Our prejudice is perhaps rather to overrate them.
But except in what related to military exercises, the state seems to
have been at no pains to form those great abilities: for I cannot be
induced to believe, that the musical education of the Greeks could
be of much consequence in forming them. Masters, however, had
been found, it seems, for mstructing the better sort of people among
those nations in every art and science in which the circumstances of
their society rendered it necessary or convenient for them to be in-
structed. The demand for such instruction produced, what it always
produces, the talent for giving it; and the emulation which an un-
restrained competition never fails to excite, appears to have brought
that talent to a very high degree of perfection. In the attention
which the ancient philosophers excited, in the empire which they
acquired over the opinions and principles of their auditors, in the
faculty which they possessed of giving a certain tone and character
to the conduct and conversation of those auditors; they appear to
Above, p. 729.
EDUCATION OF YOUTH 733
have been much superior lo any modern teachers. In modern times,
the diligence of public teachers is more or less corrupted by the cir-
cumstances, which render them more or less independent of their
success and reputation in their particular professions. Their salaries
too put the private teacher, who would pretend to come into com-
petition with them, in the same state with a merchant who attempts
to trade without a bounty, in competition with those who trade with
a considerable one. If he sells his goods at nearly the same price, he
cannot have the same profit, and poverty and beggary at least, if
not bankruptcy and ruin will infallibly be his lot. If he attempts to
sell them much dearer, he is likely to have so few customers that his
circumstances will not be much mended. The privileges of gradua-
tion, besides, are in many countries necessary, or at least extremely
convenient to most men of learned professions; that is, to the far
greater part of those who have occasion for a learned education. But
those privileges can be obtained only by attending the lectures of
the public teachers. The most careful attendance upon the ablest
instructions of any private teacher, cannot always give any title to
demand them. It is from these different causes that the private
teacher of any of the sciences which are commonly taught in uni-
versities, is in modern times generally considered as in the very low-
est order of men of letters. A man of real abilities can scarce find
out a more humiliating or a more unprofitable employment to turn
them to. The endowments of schools and colleges have, in this man-
ner, not only corrupted the diligence of public teachers, but have
rendered it almost impossible to have any good private ones.
Were there no public institutions for education, no S5^tem, no if there
science would be taught for which there was not some demand; or were no
which the circumstances of the times did not render it either nec- stitutos
essary, or convenient, or at least fashionable, to learn. A private for educa-
teacher could never find his account in teaching, either an exploded
and antiquated system of a science acknowledged to be useful, or a except
science universally believed to be a mere useless and pedantic heap what was
of sophistry and nonsense. Such systems, such sciences, can sub-
sist no where, but in those incorporated societies for education taught,
whose prosperity and revenue are in a great measure independent
of their reputation, and altogether independent of their industry.
Were there no public institutions for education, a gentleman, after
going through, with application and abilities, the most complete
course of education which the circumstances of the times were sup-
posed to afford, could not come into the world completely ignorant
of every thing which is the common subject of conversation among
gentlemen and men of the world.
Women’s
education
is e'^cel-
knt in
conse-
quence of
the ab-
sence of
public in-
stitutions
Ought
the state
to give
no at-
tention to
educa-
tion?
In some
cases it
ought, in
others it
need not
Division
of labour
destroys
intellec-
tual, so-
cial and
martial
virtues
unless
govern-
ment
takes
pains to
prevent it,
734 THE WEALTH OF NATIONS
There are no public institutions for the education of women, and
there is accordingly nothing useless, absurd, or fantastical in the
common course of* their education. They are taught what their
parents or guardians judge it necessary or useful for them to learn;
and they are taught nothing else. Every part of their education
tends evidently to some useful purpose; either to improve the natu-
ral attractions of their person, or to form their mind to reserve, to
modesty, to chastity, and to (economy; to render them both likely
to become the mistresses of a family, and to behave properly when
they have become such. In every part of her life a woman feels
some conveniency or advantage from every part of her education.
It seldom happens that a man, in an^ part of his life, derives any
conveniency or advantage from some of the most laborious and
troublesome parts of his education.
Ought the public, therefore, to give no attention, it may be
asked, to the education of the people? Or if it ought to give any,
what are the different parts of education which it ought to attend
to in the different orders of the people? and in what manner ought
it to attend to them?
In some cases the state of the society necessarily places the great-
er part of individuals in such situations as naturally form in them,
without any attention of government, almost all the abilities ancl
virtues which that state requires, or perhaps can admit of. In other
cases the state of the society does not place the greater part of in-
dividuals in such situations, and some attention of government is
necessary in order to prevent the almost entire corruption and de-
generacy of the great body of the people.
In the progress of the division of labour, the employment of the
far greater part of those who live by labour, that is, of the great
body of the people, comes to be confined to a few very simple oper-
ations, frequently to one or two. But the understandings of the
greater part of men are necessarily formed by their ordinary em-
ployments. The man whose whole life is spent in performing a few
simple operations, of which the effects too are, perhaps, always the
same, or very nearly the same, has no occasion to exert his under-
standing, or to exercise his invention in finding out expedients for
removing difficulties which never occur. He naturally loses, there-
fore, the habit of such exertion, and generally becomes as stupid
and ignorant as it is possible for a human creature to become. The
torpor of his mind renders him, not only incapable of relishing or
bearing a part in any rational conversation, but of conceiving any
generous, noble, or tender sentiment, and consequently of forming
any just judgment concerning many even of the ordinary duties of
EDUCATION OF YOUTH 735
private life. Of the great and extensive interests of his country he
is altogether incapable of judging; and unless very particular pains
have been taken to render him otherwise, he is equally incapable
of defending his country in war. The uniformity of his stationary
life naturally corrupts the courage of his mind, and makes him re-
gard with abhorrence the irregular, uncertain, and adventurous
life of a soldier. It corrupts even the activity of his body, and ren-
ders him incapable of exerting his strength with vigour and per-
severance, in any oiher employment than that to which he has been
bred. His dexterity at his own particular trade seems, in this man-
ner, to be acquired at the expence of his intellectual, social, and
martial virtues. But in every improved and civilized society this is
the state into which the labouring poor, that is, the great body of
the people, must necessarily fall, unless government takes some
pains to prevent it.
It is otherwise in the barbarous societies, as they are commonly
called, of hunters, of shepherds, and even of husbandmen in that
rude state of husbandry which precedes the improvement of manu-
factures, and the extension of foreign commerce. In such societies
the varied occupations of every man oblige every man to exert his
capacity, and to invent expedients for removing difficulties which
are continually occurring. Invention is kept alive, and the mind is
not suffered to fall into that drowsy stupidity, which, in a civil-
ized society, seems to benumb the understanding of almost all the
inferior ranks of people. In those barbarous societies, as they are
called, every man, it has already been observed, is a warrior. Every
man too is in some measure a statesman, and can form a tolerable
judgment concerning the interest of the society, and the conduct of
those who govern it. How far their chiefs are good judges in peace,
or good leaders in war, is obvious to the observation of almost every
single man among them. In such a society indeed, no man can well
acquire that improved and refined understanding, which a few men
sometimes possess in a more civilized state. Though in a rude so-
ciety there is a good deal of variety in the occupations of every in-
dividual, there is not a great deal in those of the whole society.
Every man does, or is capable of doing, almost every thing which
any other man does, or is capable of doing. Every man has a con-
siderable degree of knowledge, ingenuity, and invention; but scarce
any man has a great degree. The degree, however, which is com-
monly possessed, is generally sufficient for conducting the whole
simple business of the society. In a civilized state, on the contrary,
though there is little variety in the occupations of the greater part
^ Ed. I reads “the mind:> ot men are not ”
whereas
in bar-
barous
societies
those
virtues
are kept
alive by
constant
necessity
The edu-
cation of
the com-
mon
people re-
quires
attention
from the
state
more than
that of
people of
rank and
fortune,
whose
parents
can look
after their
interests,
and who
spend
tidr lives
in varied
occupa-
tions
chiefly
intellec-
tual,
736 the wealth of nations
of individuals, there is an almost infinite variety in those of the
whole society. These varied occupations present an almost infinite
variety of objects to the contemplation of those few, who, being
attached to no particular occupation themselves, have leisure and
inclination to examine the occupations of other people. The con-
templation of so great a variety of objects necessarily exercises
their minds in endless comparisons and combinations, and renders
their understandings, in an extraordinary degree, both acute and
comprehensive. Unless those few, however, happen to be placed in
some very particular situations, their great abilities, though hon-
ourable to themselves, may contribute very little to the good gov-
ernment or happiness of their society. Notwithstanding the great
abilities of those few, all the nobler parts of the human character
may be, in a great measure, obliterated and extinguished in the
great body of the people.
The education of the common people requires, perhaps, in a civ-
ilized and commercial society, the attention of the public more
than that of people of some rank and fortune. People of some rank
and fortune are generally eighteen or nineteen years of age before
they enter upon that particular business, profession, or trade, by
which they propose to distinguish themselves in the world. They
have before that full time to acquire, or at least to fit themselves
for afterwards acquiring, every accomplishment which can recom-
mend them to the public esteem, or render them worthy of it. Their
parents or guardians are generally sufficiently anxious that they
should be so accomplished, and are, in most cases, willing enough
to lay out the expence which is necessary for that purpose. If they
are not always properly educated, it is seldom from the want of ex-
pence laid out upon their education; but from the improper appli-
cation of that expence. It is seldom from the want of masters; but
from the negligence and incapacity of the masters who are to be
had, and from the difficulty, or rather from the impossibility which
there is, in the present state of things, of finding any better. The
employments too in which people of some rank or fortune spend the
greater part of their lives, are not, like those of the common people,
simple and uniform. They are almost all of them extremely com-
plicated, and such as exercise the head more than the hands. The
understandings of those who are engaged in such employments can
seldom grow torpid for want of exercise. The employments of
people of some rank and fortune, besides, are seldom such as harass
them from morning to night. They generally have a good deal of
leisure, during which they may perfect themselves in every branch
Ed I reads “from.”
EDUCATION OE YOUTH 737
either of useful or ornamental knowledge of which they may have
laid the foundation, or for which they may have acquired some
taste in the earlier part of life.
It is otherwise with the common people. They have little time to unlike the
spare for education. Their parents can scarce afford to maintain
them even in infancy. As soon as they are able to work, they must poor,
apply to some trade by which they can earn their subsistence. That
trade too is generally so simple and uniform as to give little exer-
cise to the understanding; while, at the same time, their labour is
both so constant and so severe, that it leaves them little leisure and
less inclination to apply to, or even to think of any thing else.
But though the common people cannot, in any civilized society, The
ne so well instructed as people of some rank and fortune, the most
essential parts of education, however, to read, write, and account, or
can be acquired at so early a period of life, that the greater part on the
even of those who are to be bred to the lowest occupations, have fgquirL
time to acquire them before they can be employed in those occupa- ment of
tions. For a very small expence the public can facilitate, can en- reading,
courage, and can even impose upon almost the whole body of the and^^fth-
people, the necessity of acquiring those most essential parts of ed- metic,
ucation.
The public can facilitate this acquisition by establishing in every by estab-
parish or district a little school, where children may be taught for a
reward so moderate, that even a common labourer may aford it; schools
the master being partly, but not wholly paid by the public; be-
cause, if he was wholly, or even principally paid by it, he would
soon learn to neglect his business. In Scotland the establishment of
such parish schools has taught almost the whole common people to
read, and a very great proportion of them to write and account. In
England the establishment of charity schools has had an effect of
the same kind, though not so universally, because the establish-
ment is not so universal. If in those little schools the books, by
which the children are taught to read, were a little more instruc-
tive than they commonly are; and if, instead of a little smat-
tering of Latin, which the children of the common people are some-
times taught there, and which can scarce ever be of any use to
them; they were instructed in the elementary parts of geometry
and mechanics, the literary education of this rank of people would
perhaps be as complete as it can There is scarce a common
trade which does not afford some opportunities of applying to it
the principles of geometry and mechanics, and which would not
therefore gradually exercise and improve the common people in
Ed. I reads “the.” ^ Ed. i reads “as it is capable of being.”
giving
prizes,
and re-
quiring
men to
pass an
examina-
tion be-
fore set-
ting up
in trade.
In this
way the
Greeks
and
Romans
main-
tained a
martial
spirit.
Martial
spirit in
the people
would
diminish
both the
necessary
size and
the dan-
ger of a
standing
army.
738 the wealth of nations
those principles, the necessary introduction to the most sublime as
well as to the most useful sciences.
The public can encourage the acquisition of those most essential
parts of education by giving small premiums, and little badges of
distinction, to the children of the common people who excel in
them.
The public can impose upon almost the whole body of the people
the necessity of acquiring those most essential parts of education,
by obliging every man to undergo an examination or probation in
them before he can obtain the freedom in any corporation, or be al-
lowed to set up any trade either in a village or town corporate.
It was in this manner, by facilitating the acquisition of their mili-
tary and gymnastic exercises, by encouraging it, and even by im-
posing upon the whole body of the people the necessity of learning
those exercises, that the Greek and Roman republics maintained the
martial spirit of their respective citizens. They facilitated the ac-
quisition of those exercises by appointing a certain place for learn-
ing and practising them, and by granting to certain masters the
privilege of teaching in that place. Those masters do not appear to
have had either salaries or exclusive privileges of any kind. Their
reward consisted altogether in what they got from their scholars;
and a citizen who had learnt his exercises in the public Gymnasia,
had no sort of legal advantage over one who had learnt them pri-
vately, provided the latter had learnt them equally well Those re-
publics encouraged the acquisition of those exercises, by bestowing
little premiums and badges of distinction upon those who excelled
in them. To have gained a prize in the Olympic, Isthmian or Nem-
aean games gave illustration, not only to the person who gained it,
but to his whole family and kindred. The obligation which every
citizen was under to serve a certain number of years, if called upon,
in the armies of the republic, sufficiently imposed the necessity of
learning those exercises without which he could not be fit for that
service.
That in the progress of improvement the practice of military ex-
ercises, unless government takes proper pains to support it, goes
gradually to decay, and, together with it, the martial spirit of the
great body of the people, the example of modern Europe sufficient-
ly demonstrates. But the security of every society must always de-
pend, more or less, upon the martial spirit of the great body of the
people. In the present times, indeed, that martial spirit alone, and
unsupported by a well-disciplined standing army, would not, per-
haps, be sufficient for the defence and security of any society. But
where every citizen had the spirit of a soldier, a smaller standing
EDUCATION OF YOUTH 739
army would surely be requisite. That spirit, besides, would neces-
sarily diminish very much the dangers to liberty, whether real or
imaginary, which are commonly apprehended from a standing
army. As it would very much facilitate the operations of that army
against a foreign invader, so it would obstruct them as much if un-
fortunately they should ever be directed against the constitution of
the state.
The ancient institutions of Greece and Rome seem to have been
much more effectual, for maintaining the martial spirit of the great
body of the people, than the establishment of what are called the
militias of modern times. They were much more simple. When they
were once established, they executed themselves, and it required
little or no attention from government to maintain them in the most
perfect vigour. Whereas to maintain, even in tolerable execution,
the complex regulations of any modern militia, requires the con-
tinual and painful attention of government, without which they are
constantly falling into total neglect and disuse. The influence, be-
sides, of the ancient institutions was much more universal. By
means of them the whole body of the people was completely in-
structed in the use of arms. Whereas it is but a very small part of
them who can ever be so instructed by the regulations of any mod-
ern militia; except, perhaps, that of Switzerland. But a coward, a
man incapable either of defending or of revenging himself, evident-
ly wants one of the most essential parts of the character of a man.
He is as much mutilated and deformed in his mind as another is in
his body, who is either deprived of some of its most essential mem-
bers, or has lost the use of them.^^® He is evidently the more wretch-
ed and miserable of the two; because happiness and misery, which
reside altogether in the mind, must necessarily depend more upon
the healthful or unhealthful, the mutilated or entire state of the
mind, than upon that of the body. Even though the martial spirit
of the people were of no use towards the defence of the society, yet
to prevent that sort of mental mutilation, deformity, and wretched-
ness, which cowardice necessarily involves in it, from spreading
themselves through the great body of the people, would still de-
serve the most serious attention of government; in the same man-
ner as it would deserve its most serious attention to prevent a lep-
rosy or any other loathsome and offensive disease, though neither
mortal nor dangerous, from spreading itself among them; though,
perhaps, no other public good might result from such attention be-
sides the prevention of so great a public evil.
The same thing may be said of the gross ignorance and stupidity
The
Greek
and
Roman
institu-
tions were
more ef-
fectual
than
modern
militias,
which
only in-
clude a
small por-
tion of
the
people.
It is the
duty of
govern-
ment to
prevent
the
growth
of
coward-
ice,
^ Ed. I reads “the use of those members.’
gross ig-
norance
and stu-
pidity.
These
institu-
tions are
chiefly
for reli-
gious
instruc-
tion.
Religious
like other
teachers
are more
vigorous
ifun-
740 THE WEALTH OF NATIONS
which, in a civilized society, seem so frequently to benumb the un-
derstandings of all the inferior ranks of people. A man without the
proper use of the intellectual faculties of a man, is, if possible, more
contemptible than even a coward, and seems to be mutilated and
deformed in a still more essential part of the character of human
nature. Though the state was to derive no advantage from the in-
struction of the inferior ranks of people, it would still deserve its
attention that they should not be altogether uninstructed. The
state, however; derives no inconsiderable advantage from their in-
struction. The more they are instructed, the less liable they are to
the delusions of enthusiasm and superstition, which, among igno-
rant nations, frequently occasion the most dreadful disorders. An
instructed and intelligent people besides, are always more decent
and orderly than an ignorant and stupid one. They feel themselves,
each individually more respectable, and more likely to obtain the
respect of their lawful superiors, and they are therefore more dis-
posed to respect those superiors. They are more disposed to exam-
ine, and more capable of seeing through, the interested complaints
of faction and sedition, and they are, upon that account, less apt to
be misled into any wanton or unnecessary opposition to the meas-
ures of government. In free countries, where the safety of govern-
ment depends very much upon the favourable judgment which the
people may form of its conduct, it must surely be of the highest im-
portance that they should not be disposed to judge rashly or capri-
ciously concerning it.
Article III
Of the Expence of the Institutions for the Instruction of People
of all Ages
The institutions for the instruction of people of all ages are chiefly
those for religious instruction. This is a species of instruction of
which the object is not so much to render the people good citizens
in this world, as to prepare them for another and a better world in
a life to come. The teachers of the doctrine which contains this in-
struction, in the same manner as other teachers, may either depend
altogether for their subsistence upon the voluntary contributions of
their hearers; or they may derive it from some other fund to which
the law of their country may entitle them; such as a landed estate,
a tythe or land tax, an established salary or stipend. Their exertion,
their zeal and industry, are likely to be much greater in the former
RELIGIOUS INSTRUCTION 74i
situation than in the latter. In this respect the teachers of new re- estab-
ligions have always had a considerable advantage in attacking kshedand
those ancient and established systems of which the clergy, reposing dowed.
themselves upon their benefices, had neglected to keep up the fer-
vour of faith and devotion in the great body of the people; and
having given themselves up to indolence, were become altogether in-
capable of making any vigorous exertion in defence even of their
own establishment. The clergy of an established and well-endowed
religion frequently become men of learning and elegance, who pos-
sess all the virtues of gentlemen, or which can recommend them to
the esteem of gentlemen; but they are apt gradually to lose the
qualities, both good and bad, which gave them authority and in-
fluence with the inferior ranks of people, and which had perhaps
been the original causes of the success and establishment of their
religion. Such a clergy, when attacked by a set of popular and bold,
though perhaps stupid and ignorant enthusiasts, feel themselves as
perfectly defenceless as the indolent, effeminate, and full-fed na-
tions of the southern parts of Asia, when they were invaded by the
active, hardy, and hungry Tartars of the North. Such a clergy, up-
on such an emergency, have commonly no other resource than to
call upon the civil magistrate to persecute, destroy, or drive out
their adversaries, as disturbers of the public peace. It was thus that
the Roman catholic clergy called upon the civil magistrate to perse-
cute the protestants; and the church of England, to persecute the
dissenters; and that in general every religious sect, when it has
once enjoyed for a century or two the security of a legal establish-
ment, has found itself incapable of making any vigorous defence
against any new sect which chose to attack its doctrine or discipline.
Upon such occasions the advantage in point of learning and good
writing may sometimes be on the side of the established church.
But the arts of popularity, all the arts of gaining proselytes, are
constantly on the side of its adversaries. In England those arts have
been long neglected by the well-endowed clergy of the established
church, and are at present chiefly cultivated by the dissenters and
by the methodists. The independent provisions, however, which in
many places have been made for dissenting teachers, by means of
voluntary subscriptions, of trust rights, and other evasions of the
law, seem very much to have abated the zeal and activity of those
teachers. They have many of them become very learned, ingenious,
and respectable men; but they have in general ceased to be very
popular preachers. The methodists, without half the learning of the
dissenters, are much more in vogue.
In the church of Rome, the industry and zeal of the inferior
742
THE WEALTH OF NATIONS
The in-
ferior
clergy of
the
Church of
Rome are
more
stimu-
lated by
self-inter-
est than
those of
any
estab-
lished
Protest-
ant
Church.
Hume
says the
state may
leave the
promo-
tion of
some arts
to indi-
viduals
who
benefit
by them,
others
must be
promoted
by the
state ;
clergy are kept more alive by the powerful motive of self-inter-
est, than perhaps in any established protestant church. The paro-
chial clergy derive, many of them, a very considerable part of their
subsistence from the voluntary oblations of the people; a source of
revenue which confession gives them many opportunities of improv-
ing. The mendicant orders derive their whole subsistence from such
oblations. It is with them, as with the hussars and light infantry of
some armies; no plunder, no pay. The parochial clergy are like
those teachers whose reward depends partly upon their salary, and
partly upon the fee or honoraries which they get from their pupils;
and these must always depend more or less upon their industry
and reputation. The mendicant orders are like those teachers whose
subsistence depends altogether upon their industry. They are ob-
liged, therefore, to use every art which can animate the devotion of
the common people. The establishment of the two great mendicant
orders of St. Dominic and St. Francis, it is observed by Machi-
avel,^^^ revived, in the thirteenth and fourteenth centuries, the lan-
guishing faith and devotion of the catholic church. In Roman cath-
olic countries the spirit of devotion is supported altogether by the
monks and by the poorer parochial clergy. The great dignitaries of
the church, with all the accomplishments of gentlemen and men of
the world, and sometimes with those of men of learning, are care-
ful enough to maintain the necessary discipline over their inferiors,
but seldom give themselves any trouble about the instruction of
the people.
^‘Most of the arts and professions in a state,” says by far the
most illustrious philosopher and historian of the present age, ‘‘are
of such a nature, that, while they promote the interests of the so-
ciety, they are also useful or agreeable to some individuals; and in
that case, the constant rule of the magistrate, except, perhaps, on
the first introduction of any art, is, to leave the profession to itself,
and trust its encouragement to the individuals who reap the benefit
of it. The artizans, finding their profits to rise by the favour of their
customers, increase, as much as possible, their skill and industry;
and as matters are not disturbed by any injudicious tampering, the
commodity is always sure to be at all times nearly proportioned to
the demand.
“But there are also some callings, which, though useful and even
necessary in a state, bring no advantage or pleasure to any individ-
ual, and the supreme power is obliged to alter its conduct with re-
gard to the retainers of those professions. It must give them public
Eds. 1-3 read “is.”
In “Discourses on the First Decade of Titus Livius book iii., chap. i.
RELIGIOUS INSTRUCTION 743
encouragement in order to their subsistence; and it must provide
against that negligence to which they will naturally be subject,
either by annexing particular honours to the profession, by estab
lishing a long subordination of ranks and a strict dependance, or by
some other expedient. The persons employed in the finances,
fleets, and magistracy, are instances of this order of men.
' ^It may naturally be thought, at first sight, that the ecclesiastics
belong to the first class, and that their encouragement, as well as
that of lawyers and physicians, may safely be entrusted to the lib-
erality of individuals, who are attached to their doctrines, and who
find benefit or consolation from their spiritual ministry and assis-
tance. Their industry and vigilance wiU, no doubt, be whetted by
such an additional motive; and their skill in the profession, as well
as their address in governing the minds of the people, must receive
daily increase, from their increasing practice, study, and attention.
“But if we consider the matter more closely, we shall find, that
this interested diligence of the clergy is what every wise legislator
will study to prevent; because, in every religion except the true, it
is highly pernicious, and it has even a natural tendency to pervert
the true, by infusing into it a strong mixture of superstition, folly,
and delusion. Each ghostly practitioner, in order to render himself
more precious and sacred in the eyes of his retainers, will inspire
them with the most violent abhorrence of all other sects, and con-
tinually endeavour, by some novelty, to excite the languid devo-
tion of his audience. No regard will be paid to truth, morals, or de-
cency in the doctrines inculcated. Every tenet will be adopted that
best suits the disorderly affections of the human frame. Customers
will be drawn to each conventicle by new industry and address in
practising on the passions and credulity of the populace. And in the
end, the civil magistrate will find, that he has dearly paid for his
pretended frugality, in saving a fixed establishment for the priests;
and that in reality the most decent and advantageous composition,
which he can make with the spiritual guides, is to bribe their in-
dolence, by assigning stated salaries to their profession, and render-
ing it superfluous for them to be farther active, than merely to pre-
vent their flock from straying in quest of new pastures. And in this
manner ecclesiastical establishments, though commonly they arose
at first from religious views, prove in the end advantageous to the
political interests of society.”
But whatever may have been the good or bad effects of the in-
The original reads “finances, armies, fleets.”
^^Hume, History, chap, xxix., vol. iv., pp. 30 , in ed. of i773, which
differs verbally both from earlier and from later editions.
it might
be
thought
that the
teaching
of religion
belonged
to the
first class,
but it
does not,
because
the inter-
ested 2 eai
of the
clergj’
should be
discour-
aged.
EstabKsh-
ments and
public
endow-
ments
have not
been due
to reason-
ing like
this, but
to the
needs of
political
faction.
If politics
had never
cdledin
the aid of
religion,
sects
would
have been
so nume-
rous that
they
would
have
744 the wealth OF NATIONS
dependent provision of the clergy; it has, perhaps, been very sel-
dom bestowed upon them from any view to those effects. Times of
violent religious controversy have generally been times of equally
violent political faction. Upon such occasions, each political party
has either found it, or imagined it, for its interest, to league itself
with some one or other of the contending religious sects. But this
could be done only by adopting, or at least by favouring, the tenets
of that particular sect. The sect which had the good fortune to be
leagued with the conquering party, necessarily shared in the vic-
tory of its ally, by whose favour and protection it was soon en-
abled in some degree to silence and subdue all its adversaries. Those
adversaries had generally leagued themselves with the enemies of
the conquering party, and were therefore the enemies of that party.
The clergy of this particular sect having thus become complete
masters of the field, and their influence and authority with the
great body of the people being in its highest vigour, they were
powerful enough to over-awe the chiefs and leaders of their own
party, and to oblige the civil magistrate to respect their opinions
and inclinations. Their first demand was generally, that he should
silence and subdue all their adversaries; and their second, that he
should bestow an independent provision on themselves. As they
had generally contributed a good deal to the victory, it seemed not
unreasonable that they should have some share in the spoil. They
were weary, besides, of humouring the people, and of depending
upon their caprice for a subsistence. In making this demand there-
fore they consulted their own ease and comfort, without troubling
themselves about the effect which it might have in future times up-
on the influence and authority of their order. The civil magistrate,
who could comply with this demand only by giving them some-
thing which he would have chosen much rather to take, or to keep
to himself, was seldom very forward to grant it. Necessity, how-
ever, always forced him to submit at last, though frequently not till
after many delays, evasions, and affected excuses.
But if politics had never called in the aid of religion, had the
conquering party never adopted the tenets of one sect more than
those of another, when it had gained the victory, it would prob-
ably have dealt equally and impartially with all the different sects,
and have allowed every man to chuse his own priest and his own
religion as he thought proper. There would in this case, no doubt,
have been a great multitude of religious sects. Almost every differ-
ent congregation might probably have made a little sect by itself,
or have entertained some peculiar tenets of its own. Each teacher
would no doubt have felt himself under the necessity of making
RELIGIOUS INSTRUCTION 745
the utmost exertion, and of using every art both to preserve and to learnt to
increase the number of his disciples. But as every other teacher
would have felt himself under the same necessity, the success of other,
no one teacher, or sect of teachers, could have been very great. The
interested and active zeal of religious teachers can be dangerous
and troublesome only where there is, either but one sect tolerated
in the society, or where the whole of a large society is divided into
two or three great sects; the teachers of each acting by concert,
and under a regular discipline and subordination. But that zeal
must be altogether innocent where the society is divided into two
or three hundred, or perhaps into as many thousand small sects, of
which no one could be considerable enough to disturb the public
tranquillity. The teachers of each sect, seeing themselves surround-
ed on all sides with more adversaries than friends, would be obliged
to learn that candour and moderation which is so seldom to be
found among the teachers of those great sects, whose tenets, being
supported by the civil magistrate, are held in veneration by almost
all the inhabitants of extensive kingdoms and empires, and who
therefore see nothing round them but followers, disciples, and
humble admirers. The teachers of each little sect, finding them-
selves almost alone, would be obliged to respect those of almost
every other sect, and the concessions which they would mutually
find it both convenient and agreeable to make to one another,
might in time probably reduce the doctrine of the greater part of
them to that pure and rational religion, free from every mixture
of absurdity, imposture, or fanaticism, such as wise men have in
all ages of the world wished to see established; but such as positive
law has perhaps never yet established, and probably never will
establish in any country: because, with regard to religion, positive
law always has been, and probably always will be, more or less in-
fluenced by popular superstition and enthusiasm. This plan of ec-
clesiastical government, or more properly of no ecclesiastical gov-
ernment, was what the sect called Independents, a sect no doubt
of very wild enthusiasts, proposed to establish in England towards
the end of the civil war. If it had been established, though of a very
unphilosophical origin, it would probably by this time hpe been
productive of the most philosophical good temper and moderation
with regard to every sort of religious principle. It has been estab-
lished in Pennsylvania, where, though the Quakers happen to be
the most numerous, the law in reality favours no one sect more
than another, and it is there said to have been productive of this
philosophical good temper and moderation.
^‘®Ed. I reads “of each sect.” ^"Ed. i reads “the most numerous sect”
and if
they did
not, their
zeal could
do no
harm.
Of the
two sys-
tems of
morality,
the strict
or austere
and the
liberal or
loose, the
first is
favoured
by the
common
people,
the sec-
ond by
people of
fashion.
74^ THE WEALTH OE NATIONS
But though this equality of treatment should not be productive
of this good temper and moderation in all, or even in the greater
part of the religious sects of a particular country; yet provided
those sects were sufficiently numerous, and each of them conse-
quently too small to disturb the public tranquillity, the excessive
zeal of each for its particular tenets could not well be productive
of any very hurtful effects, but, on the contrary, of several good
ones: and if the government was perfectly decided both to let them
all alone, and to oblige them all to let alone one another, there is
little danger that they would not of their own accord subdivide
themselves fast enough, so as soon to become sufficiently numerous.
In every civilized society, in every society where the distinction
of ranks has once been completely established, there have been al-
ways two different schemes or systems of morality current at the
same time; of which the one may be called the strict or austere;
the other the liberal, or, if you will, the loose system. The former is
generally admired and revered by the common people: the latter
is commonly more esteemed and adopted by what are called people
of fashion. The degree of disapprobation with which we ought to
mark the vices of levity, the vices which are apt to arise from great
prosperity, and from the excess of gaiety and good humour, seems
to constitute the principal distinction between those two opposite
schemes or systems. In the liberal or loose system, luxury, wanton
and even disorderly mirth, the pursuit of pleasure to some degree
of intemperance, the breach of chastity, at least in one of the two
sexes, &c. provided they are not accompanied with gross indecency,
and do not lead to falshood or injustice, are generally treated with
a good deal of indulgence, and are easily either excused or pardoned
altogether. In the austere system, on the contrary, those excesses
are regarded with the utmost abhorrence and detestation. The
vices of levity are always ruinous to the common people, and a
single week’s thoughtlessness and dissipation is often sufficient to
undo a poor workman for ever, and to drive him through despair
upon committing the most enormous crimes. The wiser and better
sort of the common people, therefore, have always the utmost ab-
horrence and detestation of such excesses, which their experience
tells them are so immediately fatal to people of their condition. The
disorder and extravagance of several years, on the contrary, will
not always ruin a man of fashion, and people of that rank are very
apt to consider the power of indulging in some degree of excess as
one of the advantages of their fortune, and the liberty of doing so
without censure or reproach, as one of the privileges which belong
I reads “of each sect.”
RELIGIOUS INSTRUCTION 747
to their station. In people of their own station, therefore, they re-
gard such excesses with but a small degree of disapprobation, and
censure them either very slightly or not at all.
Almost all religious sects have begun among the common people,
from whom they have generally drawn their earliest, as well as their
most numerous proselytes. The austere system of morality has, ac-
cordingly, been adopted by those sects almost constantly, or with
very few exceptions; for there have been some. It was the system
by which they 'could best recommend themselves to that order of
people to whom they first proposed their plan of reformation upon
what had been before established. Many of them, perhaps the
greater part of them, have even endeavoured to gain credit by re-
fining upon this austere system, and by carrying it to some degree
of folly and extravagance; and this excessive rigour has frequently
recommended them more than any thing else to the respect and
veneration of the common people.
A man of rank and fortune is by his station the distinguished
member of a great society, who attend to every part of his conduct,
and who thereby oblige him to attend to every part of it himself.
His authority and consideration depend very much upon the respect
which this society bears to him. He dare not do any thing which
would disgrace or discredit him in it, and he is obliged to a very
strict observation of that species of morals, whether liberal or aus-
tere, which the general consent of this society prescribes to persons
of his rank and fortune. A man of low condition, on the contrary,
is far from being a distinguished member of any great society.
While he remains in a country village his conduct may be attended
to, and he may be obliged to attend to it himself. In this situation,
and in this situation only, he may have what is called a character
to lose. But as soon as he comes into a great city, he is sunk in ob-
scurity and darkness. His conduct is observed and attended to by
nobody, and he is therefore very likely to neglect it himself, and to
abandon himself to every sort of low profligacy and vice. He never
emerges so effectually from this obscurity, his conduct never excites
so much the attention of any respectable society, as by his becom-
ing the member of a small religious sect. He from that moment ac-
quires a degree of consideration which he never had before. All his
brother sectaries are, for the credit of the sect, interested to observe
his conduct, and if he gives occasion to any scandal, if he deviates
very much from those austere morals which they almost always re-
quire of one another, to punish him by what is always a very severe
punishment, even where no civil effects attend it, expulsion or ex-
communication from the sect. In little religious sects, accordingly,
Religious
sects
usually
begin
with the
austere
system,
and in
small re-
ligious
sects
morals
are regu-
lar and
orderly
and even
disagree-
ably rig-
orous
and un-
social.
There are
two pos-
sible
remedies,
(i) the
require-
ment of a
knowl-
edge of
science
and phil-
osophy
from can-
didates
for pro-
fessions
and
offices;
and (2)
the en-
courage-
ment of
public
diver-
sions.
Where no
one rdi-
gion was
favoured
the sove-
74S the wealth of nations
the morals of the common people have been almost always remark-
ably regular and orderly; generally much more so than in the estab-
lished church. The morals of those little sects, indeed, have fre
quently been rather disagreeably rigorous and unsocial.
There are two very easy and effectual remedies, however, by
whose joint operation the state might, without violence, correct
whatever was unsocial or disagreeably rigorous in the morals of all
the little sects into which the country was divided.
The first of those remedies is the study of science and philos-
ophy, which the state might render almost universal among all peo
pie of middling or more than middling rank and fortune; not by
giving salaries to teachers in order to make them negligent and idle,
but by instituting some sort of probation, even in the higher and
more difficult sciences, to be undergone by every person before he
was permitted to exercise any liberal profession, or before he could
be received as a candidate for any honourable office of trust or
profit. If the state imposed upon this order of men the necessity of
learning, it would have no occasion to give itself any trouble about
providing them with proper teachers. They would soon find better
teachers for themselves than any whom the state could provide for
them. Science is the great antidote to the poison of enthusiasm and
superstition; and where aU the superior ranks of people were se-
cured from it, the inferior ranks could not be much exposed to it.
The second of those remedies is the frequency and gaiety of pub-
lic diversions. The state, by encouraging, that is by giving entire
liberty to all those who for their own interest would attempt, with-
out scandal or indecency, to amuse and divert the people by paint-
ing, poetry, music, dancing; by all sorts of dramatic representations
and exhibitions, would easily dissipate, in the greater part of them,
that melancholy and gloomy humour which is almost always the
nurse of popular superstition and enthusiasm. Public diversions
have always been the objects of dread and xiatred, to all the fanat-
ical promoters of those popular frenzies. The gaiety and good hum-
our which those diversions inspire were altogether inconsistent
with that temper of mind, which was fittest for their purpose, c
which they could best work upon. Dramatic representations besides,
frequently exposing their artifices to public ridicule, and sometimes
even to public execration, were upon that account, more than all
other diversions, the objects of their peculiar abhorrence.
In a country where the law favoured the teachers of no one re-
ligion more than those of another, it would not be necessary that
any of them should have any particular or immediate dependency
upon the sovereign or executive power; or that he should have any
RELIGIOUS INSTRUCTION 749
thing to do, either in appointing, or in dismissing them from their
offices. In such a situation he would have no occasion to give him-
self any concern about them, further than to keep the peace among
them, in the same manner as among the rest of his subjects; that is,
to hinder them from persecuting, abusing, or oppressing one an-
other. But it is quite otherwise in countries where there is an estab-
lished or governing religion. The sovereign can in this case never
be secure, unless he has the means of influencing in a considerable
degree the greater part of the teachers of that religion.
The clergy of every established church constitute a great incor-
poration. They can act in concert, and pursue their interest upon
one plan and with one spirit, as much as if they were under the di-
rection of one man; and they are frequently too under such direc-
tion. Their interest as an incorporated body is never the same with
that of the sovereign, and is sometimes directly opposite to it. Their
great interest is to maintain their authority with the people; and
this authority depends upon the supposed certainty and importance
of the whole doctrine which they inculcate, and upon the supposed
necessity of adopting every part of it with the most implicit faith,
in order to avoid eternal misery. Should the sovereign have the im-
prudence to appear either to deride or doubt himself of the most
trifling part of their doctrine, or from humanity attempt to protect
those who did either the one or the other, the punctilious honour
of a clergy who have no sort of dependency upon him, is immedi-
ately provoked to proscribe him as a profane person, and to em-
ploy all the terrors of religion in order to oblige the people to trans-
fer their allegiance to some more orthodox and obedient prince.
Should he oppose any of their pretensions or usurpations, the dan-
ger is equally great. The princes who have dared in this manner to
rebel against the church, over and above this crime of rebellion,
have generally been charged too with the additional crime of heresy,
notwithstanding their solemn protestations of their faith and hum-
ble submission to every tenet which she thought proper to prescribe
to them. But the authority of religion is superior to every other au-
thority. The fears which it suggests conquer all other fears. When
the authorised teachers of religion propagate through the great
body of the people doctrines subversive of the authority of the sov-
ereign, it is by violence only, or by the force of a standing army,
that he can maintain his authority. Even a standing army cannot
in this case give him any lasting security; because if the soldiers
are not foreigners, which can seldom be the case, but drawn from
the great body of the people, which must almost always be the case,
they are likely to be soon corrupted by those very doctrines. The
reign
would not
require
to influ-
ence the
teachers
of reli-
gion,
as he
must
where
there is
an estab-
lished
church,
since he
cannot
directly
oppose
the doc-
trines of
the
clergy.
The
clergy
hold their
benefices
for life,
and vio-
lence used
against
them
would be
ineffec-
tual; so
manage-
ment
must be
resorted
to.
750 THE WEALTH OF NATIONS
revolutions which the turbulence of the Greek clergy was continu-
ally occasioning at Constantinople, as long as the eastern empire
subsisted; the convulsions which, during the course of several cen-
turies, the turbulence of the Roman clergy was continually occa-
sioning in every part of Europe, sufficiently demonstrate how pre-
carious and insecure must always be the situation of the sovereign
who has no proper means of influencing the clergy of the established
and governing religion of his country.
Articles of faith, as well as all other spiritual matters, it is evi-
dent enough, are not within the proper department of a temporal
sovereign, who, though he may be very well qualified for protect-
ing, is seldom supposed to be so for instructing the people. With re-
gard to such matters, therefore, his authority can seldom be suffi-
cient to counterbalance the united authority of the clergy of the
established church. The public tranquillity, however, and his own
security, may frequently depend upon the doctrines which they may
think proper to propagate concerning such matters. As he can sel-
dom directly oppose their decision, therefore, with proper weight
and authority, it is necessary that he should be able to influence it;
and he can influence it only by the fears and expectations which he
may excite in the greater part of the individuals of the order. Those
fears and expectations may consist in the fear of deprivation or
other punishment, and in the expectation of further preferment.
In all Christian churches the benefices of the clergy are a sort of
freeholds which they enjoy, not during pleasure, but during life, or
good behaviour. If they held them by a more precarious tenure,
and were liable to be turned out upon every slight disobligation
either of the sovereign or of his ministers, it would perhaps be im-
possible for them to maintain their authority with the people, who
would then consider them as mercenary dependents upon the court,
in the sincerity of whose instructions they could no longer have any
confidence. But should the sovereign attempt irregularly, and by
violence, to deprive any number of clergymen of their freeholds, on
account, perhaps, of their having propagated, with more than or-
dinary zeal, some factious or seditious doctrine, he would only ren-
der, by such persecution, both them and their doctrine ten times
more popular, and therefore ten times more troublesome and dan-
gerous than they had been before. Fear is in almost all cases a
wretched instrument of government, and ought in particular never
to be employed against any order of men who have the smallest
pretensions to independency. To attempt to terrify them, serves
only to irritate their bad humour, and to confirm them in an oppo-
sition which more gentle usage perhaps might easily induce them.
RELIGIOUS INSTRUCTION 7Si
either to softeiij or to lay aside altogether. The violence which the
French government usually employed in order to oblige all their
parliaments, or sovereign courts of justice, to enregister any unpop-
ular edict, very seldom succeeded. The means commonly employed,
however, the imprisonment of all the refractory members, one
would think were forcible enough. The princes of the house of
Stewart sometimes employed the like means in order to influence
some of the members of the parliament of England; and they gen-
erally found them equally intractable. The parliament of England
is now managed in another manner; and a very small experiment,
which the duke of Choiseul made about twelve years ago upon the
parliament of Paris, demonstrated sufficiently that all the parlia-
ments of France might have been managed still more easily in the
same manner. That experiment was not pursued. For though man-
agement and persuasion are always the easiest and the safest in-
struments of government, as force and violence are the worst and
the most dangerous, yet such, it seems, is the natural insolence of
man, that he almost always disdains to use the good instrument,
except when he cannot or dare not use the bad one. The French
government could and durst use force, and therefore disdained to
use management and persuasion. But there is no order of men, it
appears, I believe, from the experience of all ages, upon whom it is
so dangerous, or rather so perfectly ruinous, to employ force and
violence, as upon the respected clergy of any established church.
The rights, the privileges, the personal liberty of every individual
ecclesiastic, who is upon good terms with his own order, are, even
in the most despotic governments, more respected than those of any
other person of nearly equal rank and fortune. It is so in every
gradation of despotism, from that of the gentle and mild govern-
ment of Paris, to that of the violent and furious government of
Constantinople. But though this order of men can scarce ever be
forced, they may be managed as easily as any other; and the secur-
ity of the sovereign, as well as the public tranquillity, seems to de-
pend very much upon the means which he has of managing them;
and those means seem to consist altogether in the preferment which
he has to bestow upon them.
In the ancient constitution of the Christian church,^^® the bish-
op of each diocese was elected by the joint votes of the clergy and
of the people of the episcopal city. The people did not long retain
their right of election; and while they did retain it, they almost al-
ways acted under the influence of the clergy, who in such spiritual
matters appeared to be their natural guides. The clergy, however.
Bishops
were
originally
elected by
the clergy
and
people,
after-
^‘®Ed. r reads “Roman catholic church.’
wards
by the
clergy
alone,
still later
to a large
extent by
the Pope.
This,
joined
with the
great
wealth of
the clergy,
rendered
them ex-
ceedingly
formid-
able.
752 the wealth of nations
soon grew weary of the trouble of managing them, and found it
easier to elect their own bishops themselves. The abbot, in the same
manner, was elected by the monks of the monastery, at least in the
greater part of abbacies. All the inferior ecclesiastical benefices
comprehended within the diocese were collated by the bishop, who
bestowed them upon such ecclesiastics as he thought proper. All
church preferments were in this manner in the disposal of the
church. The sovereign, though he might have some indirect influ-
ence in those elections, and though it was sometimes usual to ask
both his consent to elect, and his approbation of the election, yet
had no direct or sufficient means of managing the clergy. The ambi-
tion of every clergyman naturally led him to pay court, not so
much to his sovereign, as to his own order, from which only he
could expect preferment.
Through the greater part of Europe the Pope gradually drew to
himself first the collation of almost all bishoprics and abbacies, or
of what were called Consistorial benefices, and afterwards, by va-
rious machinations and pretences, of the greater part of inferior
benefices comprehended within each diocese; little more being left
to the bishop than what was barely necessary to give him a decent
authority with his own clergy. By this arrangement the condition
of the sovereign was still worse than it had been before. The clergy
of all the different countries of Europe were thus formed into a sort
of spiritual army, dispersed in different quarters, indeed, but of
which all the movements and operations could now be directed by
one head, and conducted upon one uniform plan. The clergy of
each particular country might be considered as a particular detach-
ment of that army, of which the operations could easily be sup-
ported and seconded by all the other detachments quartered in the
different countries round about. Each detachment was not only in-
dependent of the sovereign of the country in which it was quar-
tered, and by which it was maintained, but dependent upon a for-
eign sovereign, who could at any time turn its arms against the sov-
ereign of that particular country, and support them by the arms of
all the other detachments.
Those arms were the most formidable that can well be imagined.
In the ancient state of Europe, before the establishment of arts and
manufactures, the wealth of the clergy gave them the same sort of
influence over the common people, which that of the great barons
gave them over their respective vassals, tenants, and retainers. In
the great landed estates, which the mistaken piety both of princes
and private persons had bestowed upon the church, jurisdictions
were established of the same kind with those of the great barons;
RELIGIOUS INSTRUCTION 753
and for the same reason. In those great landed estates, the clergy,
or their bailiffs, could easily keep the peace without the support or
assistance either of the king or of any other person; and neither the
king nor any other person could keep the peace there without the
support and assistance of the clergy. The jurisdictions of the clergy,
therefore, in their particular baronies or manors, were equally in-
dependent, and equally exclusive of the authority of the king’s
courts, as those of the great temporal lords. The tenants of the
clergy were, like those of the great barons, almost all tenants at
will, entirely dependent upon their immediate lords, and therefore
liable to be called out at pleasure, in order to fight in any quarrel
in which the clergy might think proper to engage them. Over and
above the rents of those estates, the clergy possessed, in the tythes,
a very large portion of the rents of all the other estates in every
kingdom of Europe. The revenues arising from both those species
of rents were, the greater part of them, paid in kind, in corn, wine,
cattle, poultry, &c. The quantity exceeded greatly what the clergy
could themselves consume; and there were neither arts nor manu-
factures for the produce of which they could exchange the surplus.
The clergy could derive advantage from this immense surplus in no
other way than by employing it, as the great barons employed the
like surplus of their revenues, in the most profuse hospitality, and
in the most extensive charity. Both the hospitality and the charity
of the ancient clergy, accordingly, are said to have been very great,
They not only maintained almost the whole poor of every kingdom,
but many knights and gentlemen had frequently no other means of
subsistence than by travelling about from monastery to monastery,
under pretence of devotion, but in reality to enjoy the hospitality
of the clergy. The retainers of some particular prelates were often
as numerous as those of the greatest lay-lords; and the retainers of
all the clergy taken together were, perhaps, more numerous than
those of all the lay-lords. There was always much more union
among the clergy than among the lay-lords. The former were under
a regular discipline and subordination to the papal authority. The
latter were under no regular discipline or subordination, but almost
always equally jealous of one another, and of the king. Though the
tenants and retainers of the clergy, therefore, had both together
been less numerous than those of the great lay-lords, and their ten-
ants were probably much less numerous, yet their union would
have rendered them more formidable. The hospitality and charity
of the clergy too, not only gave them the command of a great temp-
oral force, but increased very much the weight of their spiritual
weapons. Those virtues procured them the highest respect and ven-
Benefit of
clergy and
other
privileges
were the
natural
result.
The
Church of
Rome in
the
Middle
Ages was
the most
formid-
able com-
bination
against
liberty,
reason
and hap-
piness.
754 THE WEALTH OF NATIONS
eration among all the inferior ranks of people, of whom many were
constantly, and almost all occasionally, fed by them. Every thing
belonging or related to so popular an order, its possessions, its priv-
ileges, its doctrines, necessarily appeared sacred in the eyes of the
common people, and every violation of them, whether real or pre-
tended, the highest act of sacrilegious wickedness and profaneness.
In this state of things, if the sovereign frequently found it difficult
to resist the confederacy of a few of the great nobility, we cannot
wonder that he should find it still more so to resist the united force
of the clergy of his own dominions, supported by that of the clergy
of all the neighbouring dominions. In such circumstances the won-
der is, not that he was sometimes obliged to yield, but that he ever
was able to resist.
The privileges of the clergy in those ancient times (which to us
who live in the present times appear the most absurd), their total
exemption from the secular jurisdiction, for example, or what in
England was called the benefit of clergy; were the natural or rather
the necessary consequences of this state of things. How dangerous
must it have been for the sovereign to attempt to punish a clergy-
man for any crime whatever, if his own order were disposed to pro-
tect him, and to represent either the proof as insufficient for con-
victing so holy a man, or the punishment as too severe to be in-
flicted upon one whose person had been rendered sacred by reli-
gion? The sovereign could, in such circumstances, do no better
than leave him to be tried by the ecclesiastical courts, who, for the
honour of their own order, were interested to restrain, as much as
possible, every member of it from committing enormous crimes, or
even from giving occasion to such gross scandal as might disgust
the minds of the people.
In the state in which things were through the greater part of
Europe during the tenth, eleventh, twelfth, and thirteenth centu-
ries, and for some time both before and after that period, the con-
stitution of the church of Rome may be considered as the most
formidable combination that ever was formed against the author-
ity and security of civil government, as well as against the liberty,
reason, and happiness of mankind, which can flourish only where
civil government is able to protect them. In that constitution the
grossest delusions of superstition were supported in such a manner
by the private interests of so great a number of people as put them
out of all danger from any assault of human reason: because
though human reason might perhaps have been able to unveil, even
to the eyes of the common people, some of the delusions of super-
stition; it could never have dissolved the ties of private interest.
RELIGIOUS INSTRUCTION 755
Had this constitution been attacked by no other enemies but the
feeble efforts of human reason, it must have endured for ever. But
that immense and well-built fabric, which all the wisdom and vir-
tue of man could never have shaken, much less have overturned,
was by the natural course of things, first weakened, and after-
wards in part destroyed, and is now likely, in the course of a few
centuries more, perhaps, to crumble into ruins altogether.
The gradual improvements of arts, manufactures, and com-
merce, the same causes which destroyed the power of the great bar-
ons, destroyed in the same manner, through the greater part of
Europe, the whole temporal power of the clergy. In the produce of
arts, manufactures, and commerce, the clergy, like the great bar-
ons, found something for which they could exchange their rude
produce, and thereby discovered the means of spending their whole
revenues upon their own persons, without giving any considerable
share of them to other people. Their charity became gradually less
extensive, their hospitality less liberal or less profuse. Their retain-
ers became consequently less numerous, and by degrees dwindled
away altogether. The clergy too, like the great barons, wished to
get a better rent from their landed estates, in order to spend it, in
the same manner, upon the gratification of their own private van-
ity and folly. But this increase of rent could be got only by grant-
ing leases to their tenants, who thereby became in a great measure
independent of them. The ties of interest, which bound the inferior
ranks of people to the clergy, were in this manner gradually broken
and dissolved. They were even broken and dissolved sooner than
those which bound the same ranks of people to the great barons:
because the benefices of the church being, the greater part of them,
much smaller than the estates of the great barons, the possessor of
each benefice was much sooner able to spend the whole of its rev-
enue upon his own person. During the greater part of the four-
teenth and fifteenth centuries the power of the great barons was,
through the greater part of Europe, in full vigour. But the temp-
oral power of the clergy, the absolute command which they had
once had over the great body of the people, was very much decay-
ed. The power of the church was by that time very nearly reduced
through the greater part of Europe to what arose from her spiritual
authority; and even that spiritual authority was much weakened
when it ceased to be supported by the charity and hospitality of the
clergy. The inferior ranks of people no longer looked upon that
order, as they had done before, as the comforters of their distress,
and the relievers of their indigence. On the contrary, they were pro-
Ed. I does not contsun “and.”
Itspow r
was de-
stroyed
by the
improve-
ment of
arts,
manufac-
tures and
com-
merce.
The sove-
reigns
endeav-
oured to
deprive
the Pope
of the
disposal
of the
great
benefices,
and suc-
ceeded,
especially
in France
and Eng-
land.
Ever since
the
French
clergy
have been
less de-
voted to
the Pope.
756 the wealth of nations
yoked and disgusted by the vanity, luxury, and expence of the
richer clergy, who appeared to spend upon their own pleasures
what had always before been regarded as the patrimony of the poor.
In this situation of things, the sovereigns in the different states
of Europe endeavoured to recover the influence which they had
once had in the disposal of the great benefices of the church, by
procuring to the deans and chapters of each diocese the restoration
of their ancient right of electing the bishop, and to the monks of
each abbacy that of electing the abbot. The re-establishing of this
ancient order was the object of several statutes enacted in England
during the course of the fourteenth century, particularly of what is
called the statute of provisors; and of the Pragmatic sanction
established in France in the fifteenth century. In order to render
the election valid, it was necessary that the sovereign should both
consent to it before-hand, and afterwards approve of the person
elected; and though the election was still supposed to be free, he
had, however, all the indirect means which his situation neces-
sarily afforded him, of influencing the clergy in his own dominions.
Other regulations of a similar tendency were established in other
parts of Europe. But the power of the pope in the collation of the
great benefices of the church seems, before the reformation, to have
been nowhere so effectually and so universally restrained as in
France and England. The Concordat afterwards, in the sixteenth
century, gave to the kings of France the absolute right of present-
ing to all the great, or what are called the consistorial benefices
of the Galilean church.^^®
Since the establishment of the Pragmatic sanction and of the
Concordat, the clergy of France have in general shown less respect
to the decrees of the papal court than the clergy of any other catho-
lic country. In all the disputes which their sovereign has had with
the pope, they have almost constantly taken party with the former.
This independency of the clergy of France upon the court of Rome,
seems to be principally founded upon the Pragmatic sanction and
the Concordat. In the earlier periods of the monarchy, the clergy
of France appear to have been as much devoted to the pope as
those of any other country. When Robert, the second prince of the
Capetian race, was most unjustly excommunicated by the court of
Rome, his own servants, it is said, threw the victuals which came
from his table to the dogs, and refused to taste any thing them-
selves which had been polluted by the contact of a person in his
These nine words are not in ed. i.
Ed. I reads “great and consistorial.”
Daniel, Histoire de France, 1755, tom. vii., pp. 158, 159; tom. ix., p. 40.
RELIGIOUS INSTRUCTION 757
situation.^'*^ They were taught to do so, it may very safely be pre-
sumed, by the clergy of his own dominions.
The claim of collating to the great benefices of the church, a
claim in defence of which the court of Rome had frequently shaken,
and sometimes overturned the thrones of some of the greatest sov-
ereigns in Christendom, was in this manner either restrained or
modified, or given up altogether, in many different parts of Europe,
even before the time of the reformation. As the clergy had now less
influence over the people, so the state had more influence over the
clergy. The clergy therefore had both less power and less inclina-
tion to disturb the state.
The authority of the church of Rome was in this state of de-
clension, when the disputes which gave birth to the reformation,
began in Germany, and soon spread themselves through every part
of Europe. The new doctrines were every where received with a
high degree of popular favour. They were propagated with all that
enthusiastic zeal which commonly animates the spirit of party,
when it attacks established authority. The teachers of those doc-
trines, though perhaps in other respects not more learned than
many of the divines who defended the established church, seem in
general to have been better acquainted with ecclesiastical history,
and with the origin and progress of that system of opinions upon
which the authority of the church was established, and they had
thereby some advantage in almost every dispute. The austerity of
their manners gave them authority with the common people, who
contrasted the strict regularity of their conduct with the disorderly
lives of the greater part of their own clergy. They possessed too in
a much higher degree than their adversaries, all the arts of popu-
larity and of gaining proselytes, arts which the lofty and dignified
sons of the church had long neglected, as being to them in a great
measure useless. The reason of the new doctrines recommended
them to some, their novelty to many; the hatred and contempt of
the established clergy to a still greater number; but the zealous,
passionate, and fanatical, though frequently coarse and rustic, elo-
quence with which they were almost every where inculcated, rec-
ommended them to by far the greatest number.
The success of the new doctrines was almost every where so
great, that the princes who at that time happened to be on bad
“II ne lui resta que deux domestiques pour le servir et lui preparer a
manger, encore faisaient-ils passer par le feu les plats ou il mangeait, et les
vases oil il buvait pour les purifier, comme ayant ete fouilles par un homme
retranche de la communion des fiddles.”— /hzW., tom. iii., pp. 305, 306. Re-
nault’s account is similar, Nouvel Ahrigi ckronologiquey 1768, tom. i., p.
114, A.D. 996.
So even
before the
Reforma-
tion the
clergy
had less
power
and incli-
nation to
disturb
the state.
The Re-
formation
doctrines
were re-
com-
mended
to the
common
people
by the
zeal of
their
teachers,
and en-
abled
sovereigns
on bad
terms
with
Rome to
overturn
the
Church
with
ease,
while in
countries
the sover-
eigns of
which
were
friendly
to Rome
the Re-
formation
was sup-
pressed or
ob-
structed.
In some
countries
758 THE WEALTH OF NATIONS
terms with the court of Rome, were by means of them easily en-
abled, in their own dominions, to overturn the church, which, hav-
ing lost the respect and veneration of the inferior ranks of people,
could make scarce any resistance. The court of Rome had dis-
obliged some of the smaller princes in the northern parts of Ger-
many, whom it had probably considered as too insignificant to be
worth the managing. They universally, therefore, established the
reformation in their own dominions. The tyranny of Christiern II.
and of Troll, archbishop of Upsal, enabled Gustavus Vasa to expel
them both from Sweden. The pope favoured the t 3 n:ant and the
archbishop, and Gustavus Vasa found no difficulty in establishing
the reformation in Sweden. Christiern 11. was afterwards deposed
from the throne of Denmark, where his conduct had rendered him
as odious as in Sweden. The pope, however, was still disposed to
favour him, and Frederic of Holstein, who had mounted the throne
in his stead, revenged himself by following the example of Gus-
tavus Vasa. The magistrates of Berne and Zurich, who had no par-
ticular quarrel with the pope, established with great ease the re-
formation in their respective cantons, where just before some of
the clergy had, by an imposture somewhat grosser than ordinary,
rendered the whole order both odious and contemptible.
In this critical situation of its affairs, the papal court was at
sufficient pains to cultivate the friendship of the powerful sover-
eigns of France and Spain, of whom the latter was at that time
emperor of Germany, With their assistance it was enabled, though
not without great difficulty and much bloodshed, either to suppress
altogether, or to obstruct very much the progress of the reforma-
tion in their dominions. It was well enough inclined too to be com-
plaisant to the king of England. But from the circumstances of the
times, it could not be so without giving offence to a still greater
sovereign, Charles V, king of Spain and emperor of Germany.
Henry VIII. accordingly, though he did not embrace himself the
greater part of the doctrines of the reformation, was yet enabled,
by their general prevalence, to suppress all the monasteries, and
to abolish the authority of the church of Rome in his dominions.
That he should go so far, though he went no further, gave some
satisfaction to the patrons of the reformation, who having got pos-
session of the government in the reign of his son and successor, com-
pleted without any difficulty the work which Henry VIII. had
begun.
In some countries, as in Scotland, where the government was
weak, unpopular, and not very firmly established, the reformation
"®Ed. I reads “by the general prevalence of those doctrines.”
RELIGIOUS INSTRUCTION 759
was strong enough to overturn, not only the church, but the state
likewise for attempting to support the church.
Among the followers of the reformation, dispersed in all the dif-
ferent countries of Europe, there was no general tribunal, which,
like that of the court of Rome, or an oecumenical council, could
settle all disputes among them, and with irresistible authority pre-
scribe to all of them the precise limits of orthodoxy. When the fol-
lowers of the reformation in one country, therefore, happened to
differ from their brethren in another, as they had no common judge
to appeal to, the dispute could never be decided; and many such
disputes arose among them. Those concerning the government of
the church, and the right of conferring ecclesiastical benefices, were
perhaps the most interesting to the peace and welfare of civil so-
ciety. They gave birth accordingly to the two principal parties or
sects among the followers of the reformation, the Lutheran and
Calvinistic sects, the only sects among them, of which the doctrine
and discipline have ever yet been established by law in any part of
Europe.
The followers of Luther, together with what is called the church
of England, preserved more or less of the episcopal government,
established subordination among the clergy, gave the sovereign the
disposal of all the bishoprics, and other consistorial benefices within
his dominions, and thereby rendered him the real head of the
church; and without depriving the bishop of the right of collating
to the smaller benefices within his diocese, they, even to those
benefices, not only admitted, but favoured the right of presentation
both in the sovereign and in all other lay patrons. This system of
church government was from the beginning favourable to peace
and good order, and to submission to the civil sovereign. It has
never, accordingly, been the occasion of any tumult or civil com-
motion in any country in which it has once been established. The
church of England in particular has always valued herself, with
great reason, upon the unexceptionable loyalty of her principles.
Under such a government the clergy naturally endeavour to rec-
ommend themselves to the sovereign, to the court, and to the no-
bility and gentry of the country, by whose influence they chiefly
expect to obtain preferment. They pay court to those patrons,
sometimes, no doubt, by the vilest flattery and assentation, but
frequently too by cultivating all those arts which best deserve,
and which are therefore most likely to gain them the esteem of
people of rank and fortune; by their knowledge in all the different
branches of useful and ornamental learning, by the decent liber-
ality of their manners, by the social good humour of their conversa-
the Re-
formation
over-
turned
both
church
and state.
The fol-
lowers of
the Re-
formation
had no
common
authority
like the
court of
Rome,
and di-
vided into
Lutherans
and Cal-
vinists.
The
Luther-
ans and
the
Church of
England
preferred
episco-
pacy, and
gave the
disposal
of bene-
fices to
the sover-
eign and
other lay
patrons.
Zwing-
lians and
Calvinists
gave the
right of
election
to the
people,
and
estab-
lished
equality
among
the clergy.
Election
by the
people
gave rise
to great
disorders,
760 THE WEALTH OF NATIONS
tion, and by their avowed contempt of those absurd and hypo-
critical austerities which fanatics inculcate and pretend to practise,
in order to draw upon themselves the veneration, and upon the
greater part of men of rank and fortune, who avow that they do not
practise them, the abhorrence of the common people. Such a clergy,
however, while they pay their court in this manner to the higher
ranks of life, are very apt to neglect altogether the means of main-
taining their influence and authority with the lower. They are lis-
tened to, esteemed and respected by their superiors; but before
their inferiors they are frequently incapable of defending, effectu-
ally and to the conviction of such hearers, their own sober and
moderate doctrines against the most ignorant enthusiast who chuses
to attack them.
The followers of Zuinglius, or more properly those of Calvin, on
the contrary, bestowed upon the people of each parish, whenever
the church became vacant, the right of electing their own pastor;
and established at the same time the most perfect equality among
the clergy. The former part of this institution, as long as it re-
mained in vigour, seems to have been productive of nothing but
disorder and confusion, and to have tended equally to corrupt the
morals both of the clergy and of the people. The latter part seems
never to have had any effects but what were perfectly agreeable.
As long as the people of each parish preserved the right of elect-
ing their own pastors, they acted almost always under the influence
of the clergy, and generally of the most factious and fanatical of
the order. The clergy, in order to preserve their influence in those
popular elections, became, or affected to become, many of them,
fanatics themselves, encouraged fanaticism among the people, and
gave the preference almost always to the most fanatical candidate.
So small a matter as the appointment of a parish priest occasioned
almost always a violent contest, not only in one parish, but in all
the neighbouring parishes, who seldom failed to take part in the
quarrel When the parish happened to be situated in a great city,
it divided all the inhabitants into two parties; and when that city
happened either to constitute itself a little republic, or to be the
head and capital of a little republic, as is the case with many of the
considerable cities in Switzerland and Holland, every paltry dis-
pute of this kind, over and above exasperating the animosity of all
their other factions, threatened to leave behind it both a new
schism in the church, and a new faction in the state. In those small
republics, therefore, the magistrate very soon found it necessary,
for the sake of preserving the public peace, to assume to himself
Eds. I and 2 read “take party.”
RELIGIOUS INSTRUCTION 76i
the right of presenting to all vacant benefices. In Scotland, the most
extensive country in which this presbyterian form of church gov-
ernment has ever been established, the rights of patronage were
in effect abolished by the act which established presbytery in the
beginning of the reign of William That act at least put it in
the power of certain classes of people in each parish, to pur-
chase, for a very small price, the right of electing their own pastor.
The constitution which this act established was allowed to subsist
for about two and twenty years, but was abolished by the loth of
queen Anne, ch. 12. on account of the confusions and disorders
which this more popular mode of election had almost every where
occasioned.^^"^ In so extensive a country as Scotland, however, a
tumult in a remote parish was not so likely to give disturbance to
government, as in a smaller state. The loth of queen Anne restored
the rights of patronage. But though in Scotland the law gives the
benefice without any exception to the person presented by the
patron; yet the church requires sometimes (for she has not in this
respect been very uniform in her decisions) a certain concurrence
of the people, before she will confer upon the presentee what is
called the cure of souls, or the ecclesiastical jurisdiction in the
parish. She sometimes at least, from an affected concern for the
peace of the parish, delays the settlement till this concurrence can
be procured. The private tampering of some of the neighbouring
clergy, sometimes to procure, but more frequently to prevent this
concurrence, and the popular arts which they cultivate in order to
enable them upon such occasions to tamper more effectually, are
perhaps the causes which principally keep up whatever remains
of the old fanatical spirit, either in the clergy or in the people of
Scotland.
The equality which the presbyterian form of church govern-
ment establishes among the clergy, consists, first, in the equality of
authority or ecclesiastical jurisdiction; and, secondly, in lie equal-
ity of benefice. In all presbyterian churches the equality of author-
ity is perfect: that of benefice is not so. The difference, however,
between one benefice and another, is seldom so considerable as
commonly to tempt tie possessor even of the small one to pay
“*The “Act concerning Patronages” sard of the second session of the
first parliament of William and Mary, is doubtless meant, but this is a ^pa-
rate Act from the “Act ratifying the Confession of Faith and settling Pres-
byterian Church Government,” Acts of the Parliaments of Scotland, 1822,
vol ix , pp. I 33 j 196- , , . o . „
The preamble of the Act mentions “the great hardship upon the patrons
as well as the “great heats and divisions”
““Ed I reads “small benefice”
and after
trial was
abolished
in Scot-
land,
though
the con-
currence
of the ^
people is
still re-
quired.
The
equality
of the
Presby-
terian
clergy
makes
them in-
dependent
and re-
spectable.
The medi-
ocrity of
their
benefices
gives
them in-
fluence
with the
common
people.
It also en-
ables the
universi-
ties to
762 the wealth oe nations
court to his patron, by the vile arts of flattery and assentation, in
order to get a better. In all the presbyterian churches, where the
rights of patronage are thoroughly established, it is by nobler and
better arts that the established clergy in general endeavour to
gain the favour of their superiors; by their learning, by the irre-
proachable regularity of their life, and by the faithful and diligent
discharge of their duty. Their patrons even frequently complain of
the independency of their spirit, which they are apt to construe
into ingratitude for past favours, but which at worst, perhaps, is
seldom any more than that indifference which naturally arises from
the consciousness that no further favours of the kind are ever to be
expected. There is scarce perhaps to be found any where in Eu-
rope a more learned, decent, independent, and respectable set of
men, than the greater part of the presbyterian clergy of Holland,
Geneva, Switzerland, and Scotland.
Where the church benefices are all nearly equal, none of them
can be very great, and this mediocrity of benefice, though it may
no doubt be carried too far, has, however, some very agreeable ef-
fects. Nothing but the most exemplary morals can give dignity to a
man of small fortune. The vices of levity and vanity necessarily
render him ridiculous, and are, besides, almost as ruinous to him as
they are to the common people. In his own conduct, therefore, he is
obliged to follow that system of morals which the common people
respect the most. He gains their esteem and affection by that plan
of life which his own interest and situation would lead him to fol-
low. The common people look upon him with that kindness with
which we naturally regard one who approaches somewhat to our
own condition, but who, we think, ought to be in a higher. Their
kindness naturally provokes his kindness. He becomes careful to
instruct them, and attentive to assist and relieve them. He does not
even despise the prejudices of people who are disposed to be so
favourable to him, and never treats them with those contemptuous
and arrogant airs which we so often meet with in the proud digni-
taries of opulent and well-endowed churches. The presbyterian
clergy, accordingly, have more influence over the minds of the
common people than perhaps the clergy of any other established
church. It is accordingly in presbyterian countries only that we
ever find the common people converted, without persecution, com-
pletely, and almost to a man, to the established church.
In countries where church benefices are the greater part of them
very moderate, a chair in a university is generally a better estab-
lishment than a church benefice. The universities have, in this case,
the picking and chusing of their members from all the churchmen
RELIGIOUS INSTRUCTION 7^3
of the country, who, in every country, constitute by far the most draw on
numerous class of men of letters. Where church benefices, on the
contrary, are many of them very considerable, the church natu- sors, who
rally draws from the universities the greater part of their eminent
men of letters; who generally find some patron who does himself
honour by procuring them church preferment. In the former situ- men of
ation we are likely to find the universities filled with the most
eminent men of letters that are to be found in the country. In the
latter we are likely to find few eminent men among them, and those
few among the youngest members of the society, who are likely too
to be drained away from it, before they can have acquired ex-
perience and knowledge enough to be of much use to it. It is ob-
served by Mr. de Voltaire, that father Porree, a jesuit of no great
eminence in the republic of letters, was the only professor they had
ever had in France whose works were worth the reading.^^^ In a
country which has produced so many eminent men of letters, it
must appear somewhat singular, that scarce one of them should
have been a professor in a university. The famous Gassendi was,
in the beginning of his life, a professor in the university of Aix.
Upon the first dawning of his genius, it was represented to him,
that by going into the church he could easily find a much more
quiet and comfortable subsistence, as well as a better situation for
pursuing his studies; and he immediately followed the advice. The
observation of Mr. de Voltaire may be applied, I believe, not only
to France, but to all other Roman catholic countries. We very
rarely find, in any of them, an eminent man of letters who is a pro-
fessor in a university, except, perhaps, in the professions of law
and physic; professions from which the church is not so likely to
draw them. After the church of Rome, that of England is by far
the richest and best endowed church in Christendom. In England,
accordingly, the church is continually draining the universities of
all their best and ablest members; and an old college tutor who is
known and distinguished in Europe as an eminent man of letters,
is as rarely to be found there as in any Roman catholic countr}.
In Geneva, on the contrary, in the protestant cantons of Switzer-
land, in the protestant countries of Germany, in Holland, in Scot-
land, in Sweden, and Denmark, the most eminent men of letters
whom those countries have produced, have, not all indeed, but the
“^Voltaire’s expression is not quite so strong as it is represented. He says
in the catalogue of writers in the Sikk de Louis XIV. ^ “Poree (Charles) ,
ne en Normandie en 1675, Jesuite, du petit nombre des professeurs qui ont
eu de la celebrite chez les gens du monde. Eloquent dans le gout de Seneque,
poete et tres bel esprit. Son plus grand merite fut de faire aimer les lettres
et la vertu a ses disciples. Mort en 1741.”
Eminent
men of
letters in
Greece
and Rome
were
mostly
teachers.
The re-
venue of
the
church
except
that part
which
arises
from en-
dowments
is a
branch of
that of
764 the wealth of nations
far greater part of them, been professors in universities. In those
countries the universities are continually draining the church of all
its most eminent men of letters.
It may, perhaps, be worth while to remark, that, if we except the
poets, a few orators, and a few historians, the far greater part of
the other eminent men of letters, both of Greece and Rome, appear
to have been either public or private teachers; generally either of
philosophy or of rhetoric. This remark will be found to hold true
from the days of Lysias and Isocrates, of Plato and Aristotle, down
to those of Plutarch and Epictetus, of Suetonius and Quintilian.^^®
To impose upon any man the necessity of teaching, year after
year, any particular branch of science, seems, in reality, to be the
most effectual method of rendering him completely master of it
himself. By being obliged to go every year over the same ground, if
he is good for any thing, he necessarily becomes, in a few years,
well acquainted with every part of it: and if upon any particular
point he should form too hasty an opinion one year, when he comes
in the course of his lectures to re-consider the same subject the year
thereafter, he is very likely to correct it.^®^ As to be a teacher of
science is certainly the natural employment of a mere man of let-
ters; so is it likewise, perhaps, the education which is most likely
to render him a man of solid learning and knowledge. The medi-
ocrity of church benefices naturally tends to draw the greater part
of men of letters, in the country where it takes place, to the em-
ployment in which they can be the most useful to the public, and,
at the same time, to give them the best education, perhaps, they are
capable of receiving. It tends to render their learning both as solid
as possible, and as useful as possible.
The revenue of every established church, such parts of it ex-
cepted as may arise from particular lands or manors, is a branch,
it ought to be observed, of the general revenue of the state, which
is thus diverted to a purpose very different from the defence of the
state. The tythe, for example, is a real land-tax, which puts it out
of the power of the proprietors of land to contribute so largely to-
wards the defence of the state as they otherwise might be able to
do. The rent of land, however, is, according to some, the sole fund,
and according to others, the principal fund, from which, in all great
monarchies, the exigencies of the state must be ultimately sup-
Quaere as to Suetonius. Ed. i continues here “Several of those whom
we do not know with certamty to have been public teachers appear to have
been private tutors. Polybius, we know, was private tutor to Scipio ^mili-
^us; Dionysius of Hahcamassus, there are some probable reasons for be-
lieving, was so to the children of Marcus and Quintus Cicero.”
The Lectures leave little doubt that this is a fragment of autobiography
RELIGIOUS INSTRUCTION 7^5
plied. The more of this fund that is given to the church, the less, it
is evident, can be spared to the state. It may be laid down as a cer-
tain maxim, that, all other things being supposed equal, the richer
the church, the poorer must necessarily be, either the sovereign on
the one hand, or the people on the other; and, in all cases, the less
able must the state be to defend itself. In several protestant coun-
tries, particularly in all the protestant cantons of Switzerland, the
revenue which anciently belonged to the Roman catholic church,
the tythes and church lands, has been found a fund sufficient, not
only to afford competent salaries to the established clergy, but to
defray, with little or no addition, all the other expences of the
state. The magistrates of the powerful canton of Berne, in par-
ticular, have accumulated out of the savings from this fund a very
large sum, supposed to amount to several millions, part of which is
deposited in a public treasure, and part is placed at interest in what
are called the public funds of the different indebted nations of Eu-
rope; chiefly in those of France and Great Britain. What may be
the amount of the whole expence which the church, either of Berne,
or of any other protestant canton, costs the state, I do not pretend
to know. By a very exact account it appears, that, in 1755, the
whole revenue of the clergy of the church of Scotland, including
their glebe or church lands, and the rent of their manses or dwell-
ing-houses, estimated according to a reasonable valuation, amount-
ed only to 68,514?. sd.3;^. This very moderate revenue affords
a decent subsistence to nine hundred and forty-four ministers.
The whole expence of the church, including what is occasionally
laid out for the building and reparation of churches, and of the
manses of ministers, cannot well be supposed to exceed eighty or
eighty-five thousand pounds a-year. The most opulent church in
Christendom does not maintain better the uniformity of faith, the
fervour of devotion, the spirit of order, regularity, and austere
morals in the great body of the people, than this very poorly en-
dowed church of Scotland, All the good effects, both civil and re-
ligious, which an established church can be supposed to produce,
are produced by it as completely as by any other. The greater part
of the protestant churches of Switzerland, which in general are not
better endowed than the church of Scotland, produce those effects
in a still higher degree. In the greater part of the protestant can-
tons, there is not a single person to be found who does not profess
himself to be of the established church. If he professes himself to
be of any other, indeed, the law obliges him to leave the canton.
But so severe, or rather indeed so oppressive a law, could never
have been executed in such free countries, had not the diligence of
the
state
In some
cantons
of Swit-
zerland
the old
revenue
of the
church
now
maintains
both
church
and state.
The
whole re-
venue of
the
Church oi
Scotland
is a tri-
fling
amount,
but that
church
produces
all pos-
sible good
effects.
This is
also true
in a still
higher
degree of
the Swiss
Protes-
tant
churches.
Large
revenue
is unsuit-
able to
the office
of
clergy-
men.
The ex-
pense of
support-
ing the
dignity
of the
sovereign
increases
as the ex-
penditure
of the
people
increases,
and is
greater in
amon-
766 XHE WEALTH OF NATIONS
the clergy before-hand converted to the established church the
whole body of the people, with the exception of, perhaps, a few in-
dividuals only. In some parts of Switzerland, accordingly, where,
from the accidental union of a protestant and Roman catholic
country, the conversion has not been so complete, both religions are
not only tolerated but established by law.
The proper performance of every service seems to require that its
pay or recompence should be, as exactly as possible, proportioned
to the nature of the service. If any service is very much under-paid,
it is very apt to suffer by the meanness and incapacity of the greater
part of those who are employed in it. If it is very much over-paid,
it is apt to suffer, perhaps, still more by their negligence and idle-
ness. A man of a large revenue, whatever may be his profession,
thinks he ought to live like other men of large revenues; and to
spend a great part of his time in festivity, in vanity, and in dissipa-
tion. But in a clergyman this train of life not only consumes the
time which ought to be employed in the duties of his function, but
in the eyes of the common people destroys almost entirely that sanc-
tity of character which can alone enable him to perform those du-
ties with proper weight and authority.
Part IV
Of the Expence of supporting the Dignity of the Sovereign
Over and above the expence necessary for enabling the sover-
eign to perform his several duties, a certain expence is requisite for
the support of his dignity. This expence varies both with the differ-
ent periods of improvement, and with the different forms of govern-
ment.
In an opulent and improved society, where all the different orders
of people are growing every day more expensive in their houses, in
their furniture, in their tables, in their dress, and in their equipage;
it cannot well be expected that the sovereign should alone hold out
against the fashion. He naturally, therefore, or rather necessarily
becomes more expensive in all those different articles too. His dig-
nity even seems to require that he should become so.
As in point of dignity, a monarch is more raised above his sub-
jects than the chief magistrate of any republic is ever supposed to
be above his fellow-citizens; so a greater expence is necessary for
Ed. s reads “expences but this seems to be a misprint or misreading
suggested by the fact that several expenses have been mentioned.
CONCLUSION 767
supporting that higher dignity. We naturally expect more splendor arch>
in the court of a king, than in the mansion-house of a doge or burgo-
master. ^
CONCLUSION
The expence of defending the society, and that of supporting the
dignity of the chief magistrate, are both laid out for the general
benefit of the whole society. It is reasonable, therefore, that they
should be defrayed by the general contribution of the whole society,
all the different members contributing, as nearly as possible, in pro-
portion to their respective abilities.
The expence of the administration of justice too, may, no doubt,
be considered as laid out for the benefit of the whole society. There
is no impropriety, therefore, in its being defrayed by the general
contribution of the whole society. The persons, however, who give
occasion to this expence are those who, by their injustice in one
way or another, make it necessary to seek redress or protection
from the courts of justice. The persons again most immediately
benefited by this expence, are those whom the courts of justice
either restore to their rights, or maintain in their rights. The ex-
pence of the administration of justice, therefore, may very properly
be defrayed by the particular contribution of one or other, or both
of those two different sets of persons, according as different occa-
sions may require, that is, by the fees of court. It cannot be neces-
sary to have recourse to the general contribution of the whole so-
ciety, except for the conviction of those criminals who have not
themselves any estate or fund sufficient for paying those fees.
Those local or provincial expences of which the benefit is local
or provincial (what is laid out, for example, upon the police of a
particular town or district) ought to be defrayed by a local or pro-
vincial revenue, and ought to be no burden upon the general rev-
enue of the society. It is unjust that the whole society should con-
tribute towards an expence of which the benefit is confined to a
part of the society.
The expence of maintaining good roads and communications is,
no doubt, beneficial to the whole society, and may, therefore, with-
out any injustice, be defrayed by the general contribution of the
whole society. This expence, however, is most immediately and di-
rectly beneficial to those who travel or carry goods from one place
to another, and to those who consume such goods. The turnpike
tolls in England, and the duties called peages in other countries, lay
it altogether upon those two different sets of people, and thereby
The ex-
pense of
defence
and of
maintain-
ing the
dignity
of the
sovereign
should be
paid by
general
contribu^
tion.
But the
expense
of justice
may be
defrayed
by fees of
court,
and ex-
penses of
local
benefit
ought to
be de-
frayed by
local
revenue.
The ex-
pense of
roads
may not
unjustly
be de-
frayed hy
general
contribu-
tion, but
better by
tolls.
The ex-
pense of
education
and reli-
gious in-
struction
may also
be de-
frayed by
general
contribu-
tion, but
better by
fees and
voluntary
contribu-
tion.
Any defi-
ciencies in
the re-
venue of
institu-
tions
beneficial
to the
whole so-
ciety must
be made
up by
general
contribu-
tion.
768 XHE WEALTH OF NATIONS
discharge the general revenue of the society from a very consider-
able burden.
The expence of the institutions for education and religious in-
struction, is likewise, no doubt, beneficial to the whole society, and
may, therefore, without injustice, be defrayed by the general con-
tribution of the whole society. This expence, however, might per-
haps with equal propriety, and even with some advantage, be de-
frayed altogether by those who receive the immediate benefit of
such education and instruction, or by the voluntary contribution of
those who think they have occasion for either the one or the other.
When the institutions or public works which are beneficial to the
whole society, either cannot be maintained altogether, or are not
maintained altogether by the contribution of such particular mem-
bers of the society as are most immediately benefited by them, the
deficiency must in most cases be made up by the general contribu-
tion of the whole society. The general revenue of the society, over
and above defraying the expence of defending the society, and of
supporting the dignity of the chief magistrate, must make up for
the deficiency of many particular branches of revenue. The sources
of this general or public revenue, I shall endeavour to explain in
the following chapter.
CHAPTER II
OF THE SOURCES OF THE GENERAL OR PUBLIC REVENUE
OF THE SOCIETY
The revenue which must defray, not only the expence of defending
the society and of supporting the dignity of the chief magistrate,
but all the other necessary expences of government, for which the
constitution of the state has not provided any particular revenue,
may be drawn, either, first, from some fund which peculiarly be-
longs to the sovereign or commonwealth, and which is independent
of the revenue of the people; or, secondly, from the revenue of the
people.
Part I
0/ the Funds or Sources of Revenue which muy peculiarly belong
to the Sovereign or Commonwealth
The funds or sources of revenue which may peculiarly belong to
the sovereign or commonwealth must consist, either in stock, or in
land.
The sovereign, like any other owner of stock, may derive a rev-
enue from it, either by employing it himself, or by lending it. His
revenue is in the one case profit, in the other interest.
The revenue of a Tartar or Arabian chief consists in profit. It
arises principally from the milk and increase of his own herds and
flocks, of which he himself superintends the management, and is
the principal shepherd or herdsman of his own horde or tribe. It is,
however, in this earliest and rudest state of civil government only
that profit has ever made the principal part of the public revenue
of a monarchical state.
Small republics have sometimes derived a considerable revenue
from the profit of mercantile projects. The republic of Hamburgh
is said to do so from the profits of a public wine cellar and apothe-
769
All rev-
enue
comes
from one
of two
sources:
(i) pro-
perty be-
longing to
the sover-
eign; {%)
the rev-
enue of
the
people.
The
property
may be in
stock or
land.
Revenue
from
stock may
be profit
or inter-
est.
Tartar
and Ara-
bian
chiefs
make pro-
fit from
herds and
flocks,
Hamburg
from a
wine cel-
lar and
apothe-
cary’s
shop, and
many
states
from
banks
and post
offices.
7/0 the WEALTjp OF NATIONS
Gary’s shop.^ The state cannot be very great of which the sovereign
has leisure to carry on the trade of a wine merchant or apothecary.
The profit of a public bank has been a source of revenue to more
considerable states. It has been so not only to Hamburgh, but to
Venice and Amsterdam. A revenue of this kind has even by some
people been thought not below the attention of so great an empire
as that of Great Britain. Reckoning the ordinary dividend of the
bank of England at five and a half per cent, and its capital at ten
millions seven hundred and eighty thousand pounds, the neat an-
nual profit, after paying the expence of management, must amount,
it is said, to five hundred and ninety-two thousand nine hundred
pounds. Government, it is pretended, could borrow this capital at
three per cent, interest, and by taking the management of the bank
into its own hands, might make a clear profit of two hundred and
sixty-nine thousand five hundred pounds a year. The orderly, vigi-
lant, and parsimonious administration of such aristocracies as those
of Venice and Amsterdam, is extremely proper, it appears from ex-
perience, for the management of a mercantile project of this kind.
But whether such a government as that of England; which, what-
ever may be its virtues, has never been famous for good ceconomy;
which, in time of peace, has generally conducted itself with the
slothful and negligent profusion that is perhaps natural to monarch-
ies; and in time of war has constantly acted with all the thought-
less extravagance that democracies are apt to fall into; could be
safely trusted with the management of such a project, must at least
be a good deal more doubtful.
The post office is properly a mercantile project. The government
advances the expence of establishing the different offices, and of
buying or hiring the necessary horses or carriages, and is repaid
with a large profit by the duties upon what is carried. It is perhaps
the only mercantile project which has been successfully managed
by, I believe, every sort of government. The capital to be advanced
^See Memoires concernant les Droits & Impositions en Europe, tome i.
page 73. This work was compiled by the order of the court for the use of a
commission employed for some years past in considering the proper means
for reforming the finances of France. The account of the French taxes, which
takes up three volumes in quarto, may be regarded as perfectly authentic.
That of those of other European nations was compiled from such informa-
tions as the French ministers at the different courts could procure. It is
much shorter, and probably not quite so exact as that of the French taxes.
The book is by Moreau de Beaumont, Paris, 1768-9, 4 vols. 4to. The coirect
title of voL i. is Memoires concernant ks Impositions et Droits en Europe;
vols. ii.-iv. are Mimoires concernant Us Impositions et Droits^ 2de. Ptie.,
Impositions et Droits en France. Smith obtained his copy through Turgot,
and attached great value to it, believing it to be very rare. See Bonar, Cata^
logue, p. 10.
FUNDS OF THE SOVEREIGN 77 i
is not very considerable. There is no mystery in the business. The
returns are not only certain, but immediate.
Princes, however, have frequently engaged in many other mer-
cantile projects, and have been willing, like private persons, to
mend their fortunes by becoming adventurers in the common
branches of trade. They have scarce ever succeeded. The profusion
with which the affairs of princes are aways managed, renders it al-
most impossible that they should. The agents of a prince regard the
wealth of their master as inexhaustible; are careless at which price
they buy; are eyeless at what price they sell; are careless at what
expence they transport his goods from one place to another. Those
agents frequently live with the profusion of princes, and sometimes
too, in spite of that profusion, and by a proper method of making up
their accounts, acquire the fortunes of princes. It was thus, as we
are told by Machiavel, that the agents of Lorenzo of Medicis, not a
prince of mean abilities, carried on his trade. The republic of Flor-
ence was several times obliged to pay the debt into which their ex-
travagance had involved him. He found it convenient, accordingly,
to give up the business of merchant, the business to which his fam-
ily had originally owed their fortune, and in the latter part of his
life to employ both what remained of that fortune, and the revenue
of the state of which he had the disposal, in projects and expences
more suitable to his station.^
No two characters seem more inconsistent than those of trader
and sovereign. If the trading spirit of the English East India com-
pany renders them very bad sovereigns; the spirit of sovereignty
seems to have rendered them equally bad traders. While they were
traders only, they managed their trade successfully, and were able
to pay from their profits a moderate dividend to the proprietors of
their stock. Since they became sovereigns, with a revenue which, it
is said, was originally more than three millions sterling, they have
been obliged to beg the extraordinary assistance of government in
order to avoid immediate bankruptcy.^ In their former situation,
their servants in India considered themselves as the clerks of mer-
chants: in their present situation, those servants consider them-
selves as the ministers of sovereigns.
A state may sometimes derive some part of its public revenue
from the interest of money, as well as from the profits of stock. If it
has amassed a treasure, it may lend a part of that treasure, either
to foreign states, or to its own subjects.
But gen-
erally
princes
are un-
successful
as traders.
The t\vo
charac-
ters are
inconsist-
ent.
Treasure
maybe
lent to
subjects
® Hist, of Florence^ bk. viii., ad fin.
Details are given above, p. 709, but that is in a passage which appears
first in ed. 3.
or foreign
states:
Berne
lends to
foreign
states,
Hamburg
has a
pawn-
shop,
Pennsyl-
vania lent
paper
money on
land se-
curity.
772 the wealth of nations
The canton of Berne derives a considerable revenue by lending
a part of its treasure to foreign states; that is, by placing it in the
public funds of the different indebted nations of Europe, chiefly in
those of France and England.^ The security of this revenue must
depend, first, upon the security of the funds in which it is placed, or
upon the good faith of the government which has the management
of them; and, secondly, upon the certainty or probability of the
continuance of peace with the debtor nation. In the case of a war,
the very first act of hostility, on the part of the debtor nation, might
be the forfeiture of the funds of its creditor. This policy of lending
money to foreign states is, so far as I know, peculiar to the canton
of Berne.
The city of Hamburgh ® has established a sort of public pawn-
shop, which lends money to the subjects of the state upon pledges
at six per cent, interest. This pawn-shop or Lombard, as it is called,
affords a revenue, it is pretended, to the state of a hundred and fifty
thousand crowns, which, at four-and-sixpence the crown, amounts
fo 33;7So^' sterling.
The government of Pennsylvania, without amassing any treasure,
invented a method of lending, not money indeed, but what is equiv-
alent to money, to its subjects. By advancing to private people, at
interest, and upon land security to double the value, paper bills of
credit to be redeemed fifteen years after their date, and in the mean
time made transferrable from hand to hand like bank notes, and de-
clared by act of assembly to be a legal tender in all payments from
one inhabitant of the province to another, it raised a moderate rev-
enue, which went a considerable way towards defraying an annual
expence of about 4,500^. the whole ordinary expence of that frugal
and orderly government. The success of an expedient of this kind
must have depended upon three different circumstances; first, upon
the demand for some other instrument of commerce, besides gold
and silver money; or upon the demand for such a quantity of con-
sumable stock, as could not be had without sending abroad the
greater part of their gold and silver money, in order to purchase it;
secondly, upon the good credit of the government which made use
of this expedient; and, thirdly, upon the moderation with which it
was used, the whole value of the paper bills of credit never exceed-
ing that of the gold and silver money which would have been neces-
sary for carrying on their circulation, had there been no paper bills
of credit. The same expedient was upon different occasions adopted
* Above, p. 765.
®See Memoires concemant les Droits & Impositions en Europe; tome i.
P. 73.
FUNDS OF THE SOVEREIGN 773
by several other American colonies: but, from want of this modera-
tion, it produced, in the greater part of them, much more disorder
than conveniency.
The unstable and perishable nature of stock and credit, however,
render them unfit to be trusted to, as the principal funds of that
sure, steady and permanent revenue, which can alone give security
and dignity to government. The government of no great nation, that
was advanced beyond the shepherd state, seems ever to have de-
rived the greater part of its public revenue from such sources.
Land is a fund of a more stable and permanent nature; and the
rent of public lands, accordingly, has been the principal source of
the public revenue of many a great nation that was much advanced
beyond the shepherd state. From the produce or rent of the public
lands, the ancient republics of Greece and Italy derived, for a long
time, the greater part of that revenue which defrayed the necessary
expences of the commonwealth. The rent of the crown lands con-
stituted for a long time the greater part of the revenue of the an-
cient sovereigns of Europe.
War and the preparation for war, are the two circumstances
which in modern times occasion the greater part of the necessary ex-
pence of all great states. But in the ancient republics of Greece and
Italy every citizen was a soldier, who both served and prepared
himself for service at his own expence. Neither of those two circum-
stances, therefore, could occasion any very considerable expence to
the state. The rent of a very moderate landed estate might be fully
sufficient for defraying all the other necessary expences of govern-
ment.
In the ancient monarchies of Europe, the manners and customs
of the times sufficiently prepared the great body of the people for
war; and when they took the field, they were, by the condition of
their feudal tenures, to be maintained, either at their own expence,
or at that of their immediate lords, without bringing any new charge
upon the sovereign. The other expences of government were, the
greater part of them, very moderate. The administration of justice,
it has been shown, instead of being a cause of expence, was a source
of revenue. The labour of the country people, for three days before
and for three days after harvest, was thought a fund sufficient for
making and maintaining all the bridges, highways, and other public
works which the commerce of the country was supposed to require.
In those days the principal expence of the sovereign seems to have
consisted in the maintenance of his own family and houshold. The
officers of his houshold, accordingly were then the great officers of
state. The lord treasurer received his rents. The lord steward and
No great
revenue
can be de-
rived
from such
a source.
Revenue
from land
is much
more im-
portant,
especially
when war
cost little,
as in
ancient
Greece
and Italy,
and in
feudal
times,
when all
expenses
were
small.
The pres-
ent rent
of all the
land in
the coun-
try would
not suf-
fice for
the ordi-
nary ex-
penditure
774 THE WEALTH OF NATIONS
lord chamberlain looked after the expence of his family. The care
of his stables was committed to the lord constable and the lord
marshal. His houses were all built in the form of castles, and seem to
have been the principal fortresses which he possessed. The keepers
of those houses or castles might be considered as a sort of military
governors. They seem to have been the only military officers whom
it was necessary to maintain in time of peace. In these circum-
stances the rent of a great landed estate might, upon ordinary occa-
sions, very well defray all the necessary expences of government.
In the present state of the greater part of the civilized monarchies
of Europe, the rent of all the lands in the country, managed as they
probably would be if they all belonged to one proprietor, would
scarce perhaps amount to the ordinary revenue which they levy
upon the people even in peaceable times. The ordinary revenue of
Great Britain, for example, including not only what is necessary for
defraying the current expence of the year, but for paying the inter-
est of the public debts, and for sinking a part of the capital of those
debts, amounts to upwards of ten millions a year. But the land tax,
at four shillings in the pound, falls short of two millions a year.
This land tax, as it is called, however, is supposed to be one-fifth,
not only of the rent of all the land, but of that of all the houses, and
of the interest of all the capital stock of Great Britain, that part of
it only excepted which is either lent to the public, or employed as
farming stock in the cultivation of land. A verv considerable part
of the produce of this tax arises from the rent of houses, and the in-
terest of capital stock. The land-tax of the city of London, for ex-
ample, at four shillings in the pound, amounts to 123,399/!. 6^. yrf.
That of the city of Westminster, to 63,092^. $d. That of the pal-
aces of Whitehall and St. James’s, to 30,754^. 6^. 3^.® A certain pro-
portion of the land-tax is in the same manner assessed upon all the
other cities and towns corporate in the kingdom, and arises almost
altogether, either from the rent of houses, or from what is supposed
to be the interest of trading and capital stock. According to the es-
timation, therefore, by which Great Britain is rated to the land-tax,
the whole mass of revenue arising from the rent of all the lands,
from that of all the houses, and from the interest of all the capital
stock, that part of it only excepted which is either lent to the public,
or employed in the cultivation of land, does not exceed ten millions
sterling a year, the ordinary revenue which government levies upon
the people even in peaceable times. The estimation by which Great
Britain is rated to the land-tax is, no doubt, taking the whole king-
dom at an average, very much below the real value; though in sev-
® The figures are those of the Land Tax Acts.
FUNDS OF THE SOVEREIGN 775
eral particular counties and districts it is said to be nearly equal to
that value. The rent of the lands alone, exclusive of that of houses,
and of the interest of stock, has by many people been estimated at
twenty millions, an estimation made in a great measure at random,
and which, I apprehend, is as likely to be above as below the truth.'^
But if the lands of Great Britain, in the present state of their culti-
vation, do not afford a rent of more than tw^enty millions a year,
they could not well afford the half, most probably not the fourth
part of that rent, if they all belonged to a single proprietor, and
were put under the negligent, expensive, and oppressive manage-
ment of his factors and agents. The crown lands of Great Britain
do not at present afford the fourth part of the rent, which could
probably be drawn from them if they were the property of private
persons. If the crown lands were more extensive, it is probable they
would be still worse managed.
The revenue which the great body of the people derives from
land is in proportion, not to the rent, but to the produce of the land.
The whole annual produce of the land of every country, if we except
what is reserved jor seed, is either annually consumed by the great
body of the people, or exchanged for something else that is con-
sumed by them. Whatever keeps down the produce of the land be-
low what it would otherwise rise to, keeps down the revenue of the
great body of the people, still more than it does that of the pro-
prietors of land. The rent of land, that portion of the produce which
belongs to the proprietors, is scarce an3rwhere in Great Britain sup-
posed to be more lian a third part of the whole produce. If the land,
which in one state of cultivation affords a rent of ten millions ster-
ling a year, would in another afford a rent of twenty millions; the
rent being, in both cases, supposed a third part of the produce; the
revenue of the proprietors would be less than it otherwise might
be by ten millions a year only; but the revenue of the great body of
the people would be less than it otherwise might be by thirty mil-
lions a year, deducting only what would be necessary for seed. The
population of the country would be less by the number of people
which thirty millions a year, deducting always the seed, could main-
tain, according to the particular mode of living and expence which
might take place in the different ranks of men among whom the re-
mainder was distributed.
Though there is not at present, in Europe, any civilized state of
any kind which derives the greater part of its public revenue from
the rent of lands which are the property of the state; yet, in all the
but if the
whole of
the land
of the
country
were
under the
extrava-
gant man-
agement
of the
state, the
rent
would be
much re-
duced,
and the
revenue
of the
people
would be
reduced
by a still
greater
amount.
The sale
of crown
lands
would
^ See on these estimates Sir Robert Giffen, Growth of Capital, 1889, pp.
89, 90.
benefit
both
sovereign
and
people.
The rev-
enue from
crown
lands
costs the
people
more than
any other.
Public
parks,
etc., are
the only
lands
which
should
belong to
the sover-
eign.
The
greater
part of
776 the wealth of nations
great monarchies of Europe, there are still many large tracts of land
which belong to the crown. They are generally forest; and some-
times forest where, after travelling several miles, you will scarce
find a single tree; a mere waste and loss of country in respect both
of produce and population. In every great monarchy of Europe the
sale of the crown lands would produce a very large sum of money,
which, if applied to the payment of the public debts, would deliver
from mortgage a much greater revenue than any which those lands
have ever afforded to the crown. In countries where lands, improved
and cultivated very highly, and yielding at the time of sale as great
a rent as can easily be got from them, commonly sell at thirty years
purchase; the unimproved, uncultivated, and low-rented crown
lands might well be expected to sell at forty, fifty, or sixty years
purchase. The crown might immediately enjoy the revenue which
this great price would redeem from mortgage. In the course of a few
years it would probably enjoy another revenue. When the crown
lands had become private property, they would, in the course of a
few years, become well-improved and well-cultivated. The increase
of their produce would increase the population of the country, by
augmenting the revenue and consumption of the people. But the
revenue which the crown derives from the duties of customs and ex-
cise, would necessarily increase with the revenue and consumption
of the people.
The revenue which, in any civilized monarchy, the crown derives
from the crown lands, though it appears to cost nothing to individ-
uals, h reality costs more to the society than perhaps any other
equal revenue which the crown enjoys. It would, in all cases, be for
the Interest of the society to replace this revenue to the crown by
some other equal revenue, and to divide the lands among the peo-
ple, which could not well be done better, perhaps, than by exposing
them to public sale.
Lands, for the purposes of pleasure and magnificence, parks, gar-
dens, public walks, &c. possessions which are every where consid-
ered as causes of expence, not as sources of revenue, seem to be the
only lands which, in a great and civilized monarchy, ought to belong
to the crown.
Public stock and public lands, therefore, the two sources of rev-
enue which may peculiarly belong to the sovereign or common-
wealth, being both improper and insufficient funds for defraying the
necessary expence of any great and civilized state; it remains that
this expence must, the greater part of it, be defrayed by taxes of
one kind or another; the people contributing a part of their own
TAXES 777
private revenue in order to make up a public revenue to the sover-
eign or commonwealth.
Part II
Of Taxes
The private revenue of individuals, it has been shewn in the first
book of this Inquiry, arises ultimately from three different sources;
Rent, Profit, and Wages. Every tax must finally be paid from some
one or other of those three different sorts of revenue, or from all of
them indifferently. I shall endeavour to give the best account I can,
first, of those taxes which, it is intended, should fall upon rent; sec-
ondly, of those which, it is intended, should fall upon profit; third-
ly, of those which, it is intended, should fall upon wages; and,
fourthly, of those which, it is intended, should fall indifferently
upon all those three different sources of private revenue. The par-
ticular consideration of each of these four different sorts of taxes
will divide the second part of the present chapter into four articles,
three of which will require several other subdivisions, hlany of
those taxes, it will appear from the following review, are not finally
paid from the fund, or source of revenue, upon which it was intend-
ed they should fall.
Before I enter upon the examination of particular taxes, it is nec-
essary to premise the four following maxims with regard to taxes in
general.
1. The subjects of every state ought to contribute towards the
support of the government, as nearly as possible, in proportion to
their respective abilities; that is, in proportion to the revenue which
they respectively enjoy under the protection of the state. The ex-
pence of government to the individuals of a great nation, is like the
expence of management to the joint tenants of a great estate, who
are all obliged to contribute in proportion to their respective inter-
ests in the estate. In the observation or neglect of this maxim con-
sists, what is called the equality or inequality of taxation. Every
tax, it must be observed once for all, which falls finally upon one
only of the three sorts of revenue above mentioned, is necessarily
unequal, in so far as it does not affect the other two. In the follow-
ing examination of different taxes I shall seldom take much further
notice of this sort of inequality, but shall, in most cases, confine my
observations to that inequality which is occasioned by a particular
tax falling unequally even upon that particular sort of private rev-
enue which is affected by it.
the sover-
eign’s ex-
pense
must be
defrayed
by taxes.
Taxes
may be
intended
to fall on
rent, pro-
fit, or
wages, or
upon all
three
sorts of
revenue.
There are
four
maxims
with re-
gard to
taxes in
general,
(i) equal-
ity,
(2) cer-
tainty.
(3) con-
venience
of pay-
ment,
and (4)
economy
in collec-
tion,
77S THE WEALTH OF NATIONS
II. The tax which each individual is bound to pay ought to be
certain, and not arbitrary. The time of payment, the manner of
pa 5 nnent, the quantity to be paid, ought all to be clear and plain to
the contributor, and to every other person. Where it is otherwise,
every person subject to the tax is put more or less in the power of
the tax-gatherer, who can either aggravate the tax upon any ob-
noxious contributor, or extort, by the terror of such aggravation,
some present or perquisite to himself. The uncertainty of taxation
encourages the insolence and favours the corruption of an order of
men who are naturally unpopular, even where they are neither in-
solent nor corrupt. The certainty of what each individual ought to
pay is, in taxation, a matter of so great importance, that a very con-
siderable degree of inequality, it appears, I believe, from the experi-
ence of all nations, is not near so great an evil as a very small degree
of uncertainty.
III. Every tax ought to be levied at the time, or in the manner,
in which it is most likely to be convenient for the contributor to pay
it. A tax upon the rent of land or of houses, payable at the same
term at which such rents are usually paid, is levied at the time when
it is most likely to be convenient for the contributor to pay; or,
when he is most likely to have wherewithal to pay. Taxes upon such
consumable goods as are articles of luxury, are all finally paid by
the consumer, and generally in a manner that is very convenient
for him. He pays them by little and little, as he has occasion to buy
the goods. As he is at liberty too, either to buy, or not to buy, as he
pleases, it must be his own fault if he ever suffers any considerable
inconveniency from such taxes.
IV. Every tax ought to be so contrived as both to take out and to
keep out of the pockets of the people as little as possible, over and
above what it brings into the public treasury of the state. A tax may
either take out or keep out of the pockets of the people a great deal
more than it brings into the public treasury, in the four following
ways. First, the levying of it may require a great number of officers,
whose salaries may eat up the greater part of the produce of the tax,
and whose perquisites may impose another additional tax upon the
people. Secondly, it may obstruct the industry of the people, and
discourage them from applying to certain branches of business
which might give maintenance and employment to great multitudes.
While it obliges the people to pay, it may thus diminish, or perhaps
destroy, some of the funds which might enable them more easily to
do so. Thirdly, by the forfeitures and other penalties which those
unfortunate individuals incur who attempt unsuccessfully to evade
the tax, it may frequently ruin them, and thereby put an end to the
TAXES ON THE RENT OF LAND 779
benefit which the community might have received from the employ-
ment of their capitals. An injudicious tax offers a great temptation
to smuggling. But the penalties of smuggling must rise in propor-
tion to the temptation. The law, contrary to all the ordinary prin-
ciples of justice, first creates the temptation, and then punishes
those who yield to it; and it commonly enhances the punishment
too in proportion to the very circumstance which ought certainly to
alleviate it, the temptation to commit the crime.^ Fourthly, by sub-
jecting the people to the frequent visits and the odious examination
of the tax-gatherers, it may expose them to much unnecessary
trouble, vexation, and oppression; and though vexation is not,
strictly speaking, expence, it is certainly equivalent to the expence
at which every man would be willing to redeem himself from it. It is
in some one or other of these four different ways that taxes are fre-
quently so much more burdensome to the people than they are bene-
ficial to the sovereign.
The evident justice and utility of the foregoing maxims have rec-
ommended them more or less to the attention of all nations. All na-
tions have endeavoured, to the best of their judgment, to render
their taxes as equal as they could contrive; as certain, as conven-
ient to the contributor, both in the time and in the mode of pay-
ment, and in proportion to the revenue which they brought to the
prince, as little burdensome to the people.^ The following short re-
view of some of the principal taxes which have taken place in dif-
ferent ages and countries will show, that the endeavours of all na-
tions have not in this respect been equally successful.
Article I
Taxes upon Rent, Taxes upon the Rent of Land
A TAX upon the rent of land may either be imposed according to a
^ See Sketches of the History of Man 1774, by Henry Home, Lord Karnes,
vol. i. page 474 & seq. This author at the place quoted gives six “general
rules” as to taxation:—
1. “That wherever there is an opportunity of smuggling taxes ought to be
moderate.”
2. “That taxes expensive in the levying ought to be avoided.”
3. “To avoid arbitrary taxes.” _
4. “To remedy” inequality of riches “as much as posable, by relieving the
poor and burdening the rich.”
5. “That every tax which tends to impoverish the nation ought to be re-
jected with indignation,”
6. “To avoid taxes that require the oath of party.”
^ In ed. I “as they could contrive” comes here instead of three lines earlier.
which
have re-
com-
mended
them-
selves to
all na-
tions.
A tax on
the rent
of land
may be on
a constant
or vari-
able valu-
ation.
If on a
constant
valuation
it be-
comes un-
equal, like
the Brit-
ish land
tax.
Circum-
stances
have
made the
780 XHE WEALTH OF NATIONS
certain canon, every district being valued at a certain rent, which
valuation is not afterwards to be altered; or it may be imposed in
such a manner as to vary with every variation in the real rent of the
land, and to rise or fall with the improvement or declension of its
cultivation.
A land-tax which, like that of Great Britain, is assessed upon
each district according to^^ a certain invariable canon, though it
should be equal at the time of its first establishment, necessarily be-
comes unequal in process of time, according to the unequal degrees
of improvement or neglect in the cultivation of the different parts of
the country. In England, the valuation according to which the dif-
ferent counties and parishes were assessed to the land-tax by the
4th of William and Mary was very unequal even at its first estab-
lishment. This tax, therefore, so far offends against the first of the
four maxims above-mentioned. It is perfectly agreeable to the other
three. It is perfectly certain. The time of payment for the tax, being
the same as that for the rent, is as convenient as it can be to the con-
tributor. Though the landlord is in all cases the real contributor,
the tax is commonly advanced by the tenant, to whom the landlord
is obliged to allow it in the payment of the rent. This tax is levied
by a much smaller number of officers than any other which affords
nearly the same revenue. As the tax upon each district does not rise
with the rise of the rent, the sovereign does not share in the profits
of the landlord’s improvements. Those improvements sometimes
contribute, indeed, to the discharge of the other landlords of the
district. But the aggravation of the tax, which this may sometimes
occasion upon a particular estate, is always so very small, that it
never can discourage those improvements,^^ nor keep down the
produce of the land below what it would otherwise rise to. As it has
no tendency to diminish the quantity, it can have none to raise the
price of that produce. It does not obstruct the industry of the peo-
ple. It subjects the landlord to no other inconveniency besides the
unavoidable one of paying the tax.
The advantage, however, which the landlord has derived from the
invariable constancy of the valuation by which all the lands of
Great Britain are rated to the land-tax, has been principally owing
“ Ed. I reads “is imposed according to.” For the origin of the stereotyped
assessment of the land tax, see Cannan, Hist, of Local Rates in England^
1896, pp. 114-119.
Ed. 2 reads “They contribute.”
“Ed. I, beginning after “the same revenue,” six lines higher up, reads “As
the tax does not rise with the rise of the rent, the sovereign does not share
in the profits of the landlord’s improvements. The tax therefore does not
discourage those improvements.”
TAXES ON THE RENT OF LAND 78l
to some circumstances altogether extraneous to the nature of the
tax.
It has been owing in part to the great prosperity of almost every
part of the country, the rents of almost all the estates of Great Brit-
ain having, since the time w^hen this valuation was first established,
been continually rising, and scarce any of them having fallen. The
landlords, therefore, have almost all gained the difference between
the tax which they would have paid, according to the present rent
of their estates, and that which they actually pay according to the
ancient valuation. Had the state of the country been different, had
rents been gradually falling in consequence of the declension of cul-
tivation, the landlords would almost all have lost this difference. In
the state of things which has happened to take place since the revo-
lution, the constancy of the valuation has been advantageous to the
landlord and hurtful to the sovereign. In a different state of things
it might have been advantageous to the sovereign and hurtful to the
landlord.
As the tax is made payable in money, so the valuation of the land
is expressed in money. Since the establishment of this valuation the
value of silver has been pretty uniform, and there has been no al-
teration in the standard of the coin either as to weight or fineness.
Had silver risen considerably in its value, as it seems to have done
in the course of two centuries which preceded the discovery of
the mines of America, the constancy of the valuation might have
proved very oppressive to the landlord. Had silver fallen consider-
ably in its value, as it certainly did for about a century at least
after the discovery of those mines, the same constancy of valuation
would have reduced very much this branch of the revenue of the
sovereign. Had any considerable alteration been made in the stand-
ard of the money, either by sinking the same quantity of silver to a
lower denomination, or by raising it to a higher; had an ounce of
silver, for example, instead of being coined into five shillings and
twopence, been coined, either into pieces which bore so low a de-
nomination as two shillings and seven-pence, or into pieces which
bore so high a one as ten shillings and four-pence, it would in the
one case have hurt the revenue of the proprietor, in the other that
of the sovereign.
In circumstances, therefore, somewhat different from those which
have actually taken place, this constancy of valuation mighty have
been a very great inconveniency, either to the contributors, or to
the commonwealth. In the course of ages such circumstances, how-
ever, must, at some time or other, happen. But though empires, like
all the other works of men, have all hitherto proved mortal, jet
constant
valuation
favour-
able to
the Brit-
ish land-
lords, the
country
having
prospered
and rents
risen,
and the
value of
money
and silver
remained
uniform.
The con-
stancy of
valuation
might
have been
very in-
conve-
nient to
one or
other of
the
parties.
The
French
econo-
mists re-
commend
a tax
varying
with the
rent.
In the
Venetian
territory
rented
lands are
taxed 10
per cent,
and lands
cultivated
by the
proprie-
tor 8 per
cent.
Such a
land tax
is more
equal but
is not so
certain,
and is
more
trouble-
some and
expensive
than the
British.
The un-
certainty
782 the wealth of nations
every empire aims at immortality. Every constitution, therefore,
which it is meant should be as permanent as the empire itself, ought
to be convenient, not in certain circumstances only, but in all cir-
cumstances; or ought to be suited, not to those circumstances which
are transitory, occasional, or accidental, but to those which are nec-
essary and therefore always the same.
A tax upon the rent of land which varies with every variation of
the rent, or which rises and falls according to the improvement or
neglect of cultivation, is recommended by that sect of men of letters
in France, who call themselves the (economists, as the most equit-
able of all taxes. All taxes, they pretend, fall ultimately upon the
rent of land, and ought therefore to be imposed equally upon the
fund which must finally pay them. That all taxes ought to fall as
equally as possible upon the fund which must finally pay them, is
certaidy true. But without entering into the disagreeable discussion
of the metaphysical arguments by which they support their very in-
genious theory, it will sufficiently appear, from the following review,
what are the taxes which fall finally upon the rent of the land, and
what are those which fall finally upon some other fund.
In the Venetian territory all the arable lands which are given in
lease to farmers are taxed at a tenth of the rent.^^ The leases are re-
corded in a public register which is kept by the officers of revenue
in each province or district. When the proprietor cultivates his own
lands, they are valued according to an equitable estimation, and he
is allowed a deduction of one-fifth of the tax, so that for such lands
he pays only eight instead of ten per cent, of the supposed rent.
A land-tax of this kind is certainly more equal than the land-tax
of England. It might not, perhaps, be altogether so certain, and the '
assessment of the tax might frequently occasion a good deal more
trouble to the landlord. It might too be a good deal more expensive
in the levying.
Such a system of administration, however, might perhaps be con-
trived as would, in a great measure, both prevent this uncertainty
and moderate this expence.
The landlord and tenant, for example, might jointly be obliged to
record their lease in a public register. Proper penalties might be
enacted against concealing or misrepresenting any of the condi-
tions; and if part of those penalties were to be paid to either of the
two parties who informed against and convicted the other of such
concealment or misrepresentation, it would effectually deter them
from combining together in order to defraud the public revenue. All
“Memoires concemant les Droits tom. i. p. 240, 241.
TAXES ON THE RENT OF LAND 7^3
the conditions of the lease might be sufficiently known from such a
record.
Some landlords, instead of raising the rent, take a fine for the re-
newal of the lease. This practice is in most cases the expedient of a
spendthrift, who for a sum of ready money sells a future revenue of
much greater value. It is in most cases, therefore, hurtful to the
landlord. It is frequently hurtful to the tenant, and it is always
hurtful to the community. It frequently takes from the tenant so
great a part of his capital, and thereby diminishes so much his
ability to cultivate the land, that he finds it more difficult to pay a
small rent than it would otherwise have been to pay a great one.
Whatever diminishes his ability to cultivate, necessarily keeps
down, below what it would otherwise have been, the most impor-
tant part of the revenue of the community. By rendering the tax
upon such fines a good deal heavier than upon the ordinary rent,
this hurtful practice might be discouraged, to the no small ad-
vantage of all the different parties concerned, of the landlord, of
the tenant, of the sovereign, and of the whole community.
Some leases prescribe to the tenant a certain mode of cultiva-
tion, and a certain succession of crops during the whole continu-
ance of the lease. This condition, which is generally the effect of
the landlord’s conceit of his own superior knowledge (a conceit in
most cases very ill founded), ought always to be considered as
an additional rent; as a rent in service instead of a rent in money.
In order to discourage the practice, which is generally a foolish
one, this species of rent might be valued rather high, and conse-
quently taxed somewhat higher than common money rents.
Some landlords, instead of a rent in money, require a rent in
kind, in corn, cattle, poultry, wine, oil, &c. others again require a
rent in service. Such rents are always more hurtful to the tenant
than beneficial to the landlord. They either take more or keep more
out of the pocket of the former, than they put into that of the lat-
ter. In every country where they take place, the tenants are poor
and beggarly, pretty much according to the degree in which they
take place. By valuing, in the same manner, such rents rather high,
and consequently taxing them somewhat higher than common
money rents, a practice which is hurtful to the whole community
might perhaps be sufficiently discouraged.
When the landlord chose to occupy himself a part of his own
lands, the rent might be valued according to an equitable arbitra-
tion of the farmers and landlords in the neighbourhood, and a mod-
erate abatement of the tax might be granted to him, in the same
manner as in the Venetian territory; provided the rent of the lands
and ex-
pense
could be
dimi-
nished
Leases
should be
registered
fines
taxed
higher
than rent,
condi-
tions of
cultiva-
tion
should be
discour-
apd by
high
valuation,
rents pay-
able in
kind
should be
valued
high,
and an
abate-
ment
given to
landlords
cultivat-
ing a cer-
tain ex-
tent of
their land.
Such 9.
system
would
free the
ta^ from
inconve-
nient un-
certainty
and en-
courage
improve-
ment.
The extra
expense of
levying
the tax
would be
incon-
siderable.
The value
of im-
prove-
ments
should be
for a fixed
term
exempt
from tax-
ation,
784 the wealth of nations
which he occupied did not exceed a certain sum. It is of im-
portance that the landlord should be encouraged to cultivate a part
of his own land. His capital is generally greater than that of the
tenant, and with less skill he can frequently raise a greater produce.
The landlord can afford to try experiments, and is generally dis-
posed to do so. His unsuccessful experiments occasion only a mod-
erate loss to himself. His successful ones contribute to the improve-
ment and better cultivation of the whole country. It might be of
importance, however, that the abatement of the tax should en-
courage him to cultivate to a certain extent only. If the landlords
should, the greater part of them, be tempted to farm the whole of
their own lands, the country (instead of sober and industrious
tenants, who are bound by their own interest to cultivate as well as
their capital and skill will allow them) would be filled with idle
and profligate bailiffs, whose abusive management would soon de-
grade the cultivation, and reduce the annual produce of the land,
to the diminution, not only of the revenue of their masters, but of
the most important part of that of the whole society.
Such a system of administration might, perhaps, free a tax of
this kind from any degree of uncertainty which could occasion
either oppression or inconveniency to the contributor; and might
at the same time serve to introduce into the common management
of land such a plan or policy, as might contribute a good deal to
the general improvement and good cultivation of the country.
The expence of levying a land-tax, which varied with every vari-
ation of the rent, would no doubt be somewhat greater than that of
levying one which was always rated according to a fixed valuation.
Some additional expence would necessarily be incurred both by
the different register offices which it would be proper to establish
in the different districts of the country, and by the different valua-
tions which might occasionally be made of the lands which the
proprietor chose to occupy himself. The expence of all this, how-
ever, might be very moderate, and much below what is incurred in
the levying of many other taxes, which afford a very inconsiderable
revenue in comparison of what might easily be drawn from a tax of
this kind.
The discouragement which a variable land-tax of this kind might
give to the improvement of land, seems to be the most important
objection which can be made to it. The landlord would certainly be
less disposed to improve, when the sovereign, who contributed
nothing to the expence, was to share in the profit of the improve-
ment. Even this objection might perhaps be obviated by allowing
the landlord, before he began his improvement, to ascertain, in con-
TAXES ON THE RENT OF LAND 7S5
junction with the officers of revenue, the actual value of his lands,
according to the equitable arbitration of a certain number of land-
lords and farmers in the neighbourhood, equally chosen by both
parties; and by rating him according to this valuation for such a
number of years, as might be fully sufficient for his complete in-
demnification. To draw the attention of the sovereign towards the
improvement of the land, from a regard to the increase of his own
revenue, is one of the principal advantages proposed by this spe-
cies of land-tax. Xhe term, therefore, allowed for the indemnifica-
tion of the landlord, ought not to be a great deal longer than what
was necessary for that purpose; lest the remoteness of the interest
should discourage too much this attention. It had better, however,
be somewhat too long than in any respect too short. No incitement
to the attention of the sovereign can ever counterbalance the small-
est discouragement to that of the landlord. The attention of the
sovereign can be at best but a very general and vague considera-
tion of what is likely to contribute to the better cultivation of the
greater part of his dominions. The attention of the landlord is a
particular and minute consideration of what is likely to be the most
advantageous application of every inch of ground upon his es-
tate. The principal attention of the sovereign ought to be to en-
courage, by every means in his power, the attention both of the
landlord and of the farmer; by allowing both to pursue their own
interest in their own way, and according to their own judgment; by
giving to both the most perfect security that they shall enjoy the
full recompence of their own industry; and by procuring to both
the most extensive market for every part of their produce, in con-
sequence of establishing the easiest and safest communications
both by land and by water, through every part of his own domin-
ions, as well as the most unbounded freedom of exportation to the
dominions of all other princes.
If by such a system of administration a tax of this kind could and the
be so managed as to give, not only no discouragement, but, on the
contrary, some encouragement to the improvement of land, it does jittie m-
not appear likely to occasion any other inconveniency to the land- conveni-
lord, except always the unavoidable one of being obliged to pay the
tax.
In all the variations of the state of the society, in the improve- it would
ment and in the declension of agriculture; in all the variations in adjust it-
the value of silver, and in all those in the standard of the coin, a changef^
tax of this kind would, of its own accord and without any attention
and would be equally just and equitable in all those different
of government, readily suit itself to the actual situation of things,
Some
states
make a
survey
and valu-
ation for
the land
tax,
for ex-
ample,
Prussia,
Silesia,
and
Bohemia.
Under the
Prussian
land tax
the
church
lands are
taxed
higher
than the
rest; in
786 XHE WEALTH OF NATIONS
changes. It would, therefore, be much more proper to be established
as a perpetual and unalterable regulation, or as what is called a
fundamental law of the commonwealth, than any tax which was
always to be levied according to a certain valuation.
Some states, instead of the simple and obvious expedient of a
register of leases, have had recourse to the laborious and expensive
one of an actual survey and valuation of all the lands in the coun-
try. They have suspected, probably, that the lessor and lessee, in
order to defraud the public revenue, might combine to conceal the
real terms of the lease. Doomsday-book seems to* have been the re-
sult of a very accurate survey of this kind.
In the ancient dominions of the king of Prussia, the land-tax is
assessed according to an actual survey and valuation, which is re-
viewed and altered from time to time.^^ According to that valua-
tion, the lay proprietors pay from twenty to twenty-five per cent,
of their revenue. Ecclesiastics from forty to forty-five per cent. The
survey and valuation of Silesia was made by order of the present
king; it is said with great accuracy. According to that valuation,
the lands belonging to the bishop of Breslaw are taxed at twenty-
five per cent, of their rent. The other revenues of the ecclesiastics
of both religions, at fifty per cent. The commanderies of the Teu-
tonic order, and of that of Malta, at forty per cent. Lands held by a
noble tenure, at thirty-eight and one-third per cent. Lands held by
a base tenure, at thirty-five and one-third per cent.^^
The survey and valuation of Bohemia is said to have been the
work of more than a hundred years. It was not perfected till after
the peace of 1748, by the orders of the present empress queen.^®
The survey of the dutchy of Milan, which was begun in the time
of Charles VI., was not perfected till after 1760. It is esteemed one
of the most accurate that has ever been made. The survey of Savoy
and Piedmont was executed under the orders of the late king of
Sardinia.^’'
In the dominions of the king of Prussia the revenue of the church
is taxed much higher than that of lay proprietors,^® The revenue of
the church is, the greater part of it, a burden upon the rent of land.
It seldom happens that any part of it is applied towards the im-
provement of land; or is so employed as to contribute in any re-
spect towards increasing the revenue of the great body of the
people. His Prussian majesty had probably, upon that account,
thought it reasonable, that it should contribute a good deal more to-
^^Memoires concernant les Droits, &c. tome i. p. 114, 115, 116, &c.
pp. 117-119.
^®Memoires concernant les Droits, &c. tome i. p. 83, 84 and 79.
p. 280, &c. also p. 287, &c. to 316. ^ As stated just above.
TAXES ON THE RENT OF LAND 1^7
wards relieving the exigencies of the state. In some countries the
lands of the church are exempted from all taxes. In others they are
taxed more lightly than other lands. In the dutchy of Milan, the
lands which the church possessed before 1575, are rated to the tax
at a third only of their value.^*^
In Silesia, lands held by a noble tenure are taxed three per cent,
higher than those held by a base tenure. The honours and priv-
ileges of different kinds annexed to the former, his Prussian majesty
had probably imagined, would sufficiently compensate to the pro-
prietor a small aggravation of the tax; while at the same time the
humiliating inferiority of the latter would be in some measure al-
leviated by being taxed somewhat more lightly. In other countries,
the system of taxation, instead of alleviating, aggravates this in-
equality. In the dominions of the king of Sardinia, and in those
provinces of France which are subject to what is called the real or
predial taille, the tax falls altogether upon the lands held by a base
tenure. Those held by a noble one are exempted.
A land-tax assessed according to a general survey and valuation,
how equal soever it may be at first, must in the course of a very
moderate period of time, become unequal. To prevent its becoming
so would require the continual and painful attention of government
to all the variations in the state and produce of every different
farm in the country. The governments of Prussia, of Bohemia, of
Sardinia, and of the dutchy of Milan, actually exert an attention of
this kind; an attention so unsuitable to the nature of government,
that it is not likely to be of long continuance, and which, if it is
continued, will probably in the long-run occasion much more
trouble and vexation than it can possibly bring relief to the con-
tributors.
In 1666, the generality of Montauban was assessed to the Real
or predial taille according, it is said, to a very exact survey and
valuation.^^ By 1727, this assessment had become altogether un-
equal. In order to remedy this inconveniency, government has
found no better expedient than to impose upon the whole generality
an additional tax of a hundred and twenty thousand livres. This
additional tax is rated upon all the different districts subject to the
taille according to the old assessment. But it is levied only upon
those which in the actual state of things are by that assessment un-
der-taxed, and it is applied to the relief of those which by the same
assessment are over-taxed. Two districts, for example, one of which
Mimoiresy tom. i, p. 282.
^ Misprinted “tallie” here and six lines lower down in eds. 2-5.
^ Memoires concernant les Droits &c, tome ii. p. 139, &c. pp. 145-147*
some
states
they are
taxed
lower
than the
rest.
Differ-
ences are
often
made be-
tween
land held
by noble
and base
tenures.
Aland
tax as-
sessed ac-
cording to
a general
survey
and valu-
ation soon
becomes
unequal,
as in
Montau-
ban.
Taxes on
the pro-
duce are
finally-
paid by
the land-
lord,
and are
very un-
equal
taxes,
788 XHE WEALTH OF NATIONS
ought in the actual state of things to be taxed at nine hundred, the
other at eleven hundred livres, are by the old assessment both taxed
at a thousand livres. Both these districts are by the additional tax
rated at eleven hundred livres each. But this additional tax is levied
only upon the district under-charged, and it is applied altogether to
the relief of that over-charged, which consequently pays only nine
hundred livres. The government neither gains nor loses by the ad-
ditional tax, which is applied altogether to remedy the inequalities
arising from the old assessment. The application is pretty much
regulated according to the discretion of the intendant of the gener-
ality, and must, therefore, be in a great measure arbitrary.
Taxes which are proportioned, not to the Rent, but to the Produce
oj Land
Taxes upon the produce of land are in reality taxes upon the rent;
and though they may be originally advanced by the farmer, are
finally paid by the landlord. When a certain portion of the produce
is to be paid away for a tax, the farmer computes, as well as he can,
what the value of this portion is, one year with another, likely to
amount to, and he makes a proportionable abatement in the rent
which he agrees to pay to the landlord. There is no farmer who does
not compute beforehand what the church tythe, which is a land-tax
of this kind, is, one year with another, likely to amount to.
The tythe, and every other land-tax of liis kind, under the ap-
pearance of perfect equality, are very unequal taxes; a certain por-
tion of the produce being, in different situations, equivalent to a
very different portion of the rent. In some very rich lands the prod-
uce is so great, that the one half of it is fully sufficient to replace to
the farmer his capital employed in cultivation, together with the
ordinary profits of farming stock in the neighbourhood. The other
half, or, what comes to the same thing, the value of the other half,
he could afford to pay as rent to the landlord, if there was no tythe.
But if a tenth of the produce is taken from him in the way of tythe,
he must require an abatement of the fifth part of his rent, other-
wise he cannot get back his capital with the ordinary profit. In this
case the rent of the landlord, instead of amounting to a half, or
five-tenths of the whole produce, will amount only to four-tenths
of it. In poorer lands, on the contrary, the produce is sometimes so
small, and the expence of cultivation so great, that it requires four-
fifths of the whole produce to replace to the farmer his capital with
the ordinary profit. In this case, though there was no tythe, the rent
of the landlord could amount to no more than one-fifth or two-
TAXES ON THE PRODUCE OF LAND 7^9
tenths of the whole produce. But if the farmer pays one-tenth of
the produce in the way of tythe, he must require an equal abate-
ment of the rent of the landlord, which will thus be reduced to one-
tenth only of the whole produce. Upon the rent of rich lands, the
tythe may sometimes be a tax of no more than one-fifth part, or
four shillings in the pound; whereas upon that of poorer lands, it
may sometimes be a tax of one-half, or of ten shillings in the pound.
The tythe, as it is frequently a very unequal tax upon the rent,
so it is always a great discouragement both to the improvements of
the landlord and to the cultivation of the farmer. The one cannot
venture to make the most important, which are generally the most
expensive improvements; nor the other to raise the most valuable,
which are generally too the most expensive crops; when the church,
which lays out no part of the expence, is to share so very largely in
the profit. The cultivation of madder was for a long time confined
by the tythe to the United Provinces, which, being presbyterian
countries, and upon that account exempted from this destructive
tax, enjoyed a sort of monopoly of that useful dying drug against
the rest of Europe. The late attempts to introduce the culture of
this plant into England, have been made only in consequence of
the statute which enacted that five shillings an acre should be re-
ceived in lieu of all manner of tythe upon madder.^^
As through the greater part of Europe, the church, so in many
different countries of Asia, the state, is principally supported by a
land-tax, proportioned, not to the rent, but to the produce of the
land. In China, the principal revenue of the sovereign consists in a
tenth part of the produce of all the lands of the empire. This tenth
part, however, is estimated so very moderately, that, in many prov-
inces, it is said not to exceed a thirtieth part of the ordinary prod-
uce. The land-tax or land-rent which used to be paid to the Ma-
hometan government of Bengal, before that country fell into the
hands of the English East India company, is said to have amounted
to about a fifth part of the produce. The land-tax of ancient Egypt
is said likewise to have amounted to a fifth part.^^
In Asia, this sort of land-tax is said to interest the sovereign in
the improvement and cultivation of land.-^ The sovereigns of
China, those of Bengal while under the Mahometan government,
and those of ancient Egypt, are said accordingly to have been ex-
tremely attentive to the making and maintaining of good roads and
navigable canals, in order to increase, as much as possible, both
the quantity and value of every part of the produce of the land, by
which dis-
courage
both im-
prove-
ment and
good cul-
tivation.
They
form the
principal
revenue
of the
state in
many
Asiatic
countries,
and are
said to
interest
the sover-
eign in
the im-
prove-
ment and
cultiva-
“^31 Geo. II., c. 12, continued by $ Geo. III., c. 18.
Genesis xlvii. 26. Above, p. 647.
tion of
land
there.
They may
be in kind
or in
money
Collection
in kind is
quite un-
suitable
for public
revenue.
A money
tax on
produce
maybe
always
the same
or may
vary with
the mar-
ket price
of pro-
duce.
790 THE WEALTH OF NATIONS
procuring to every part of it the most extensive maiket which their
own dominions could afford. The tythe of the church is divided into
such small portions, that no one of its proprietors can have any in-
terest of this kind. The parson of a parish could never find his ac-
count in making a road or canal to a distant part of the country, in
order to extend the market for the produce of his own particular
parish. Such taxes, when destined for the maintenance of the state,
have some advantages which may serve in some measure to bal-
ance their inconveniency. When destined for the maintenance of
the church, they are attended with nothing but inconveniency.
Taxes upon the produce of land may be levied, either in kind; or,
according to a certain valuation, in money.
The parson of a parish, or a gentleman of small fortune who
lives upon his estate, may sometimes, perhaps, find some advantage
in receiving, the one his tythe, and the other his rent, in kind. The
quantity to be collected, and the district within which it is to be
collected, are so small, that they both can oversee, with their own
eyes, the collection and disposal of every part of what is due to
them. A gentleman of great fortune, who lived in the capital, would
be in danger of suffering much by the neglect, and more by the
fraud of his factors and agents, if the rents of an estate in a distant
province were to be paid to him in this manner. The loss of the sov-
ereign, from the abuse and depredation of his tax-gatherers, would
necessarily be much greater. The servants of the most careless pri-
vate person are, perhaps, more under the eye of their master than
those of the most careful prince; and a public revenue, which was
paid in kind, would suffer so much from the mismanagement of the
collectors, that a very small part of what was levied upon the peo-
ple would ever arrive at the treasury of the prince. Some part of
the public revenue of China, however, is said to be paid in this man-
ner. The Mandarins and other tax-gatherers will, no doubt, find
their advantage in continuing the practice of a payment which is
so much more liable to abuse than any payment in money.
A tax upon the produce of land which is levied in money, may be
levied either according to a valuation which varies with all the va-
riations of the market price; or according to a fixed valuation, a
bushel of wheat, for example, being always valued at one and the
same money price, whatever may be the state of the market. The
produce of a tax levied in the former way, will vary only according
to the variations in the real produce of the land according to the
improvement or neglect of cultivation. The produce of a tax levied
in the latter way will vary, not only according to the variations in
the produce of the land, but according to both those in the value
TAXES ON THE KENT OF HOUSES 79 ^
of the precious metals, and those in the quantity of those metals
which is at different times contained in coin of the same denomina-
tion. The produce of the former will always bear the same propor-
tion to the value of the real produce of the land. The produce of
the latter may, at different times, bear very different proportions
to that value.
When, instead either of a certain portion of the produce of land,
or of the price of a certain portion, a certain sum of money is to be
paid in full compensation for all tax or tythe; the tax becomes, in
this case, exactly of the same nature with the land-tax of England.
It neither rises nor falls with the rent of the land. It neither en-
courages nor discourages improvement. The tythe in the greater
part of those parishes which pay what is called a modus in lieu of
all other tythe, is a tax of this kind. During the Mahometan gov-
ernment of Bengal, instead of the payment in kind of the fifth
part of the produce, a modus, and, it is said, a very moderate one,
was established in the greater part of the districts or zemindaries of
the country. Some of the servants of the East India company,
under pretence of restoring the public revenue to its proper value,
have, in some provinces, exchanged this modus for a payment in
kind. Under their management this change is likely both to discour-
age cultivation, and to give new opportunities for abuse in the col-
lection of the public revenue, which has fallen very much below
what it was said to have been, when it first fell under the manage-
ment of the company. The servants of the company may, perhaps,
have profited by this change, but at the expence, it is probable,
both of their masters and of the country.
Taxes upon the Rent of Bouses
The rent of a house may be distinguished into two parts, of which
the one may very properly be called the Building rent; the other is
commonly called the Ground rent.
The building rent is the interest or profit of the capital expended
in building the house. In order to put the trade of a builder upon a
level with other trades, it is necessary that this rent should be suf-
ficient, first, to pay him the same interest which he would have got
for his capital if he had lent it upon good security; and, secondly,
to keep the house in constant repair, or, what comes to the same
thing, to replace, within a certain term of years, the capital which
had been employed in building it. The building rent, or the ordi-
Wben a
certain
sum of
money is
to be paid
in com-
pensation
for the
tax it be-
comes
exactly
like the
English
land tax.
House
rent con-
sists of
two parts,
building
rent,
“Eds, 1-4 read “a fifth
and
ground
rent.
A taxon
house rent
paid by
the ten-
ant falls
partly on
the in-
habitant
and part-
ly on the
owner of
the
ground,
as may be
shown by
an
example
792 the wealth of nations
nary profit of building, is, therefore, every where regulated by the
ordinary interest of money. Where the market rate of interest is
four per cent, the rent of a house which, over and above paying the
ground rent, affords six, or six and a half per cent, upon the whole
expence of building, may perhaps afford a sufficient profit to the
builder. Where the market rale of interest is five per cent., it may
perhaps require seven or seven and a half per cent. If, in propor-
tion to the interest of money, the trade of the builder affords at any
time a much greater profit than this, it will soon draw so much cap-
ital from other trades as will reduce the profit to its proper level. If
it affords at any time much less than this, other trades will soon
draw so much capital from it as will again raise that profit.
Whatever part of ‘the whole rent of a house is over and above
what is sufficient for affording this reasonable profit, naturally goes
to the ground-rent; and where the owner of the ground and the
owner of the building are two different persons, is, in most cases,
completely paid to the former. This surplus rent is the price which
the inhabitant of the house pays for some real or supposed advan-
tage of the situation. In country houses, at a distance from any
great town, where there is plenty of ground to chuse upon, the
ground rent is scarce any thing, or no more than what the ground
which the house stands upon would pay if employed in agriculture.
In country villas in the neighbourhood of some great town, it is
sometimes a good deal higher; and the peculiar conveniency or
beauty of situation is there frequently very well paid for. Ground
rents are generally highest in the capital, and in those particular
parts of it where there happens to be the greatest demand for
houses, whatever be the reason of tha.t demand, whether for trade
and business, for pleasure and society, or for mere vanity and
fashion.
A tax upon house-rent, payable by the tenant and proportioned
to the whole rent of each house, could not, for any considerable
time at least, affect the building rent. If the builder did not get his
reasonable profit, he would be obliged to quit the trade; which, by
raising the demand for building, would in a short time bring back
his profit to its proper level with that of other trades. Neither
would such a tax fall altogether upon the ground-rent; but it would
divide itself in such a manner as to fall, partly upon the inhabitant
of the house, and partly upon the owner of the ground.
Let us suppose, for example, that a particular person judges that
he can afford for house-rent an expence of sixty pounds a year; and
let us suppose too that a tax of four shillings in the pound, or of
one-fifth, payable by the inhabitant, is laid upon house-rent. A
TAXES ON THE RENT OF HOUSES 793
house of sixty pounds rent will in this case cost him seventy-two
pounds a year, which is twelve pounds more than he thinks he can
afford. He will, therefore, content himself with a worse house, or a
house of fifty pounds rent, which, with the additional ten pounds
that he must pay for the tax, will make lip the sum of sixty pounds
a year, the expence which he judges he can afford; and in order to
pay the tax he will give up a part of the additional conveniency
which he might have had from a house of ten pounds a year more
rent. He will give up, I say, a part of this additional conveniency;
for he will seldom be obliged to give up the whole, but will, in con-
sequence of the tax, get a better house for fifty pounds a year, than
he could have got if there had been no tax. For as a tax of this kind,
by taking away this particular competitor, must diminish the com-
petition for houses of sixty pounds rent, so it must likewise dimin-
ish it for those of fifty pounds rent, and in the same manner for
those of all other rents, except the lowest rent, for which it would
for some time increase the competition. But the rents of every class
of houses for which the competition was diminished, would neces-
sarily be more or less reduced. As no part of this reduction, how-
ever, could, for any considerable time at least, affect the building
rent; the whole of it must in the long-run necessarily fall upon th^
ground-rent. The final payment of this tax, therefore, would fall,
partly upon the inhabitant of the house, who, in order to pay his
share, would be obliged to give up a part of his conveniency; and
partly upon the owner of the ground, who, in order to pay his share,
would be obliged to give up a part of his revenue. In what propor-
tion this final payment would be divided between them, it is not
perhaps very easy to ascertain. The division would probably be
very different in different circumstances, and a tax of this kind
might, according to those different circumstances, affect very un-
equally both the inhabitant of the house and the owner of the
ground.
The inequality with which a tax of this kind might fall upon the On the
owners of different ground-rents, would arise altogether from the
accidental inequality of this division. But the inequality with which would be
it might fall upon the inhabitants of different houses would arise, an un-
not only from this, but from another cause. The proportion of the M-
expence of house-rent to the whole expence of living, is different in ing’
the different degrees of fortune. It is perhaps highest in the highest
degree, and it diminishes gradually through the inferior degrees, ^
so as in general to be lowest in the lowest degree. The necessaries
of life occasion the great expence of the poor. They find it difficult
to get food, and the greater part of their little revenue is spent in
It would
be like a
tax on
any other
consum-
able com-
modity, it
would be
very
much in
propor-
tion to
men’s
whole ex-
pense,
and it
would
produce
consider-
able re-
venue.
The rent
could be
easily
ascer-
tained.
Empty
houses
should be
exempt,
and
794 THE WEALTH OE NATIONS
getting it. The luxuries and vanities of life occasion the principal
expence of the rich ; and a magnificent house embellishes and sets
off to the best advantage all the other luxuries and vanities which
they possess. A tax upon .house-rents, therefore, would in general
fall heaviest upon the rich; and in this sort of inequality there
would not, perhaps, be any thing very unreasonable. It is not very
unreasonable that the rich should contribute to the public expence,
not only in proportion to their revenue, but something more than
in that proportion.
The rent of houses, though it in some respects resembles the rent
of land, is in one respect essentially different from it. The rent of
land is paid for the use of a productive subject. The land which
pays it produces it. The rent of houses is paid for the use of an un-
productive subject. Neither the house nor the ground which it
stands upon produce any thing. The person who pays the rent,
therefore, must draw it from some other source of revenue, distinct
from and independent of this subject.^® A tax upon the rent of
houses, so far as it falls upon the inhabitants, must be drawn from
the same source as the rent itself, and must be paid from their rev-
enue, whether derived from the wages of labour, the profits of
stock, or the rent of land. So far as it falls upon the inhabitants, it
is one of those taxes which fall, not upon one only, but indifferently
upon all the three different sources of revenue; and is in every re-
spect of the same nature as a tax upon any other sort of consum-
able commodities. In general there is not, perhaps, any one article
of expence or consumption by which the liberality or narrowness
of a man’s whole expence can be better judged of, than by his
house-rent. A proportional tax upon this particular article of ex-
pence might, perhaps, produce a more considerable revenue than
any which has hitherto been drawn from it in any part of Europe.
If the tax indeed was very high, the greater part of people would
endeavour to evade it, as much as they could, by contenting them-
selves with smaller houses, and by turning the greater part of their
expence into some other channel.
The rent of houses might easily be ascertained with sufficient ac-
curacy, by a policy of the same kind with that which would be nec-
essary for ascertaining the ordinary rent of land. Houses not in-
habited ought to pay no tax. A tax upon them would fall altogether
upon the proprietor, who would thus be taxed for a subject which
afforded him neither conveniency nor revenue. Houses inhabited
by the proprietor ought to be rated, not according to the expence
which they might have cost in building, but according to the rent
“Above, p. 264.
TAXES ON THE RENT OF HOUSES 795
which an equitable arbitration might judge them likely to bring, if
leased to a tenant. If rated according to the expence which they
may have cost in building, a tax of three or four shillings in the
pound, joined with other taxes, would ruin almost all the rich and
great families of this, and, I believe, of every other civilized coun-
try. Whoever will examine, with attention, the different town and
country houses of some of the richest and greatest families in this
country, will find that, at the rate of only six and a half, or seven
per cent, upon the original expence of building, their house-rent is
nearly equal to the whole neat rent of their estates. It is the accu-
mulated expence of several successive generations, laid out upon
objects of great beauty and magnificence, indeed; but, in propor-
tion to what they cost, of very small exchangeable value.^'^
Ground-rents are a still more proper subject of taxation than the
rent of houses. A tax upon ground-rents would not raise the rents
of houses. It would fall altogether upon the owner of the ground-
rent, who acts always as a monopolist, and exacts the greatest rent
which can be got for the use of his ground. More or less can be got
for it according as the competitors happen to be richer or poorer, or
can afford to gratify their fancy for a particular spot of ground at
a greater or smaller expence. In every country the greatest number
of rich competitors is in the capital, and it is there accordingly that
the highest ground-rents are always to be found. As the wealth of
those competitors would in no respect be increased by a tax upon
ground-rents, they would not probably be disposed to pay more for
the use of the ground. Whether the tax was to be advanced by the
inhabitant, or by the owner of the ground, would be of little impor-
tance. The more the inhabitant was obliged to pay for the tax, the
less he would incline to pay for the ground; so that the final pay-
ment of the tax would fall altogether upon the owner of the ground-
rent. The ground-rents of uninhabited houses ought to pay no tax.
Both ground-rents and the ordinary rent of land are a species of
revenue which the owner, in many cases, enjoys without any care
or attention of his own. Though a part of this revenue should be
taken from him in order to defray the expences of the state, no dis-
couragement will thereby be given to any sort of industry. The an-
nual produce of the land and labour of the society, the real wealth
^ Since the first publication of this book, a tax nearly upon the above-
mentioned principles has been imposed. This note appears first in ed. 3. The
tax was first imposed by 18 Geo. III., c. 26, and was at the rate of 6d. in
the pound on houses of £$ and under £50 annual value, and is. in the pound
on houses of higher value, but by 19 Geo. Ill,, c. 59, the rates were altered
to 6d. in the pound on houses of £s and under £20 annual value, 9d. on
those of £20 and under £40, and is. on those of £40 and upwards.
houses
occupied
by their
proprie-
tor should
be as-
sessed at
their let-
ting
value.
Ground
rent is a
still more
proper
subject of
taxation
than
building
rent,
as no dis-
courage-
ment is
given to
industry
by the
taxation
of the
rent of
land.
Ground
rents are
even a
more
proper
subject of
taxation *
than or-
dinary
land
rents.
Ground
rents are
nowhere
separately
taxed, but
might be.
House
rent is
legally
liable to
the
British
land tax.
796 the wealth of nations
and revenue of the great body of the people, might be the same
after such a tax as before. Ground-rents, and the ordinary rent of
land, are, therefore, perhaps, the species of revenue which can best
bear to have a peculiar tax imposed upon them.
Ground-rents seem, in this respect, a more proper subject of pe-
culiar taxation than even the ordinary rent of land. The ordinary
rent of land is, in many cases, owing partly at least to the attention
and good management of the landlord. A very heavy tax might dis-
courage too much this attention and good management. Ground-
rents, so far as they exceed the ordinary rent of land, are altogether
owing to the good government of the sovereign, which, by protect-
ing the industry either of the whole people, or of the inhabitants of
some particular place, enables them to pay so much more than its
real value for the ground which they build their houses upon; or to
make to its owner so much more than compensation for the loss
which he might sustain by this use of it. Nothing can be more rea-
sonable than that a fund which owes its existence to the good gov-
ernment of the state, should be taxed peculiarly, or should contrib-
ute something more than the greater part of other funds, towards
the support of that government.
Though, in many different countries of Europe, taxes have been
imposed upon the rent of houses, I do not know of any in which
ground-rents have been considered as a separate subject of taxa-
tion. The contrivers of taxes have, probably, found some difficulty
in ascertaining what part of the rent ought to be considered as
ground-rent, and what part ought to be considered as building-
rent. It should not, however, seem very difficult to distinguish those
two parts of the rent from one another.
In Great Britain the rent of houses is supposed to be taxed in
the same proportion as the rent of land, by what is called the an-
nual land-tax. The valuation, according to which each different par-
ish and district is assessed to this tax, is always the same. It was
originally extremely unequal, and it still continues to be so.
Through the greater part of the kingdom this tax falls still more
lightly upon the rent of houses than upon that of land. In some few
districts only, which were originally rated high, and in which the
rents of houses have fallen considerably, the land-tax of three or
four shillings in the pound, is said to amount to an equal proportion
of the real rent of houses.^® Untenanted houses, though by law sub-
ject to the tax, are, in most districts, exempted from it by the fa-
vour of the assessors; and this exemption sometimes occasions
some little variation in the rate of particular houses, though that of
^Ed. 1 reads “the houses.”
797
TAXES ON THE RENT OF HOUSES
the district is always the same. Improvements of rent, by new
buildings, repairs, &c.; go to the discharge of the district, which
occasions still further variations in the rate of particular houses.^^
In the province of Holland every house is taxed at two and a
half per cent, of its value, without any regard either to the rent
which it actually pays, or to the circumstance of its being tenanted
or untenanted. There seems to be a hardship in obliging the pro-
prietor to pay a tax for an untenanted house, from which he can
derive no revenue, especially so very heavy a tax. In Holland,
where the market rate of interest does not exceed three per cent,
two and a half per cent, upon the whole value of the house, must,
in most cases, amount to more than a third of the building-rent,
perhaps of the whole rent. The valuation, indeed, according to
which the houses are rated, though very unequal, is said to be al-
ways below the real value. When a house is rebuilt, improved or
enlarged, there is a new valuation, and the tax is rated accordingly.
The contrivers of the several taxes which in England have, at
different times, been imposed upon houses, seem to have imagined
that there was some great difficulty in ascertaining, with tolerable
exactness, what was the real rent of every house. They have regu-
lated their taxes, therefore, according to some more obvious cir-
cumstance, such as they had probably imagined would, in most
cases, bear some proportion to the rent.
The first tax of this kind was hearth-money; or a tax of two
shillings upon every hearth. In order to ascertain how many
hearths were in the house, it was necessary that the tax-gatherer
should enter every room in it. This odious visit rendered the tax
odious. Soon after the revolution, therefore, it was abolished as a
badge of slavery.
The next tax of this kind was, a tax of two shillings upon every
dv/elling house inhabited. A house with ten windows to pay four
shillings more. A house with twenty windows and upwards to pay
eight shillings. This tax was afterwards so far altered, that houses
with twenty windows, and with less than thirty, were ordered to
pay ten shillings, and those with thirty windows and upwards to
pay twenty shillings. The number of windows can, in most cases, be
counted from the outside, and, in all cases, without entering every
room in the house. The visit of the tax-gatherer, therefore, was less
offensive in this tax than in the hearth-money.
This tax was afterwards repealed, and in the room of it was es-
tablished the window-tax, which has undergone too several altera-
^Ed. I does not contain this sentence.
“Memoires concernant les Droits, &c. tom. i., p. 223.
In Hol-
land there
is a tax on
the capi-
tal value
of houses.
House
taxes in
England
have not
been pro-
portioned
to the
rent,
but first
to the
number
of
hearths,
and later
to the
number
of
windows.
The pres-
ent win-
dow tax
augments
gradually
from 2 d.
per win-
dow to 2S.
Window
taxes are
objection-
able,
chiefly on
the
ground
of in-
equality.
Taxes on
houses
lower
rents.
Profit is
divided
into in-
terest and
surplus
over in-
terest.
The sur-
plus is
not tax-
able.
79S THE WEALTH OF NATIONS
tions and augmentations. The window-tax, as it stands at present
(January, 1775), over and above the duty of three shillings upon
every house in England, and of one shilling upon every house in
Scotland, lays a duty upon every window, which, in England, aug-
ments gradually from two-pence, the lowest rate, upon houses with
not more than seven windows; to two shillings, the highest rate,
upon houses with twenty-five windows and upwards.
The principal objection to all such taxes is their inequality, an
inequality of the worst kind, as they must frequently fall much
heavier upon the poor than upon the rich. A house of ten pounds
rent in a country town may sometimes have more windows than a
house of five hundred pounds rent in London ; and though the in-
habitant of the former is likely to be a much poorer man than that
of the latter, yet so far as his contribution is regulated by the win-
dow-tax, he must contribute more to the support of the state. Such
taxes are, therefore, directly contrary to the first of the four max-
ims above mentioned. They do not seem to offend much against any
of the other three.
The natural tendency of the window-tax, and of all other taxes
upon houses, is to lower rents. The more a man pays for the tax,
the less, it is evident, he can afford to pay for the rent. Since the
imposition of the window-tax, however, the rents of houses have
upon the whole risen, more or less, in almost every town and vil-
lage of Great Britain, with which I am acquainted. Such has been
almost every where the increase of the demand for houses, that it
has raised the rents more than the window-tax could sink them;
one of the many proofs of the great prosperity of the country, and
of the increasing revenue of its inhabitants. Had it not been for
the tax, rents would probably have risen still higher.
Article II
Taxes upon prop, or upon the Revenue arising from Stock
The revenue or profit arising from stock naturally divides itself in-
to two parts; that which pays the interest, and which belongs to
the owner of the stock; and that surplus part which is over and
above what is necessary for paying the interest.
This latter part of profit is evidently a subject not taxable di-
rectly. It is the compensation, and in most cases it is no more than
a very moderate compensation, for the risk and trouble of employ-
ing the stock. The employer must have this compensation, other-
TAXES ON PROFITS IN GENERAL 799
wise he cannot, consistently with his own interest, continue the
employment. If he was taxed directly, therefore, in proportion to
the whole profit, he would be obliged either to raise the rate of his
orofit, or to charge the tax upon the interest of money; that is, to
pay less interest. If he raised the rate of his profit in proportion to
the tax, the whole tax, though it might be advanced by him, would
be finally paid by one or other of two different sets of people, ac-
cording to the different ways in which he might employ the stock
of which he had the management. If he employed it as a farming
stock in the cultivation of land, he could raise the rate of his profit
only by retaining a greater portion, or, what comes to the same
thing, the price of a greater portion of the produce of the land; and
as this could be done only by a reduction of rent, the final payment
of the tax would fall upon the landlord. If he employed it as a mer-
cantile or manufacturing stock, he could raise the rate of his profit
only by raising the price of his goods; in which case the final pay-
ment of the tax would fall altogether upon the consumers of those
goods. If he did not raise the rate of his profit, he would be obliged
to charge the whole tax upon that part of it which was allotted for
the interest of money. He could afford less interest for whatever
stock he borrowed, and the whole weight of the tax would in this
case fall ultimately upon the interest of money. So far as he could
not relieve himself from the tax in the one way, he would be obliged
to relieve himself in the other.
The interest of money seems at first sight a subject equally cap- Interest
able of being taxed directly as the rent of land. Like the rent of
land, it is a neat produce which remains after completely compen- seems as
sating the whole risk and trouble of employing the stock. As a tax fit to be
upon the rent of land cannot raise rents; because the neat produce
which remains after replacing the stock of the farmer, together with
his reasonable profit, cannot be greater after the tax than before it:
so, for the same reason, a tax upon the interest of money could not
raise the rate of interest; the quantity of stock or money in the
country, like the quantity of land, being supposed to remain the
same after the tax as before it. The ordinary rate of profit, it has
been shewn in the first book,^^ is every where regulated by the
quantity of stock to be employed in proportion to the quantity of
the employment, or of the business which must be done by it. But
the quantity of the employment, or of the business to be done by
stock, could neither be increased nor diminished by any tax upon
the interest of money. If the quantity of the stock to be employed
therefore, was neither increased nor diminished by it, the ordinary
®^Chap ix.
but it is
not, since,
(i) the
amount
received
by an in-
dividual
cannot be
readily
and
exactly
ascer-
tained,
and (2)
stock may
be re-
moved
from the
country
imposing
the tax.
Wliere
such a
tax exists
it is levied
on a loose
800 the wealth of nations
rate of profit would necessarily remain the same. But the portion
of this profit necessary for compensating the risk and trouble of
the employer, would likewise remain the same; that risk and trou-
ble being in no respect altered. The residue, therefore, that portion
which belongs to the owner of the stock, and which pays the inter-
est of money, would necessarily remain the same too. At first sight,
therefore, the interest of money seems to be a subject as fit to be
taxed directly as the rent of land.
There are, however, two different circumstances which render
the interest of money a much less proper subject of direct taxation
than the rent of land.
First, the quantity and value of the land which any man pos-
sesses can never be a secret, and can always be ascertained with
great exactness. But the whole amount of the capital stock which
he possesses is almost always a secret, and can scarce ever be ascer-
tained with tolerable exactness. It is liable, besides, to almost con-
tinual variations. A year seldom passes away, frequently not a
month, sometimes scarce a single day, in which it does not rise or
fall more or less. An inquisition into every man’s private circum-
stances, and an inquisition which, in order to accommodate the tax
to them, watched over all the fluctuations of his fortune, would be
a source of such continual and endless vexation as no people could
support.
Secondly, land is a subject which cannot be removed, whereas
stock easily may. The proprietor of land is necessarily a citizen of
the particular country in which his estate lies. The proprietor of
stock is properly a citizen of the world, and is not necessarily at-
tached to any particular country. He would be apt to abandon the
country in which he was exposed to a vexatious inquisition, in or-
der to be assessed to a burdensome tax, and would remove his stock
to some other country where he could either carry on his business,
or enjoy his fortune more at his ease. By removing his stock he
would put an end to all the industry which it had maintained in the
country which he left. Stock cultivates land; stock employs labour.
A tax which tended to drive away stock from any particular coun-
try, would so far tend to dry up every source of revenue, both to
the sovereign and to the society. Not only the profits of stock, but
the rent of land and the wages of labour, would necessarily be more
or less diminished by its removal.
The nations, accordingly, who have attempted to tax the revenue
arising from stock, instead of any severe inquisition of this kind,
have been obliged to content themselves with some very loose, and,
therefore, more or less arbitrary estimation. The extr’eme inequality
TAXES ON PROFITS IN GENERAL Soi
and uncertainty of a tax assessed in this manner, can be compen-
sated only by its extreme moderation, in consequence of which
every man finds himself rated so very much below his real revenue,
that he gives himself little disturbance though his neighbour should
be rated somewhat lower.
By what is called the land-tax in England, it was intended that
stock should be taxed in the same proportion as land. When the tax
upon land was at four shillings in the pound, or at one-fifth of the
supposed rent, it was intended that stock should be taxed at one-
fifth of the supposed interest. When the present annual land-tax
was first imposed, the legal rate of interest was six per cent. Every
hundred pounds stock, accordingly, was supposed to be taxed at
twenty-four shillings, the fifth part of six pounds. Since the legal
rate of interest has been reduced to five per cent.®^ every hundred
pounds stock is supposed to be taxed at twenty shillings only. The
sum to be raised, by what is called the land-tax, was divided be-
tween the country and the principal towns. The greater part of it
was laid upon the country; and of what was laid upon the towns,
the greater part was assessed upon the houses. What remained to
be assessed upon the stock or trade of the towns (for the stock up-
on the land was not meant to be taxed) was very much below the
real value of that stock or trade. Whatever inequalities, therefore,
there might be in the original assessment, gave little disturbance.
Every parish and district still continues to be rated for its land, its
houses, and its stock, according to the original assessment; and the
almost universal prosperity of the country, which in most places
has raised very much the value of all these, has rendered those in-
equalities of still less importance now. The rate too upon each dis-
trict continuing always the same, the uncertainty of this tax, so far
as it might be assessed upon the stock of any individual, has been
very much diminished, as well as rendered of much less conse-
quence. If the greater part of the lands of England are not rated to
the land-tax at half their actual value, the greater part of the stock
of England is, perhaps, scarce rated at the fiftieth part of its actual
value. In some towns the whole land-tax is assessed upon houses;
as in Westminster, where stock and trade are free. It is otherwise
in London.
In all countries a severe inquisition into the circumstances of
private persons has been carefully avoided.
At Hamburgh every inhabitant is obliged to pay to the state,
one-fourth per cent, of all that he possesses; and as the wealth of
and very
low valu-
ation,
as under
the Eng-
lish land
tax.
Inquisi-
tion is
avoided.
At Ham-
burg each
“ Above, pp. 88, 89.
®®Memoires concemant les Droits, tome i. p. 74.
inhabi-
tant pri-
vately
assesses
himself
on oath.
In some
Swiss
cantons
each man
assesses
himself
publicly,
which
would be
802 the wealth of nations
the people of Hamburgh consists principally in stock, this tax may
be considered as a tax upon stock. Every man assesses himself, and,
in the presence of the magistrate, puts annually into the public cof-
fer a certain sum of money, which he declares upon oath to be one-
fourth per cent, of all that he possesses, but without declaring what
it amounts to, or being liable to any examination upon that sub-
ject.®^ This tax is generally supposed to be paid with great fidelity.
In a small republic, where the people have entire confidence in
their magistrates, are convinced of the necessity of the tax for the
support of the state, and believe that it will be faithfully applied to
that purpose, such conscientious and voluntary payment may
sometimes be expected. It is not peculiar to the people of Ham-
burgh.
The canton of Underwald in Switzerland is frequently ravaged
by storms and inundations, and is thereby exposed to extraordi-
nary expences. Upon such occasions the people assemble, and every
one is said to declare with the greatest frankness what he is worth,
in order to be taxed accordingly. At Zurich the law orders, that, in
cases of necessity, every one should be taxed in proportion to his
revenue; the amount of which, he is obliged to declare upon oath.
They have no suspicion, it is said, that any of their fellow-citizens
will deceive them. At Basil the principal revenue of the state arises
from a small custom upon goods exported. All the citizens make
oath that they will pay every three months all the taxes imposed by
the law. All merchants and even all inn-keepers are trusted with
keeping themselves the account of the goods which they sell either
within or without the territory. At the end of every three months
they send this account to the treasurer, with the amount of the tax
computed at the bottom of it. It is not suspected that the revenue
suffers by this confidence.®'^
To oblige every citizen to declare publicly upon oath the amount
of his fortune, must not, it seems, in those Swiss cantons, be reck-
^ The Memoires only say “La taille consiste dans le quart pour cent que
tout habitant, sans exception, est oblige de payer de tout ce qu’il possede en
meubles et immeubles. II ne se fait aucune repartition de cette tailie. Chaque
bourgeois se cottise lui-m6me et porte son imposition a la maison de ville,
et on n’exige autre chose de lui, sinon le serment qu’il est oblige de faire que
ce qu’il paye forme v^ritablement ce qu’il doit acquitter.” But Lord Karnes,
Sketches of the History of Mariy vol. i., p. 476, says, “Every merchant puts
privately into the public chest, the sum that, in his own opinion, he ought
to contribute.”
^ Ed. I reads “Underwold.”
Ed. 5 adds “it” here, doubtless a misprint.
Memoires concernant les Droits, tome i. p. 163, 166, 171. The state-
ments p to the confidence felt in these self-assessments are not taken from
the Memoires.
TAXES ON PARTICULAR PROFITS S03
oned a hardship. At Hamburgh it would be reckoned the greatest.
Merchants engaged in the hazardous projects of trade, all tremble
at the thoughts of being obliged at all times to expose the real state
of their circumstances. The ruin of their credit and the miscarriage
of their projects, they foresee, would too often be the consequence.
A sober and parsimonious people, who are strangers to all such
projects, do not feel that they have occasion for any such conceal-
ment.
In Holland, soon after the exaltation of the late prince of Orange
to the stadtholdership, a tax of two per cent, or the fiftieth penny,
as it was called, was imposed upon the whole substance of every
citizen. Every citizen assessed himself and paid his tax in the same
manner as at Hamburgh; and it was in general supposed to have
been paid with great fidelity. The people had at that time the
greatest affection for their new government, which they had just
established by a general insurrection. The tax was to be paid but
once ; in order to relieve the state in a particular exigency. It was,
indeed, too heavy to be permanent. In a country where the market
rate of interest seldom exceeds three per cent., a tax of two per
cent, amounts to thirteen shillings and fourpence in the pound up-
on the highest neat revenue which is commonly drawn from stock.
It is a tax which very few people could pay without encroaching
more or less upon their capitals. In a particular exigency the people
may, from great public zeal, make a great effort, and give up even
a part of their capital, in order to relieve the state. But it is impos-
sible that they should continue to do so for any considerable time;
and if they did, the tax would soon ruin them so completely as to
render them altogether incapable of supporting the state.
The tax upon stock imposed by the land-tax bill in England,
though it is proportioned to the capital, is not intended to diminish
or take away any part of that capital. It is meant only to be a tax
upon the interest of money proportioned to that upon the rent of
land; so that when the latter is at four shillings in the pound, the
former may be at four shillings in the pound too. The tax at Ham-
burgh, and the still more moderate taxes of Underwald and Zurich,
are meant, in the same manner, to be taxes, not upon the capital,
but upon the interest or neat revenue of stock. That of Holland
was meant to be a tax upon the capital.
a hard-
ship at
Hamburg.
Holland
once
adopted
the Ham-
burg
practice.
On that
occasion
the tax
was
meant to
be a tax
on the
capital.
Taxes upon the Profit of particular Employments
In some countries extraordinary taxes are imposed upon the profits
Taxes are
some-
times im-
posed on
particular
profits,
such as
those on
hawkers,
* pedlars,
etc.
These fall
not on the
dealers
but on the
consum-
ers of the
goods,
but when
not pro-
portioned
to the
trade of
the dealer
they op-
press the
small and
favour
the great
dealer.
804 the wealth of nations
of stock; sometimes when employed in particular branches of
trade, and sometimes when employed in agriculture.
Of the former kind are in England the tax upon hawkers and
pedlars, that upon hackney coaches and chairs, and that which the
keepers of ale-houses pay for a licence to retail ale and spirituous
liquors. During the late war, another tax of the same kind was pro-
posed upon shops.^® The war having been undertaken, it was said,
in defence of the trade of the country, the merchants, who were to
profit by it, ought to contribute towards the support of it.
A tax, however, upon the profits of stock employed in any par-
ticular branch of trade, can never fall finally upon the dealers (who
must in all ordinary cases have their reasonable profit, and, where
the competition is free, can seldom have more than that profit),
but always upon the consumers, who must be obliged to pay in the
price of the goods the tax which the dealer advances; and gener-
ally with some overcharge.
A tax of this kind when it is proportioned to the trade of the
dealer, is finally paid by the consumer, and occasions no oppression
to the dealer. When it is not so proportioned, but is the same upon
all dealers, though in this case too it is finally paid by the consum-
er, yet it favours the great, and occasions some oppression to the
small dealer. The tax of five shillings a week upon every hackney
coach, and that of ten shillings a year upon every hackney chair, so
far as it is advanced by the different keepers of such coaches and
chairs, is exactly enough proportioned to the extent of their re-
spective dealings. It neither favours the great, nor oppresses the
smaller dealer. The tax of twenty shillings a year for a licence to
sell ale; of forty shillings for a licence to sell spirituous liquors;
and of forty shillings more for a licence to sell wine, being the same
upon all retailers, must necessarily give some advantage to the
great, and occasion some oppression to the small dealers. The for-
mer must find it more easy to get back the tax in the price of their
goods than the latter. The moderation of the tax, however, renders
this inequality of less importance, and it may to many people ap-
pear not improper to give some discouragement to the multiplica-
tion of little ale-houses. The tax upon shops, it was intended, should
be the same upon all shops. It could not well have been otherwise.
It would have been impossible to proportion with tolerable exact-
ness the tax upon a shop to the extent of the trade carried on in it,
without such an inquisition as would have been altogether insup-
portable in a free country. If the tax had been considerable, it
‘^Proposed by Legge in 1759. See Do^vell, History of Taxation and Taxes
in England f 1884, voL ii., p. 137.
TAXES ON PARTICULAR PROFITS 2^5
would have oppressed the small, and forced almost the whole retail
trade into the hands of the great dealers. The competition of the
former being taken away, the latter would have enjoyed a monop-
oly of the trade; and like all other monopolists would soon have
combined to raise their profits much beyond what was necessary for
the payment of the tax. The final pa3nnent, instead of falling upon
the shopkeeper, would have fallen upon the consumer, with a con-
siderable over-charge to the profit of the shopkeeper. For these rea-
sons, the project of a tax upon shops was laid aside, and in the room
of it was substituted the subsidy 1759.
What in France is called the personal taille is, perhaps, the most
important tax upon the profits of stock employed in agriculture
that is levied in any part of Europe.
In the disorderly state of Europe during the prevalence of the
feudal government, the sovereign was obliged to content himself
with taxing those who were too weak to refuse to pay taxes. The
great lords, though willing to assist him upon particular emergen-
cies, refused to subject themselves to any constant tax, and he was
not strong enough to force them. The occupiers of land all over
Europe were, the greater part of them, originally bond-men.
Through the greater part of Europe they were gradually emanci-
pated. Some of them acquired the property of landed estates which
they held by some base or ignoble tenure, sometimes under the
king, and sometimes under some other great lord, like the ancient
copy-holders of England. Others, without acquiring the property,
obtained leases for terms of years, of the lands which they occupied
under their lord, and thus became less dependent upon him. The
great lords seem to have beheld the degree of prosperity and inde-
pendency which this inferior order of men had thus come to enjoy,
with a malignant and contemptuous indignation, and willingly
consented that the sovereign should tax them.^^ In some countries
this tax was confined to the lands which were held in property by
an ignoble tenure; and, in this case, the taille was said to be real.
The land-tax established by the late king of Sardinia, and the taille
in the provinces of Languedoc, Provence, Dauphine, and Brit-
tany; in the generality of Montauban, and in the elections of Agen
and Condom, as well as in some other districts of France, are taxes
upon lands held in property by an ignorble tenure.^^ In other coun-
tries the tax was laid upon the supposed profits of all those who
held in farm or lease lands belonging to other people, whatever
might be the tenure by which the proprietor held them; and in this
^Ed. I does not contain “a.”
"Above, p. 787*
The per-
sonal
taille
in France
on the
profits of
agricul-
ture is
arbitrary
and un-
certain.
"Above, p. 370.
The au-
thority
which as-
sesses it is
always
ignorant
of the real
abilities
of the
contribu-
tors and
often mis-
led by
friend-
ship,
party
animosity
and pri-
vate re-
sentment.
806 the wealth of nations
case the taille was said to be personal. In the greater part of those
provinces of France, which are called the Countries of Elections,
the taille is of this kind. The real taille, as it is imposed only upon
a part of the lands of the country, is necessarily an unequal, but it
is not always an arbitrary tax, though it is so upon some occasions.
The personal taille, as it is intended to be proportioned to the prof-
its of a certain class of people, which can only be guessed at, is nec-
essarily both arbitrary and unequal.
In France the personal taille at present (1775) annually imposed
upon the twenty generalities, called the Countries of Elections,
amounts to 40,107,239 livres, 16 sous."^^ The proportion in which
this sum is assessed upon those different provinces, varies from year
to year, according to the reports which are made to the king’s
council concerning the goodness or badness of the crops, as well as
other circumstances, which may either increase or diminish their
respective abilities to pay. Each generality is divided into a certain
number of elections, and the proportion in which the sum im-
posed upon the whole generality is divided among those different
elections, varies likewise from year to year, according to the re-
ports made to the council concerning their respective abilities. It
seems impossible that the council, with the best intentions, can
ever proportion with tolerable exactness, either of those two as-
sessments to the real abilities of the province or district upon which
they are respectively laid. Ignorance and misinformation must al-
ways, more or less, mislead the most upright council. The propor-
tion which each parish ought to support of what is assessed upon
the whole election, and that which each individual ought to support
of what is assessed upon his particular parish, are both in the same
manner varied, from year to year, according as circumstances are
supposed to require. These circumstances are judged of, in the one
case, by the officers of the election; in the other by those of the par-
ish; and both the one and the other are, more or less, under the
direction and influence of the intendant. Not only ignorance and
misinformation, but friendship, party animosity, and private re-
sentment, are said frequently to mislead such assessors. No man
subject to such a tax, it is evident, can ever be certain, before he is
assessed, of what he is to pay. He cannot even be certain after he
is assessed. If any person has been taxed who ought to have been
exempted; or if any person has been taxed beyond his proportion,
though both must pay in the mean time, yet if they complain, and
make good their complaints, the whole parish is reimposed next
year in order to reimburse them. If any of the contributors become
^^Memoires concemant les Droits, &c. tome ii. p. 17.
TAXES ON PARTICULAR PROFITS S07
bankrupt or insolvent, the collector is obliged to advance his tax,
and the whole parish is reimposed next year in order to reimburse
the collector. If the collector himself should become bankrupt, the
parish which elects him must answer for his conduct to the receiv-
er-general of the election. But, as it might be troublesome for the
receiver to prosecute the whole parish, he takes at his choice five or
six of the richest contributors, and obliges them to make good what
had been lost by the insolvency of the collector. The parish is aft-
erwards reimposed in order to reimburse those five or six. Such re-
impositions are always over and above the taille of the particular
year in which they are laid on.
When a tax is imposed upon the profits of stock in a particular
branch of trade, the traders are all careful to bring no more goods
to market than what they can sell at a price sufficient to reimburse
them for advancing the tax. Some of them withdraw a part of their
stocks from the trade, and the market is more sparingly supplied
than before. The price of the goods rises, and the final payment of
the tax falls upon the consumer. But when a tax is imposed upon
the profits of stock employed in agriculture, it is not the interest of
the farmers to withdraw any part of their stock from that employ-
ment. Each farmer occupies a certain quantity of land, for which
he pays rent. For the proper cultivation of this land a certain quan-
tity of stock is necessary; and by withdrawing any part of this nec-
essary quantity, the farmer is not likely to be more able to pay
either the rent or the tax. In order to pay the tax, it can never be his
interest to diminish the quantity of his produce, nor consequently
to supply the market more sparingly than before. The tax, there-
fore, will never enable him to raise the price of his produce, so as
to reimburse himself by throwing the final pa3mient upon the
consumer. The farmer, however, must have his reasonable profit
as well as every other dealer, otherwise he must give up the trade.
After the imposition of a tax of this kind, he can get this reason-
able profit only by paying less rent to the landlord. The more he
is obliged to pay in the way of tax, the less he can afford to pay in
the way of rent. A tax of this kind imposed during the currency of
a lease may, no doubt, distress or ruin the farmer. Upon the re-
newal of the lease it must always fall upon the landlord.
In the countries where the personal taille takes place, the farmer
is commonly assessed in proportion to the stock which he appears
to employ in cultivation. He is, upon this account, frequently afraid
to have a good team of horses or oxen, but endeavours to cultivate
with the meanest and most wretched instruments of husbandry that
Taxes on
the profits
of agri-
culture
do not,
like those
on profits
of other
trades,
fall on the
consumer,
but on the
landlord.
The dis-
courage-
ment to
good cul-
tivation
caused by
^Ed. I reads “nor to
the per-
sonal
taille in-
jures the
public,
the farm-
er and the
landlord.
Ter capita
taxes on
negro
slaves fall
on the
landlords.
Poll taxes
have been
repre-
sented as
badges of
slavery,
but, to
the tax-
payer
every tax
is a badge
of liberty.
808 XHE WEALTH OF NATIONS
he can. Such is his distrust in the justice of his assessors, that he
counterfeits poverty, and wishes to appear scarce able to pay any
thing for fear of being obliged to pay too much. By this miserable
policy he does not, perhaps, always consult his own interest in the
most effectual manner; and he probably loses more by the diminu-
tion of his produce than he saves by that of his tax. Though, in
consequence of this wretched cultivation the market is, no doubt,
somewhat worse supplied; yet the small rise of price which this
may occasion, as it is not likely even to indemnify the farmer for
the diminution of his produce, it is still less likely to enable him to
pay more rent to the landlord. The public, the farmer, the land-
lord, all suffer more or less by this degraded cultivation. That the
personal taille tends, in many different ways, to discourage culti-
vation, and consequently to dry up the principal source of the
wealth of every good country, I have already had occasion to ob-
serve in the third book of this Inquiry *
What are called poll-taxes in the southern provinces of North
America, and in the West Indian islands, annual taxes of so much
a head upon every negroe, are properly taxes upon the profits of a
certain species of stock employed in agriculture. As the planters
are, the greater part of them, both farmers and landlords, the final
payment of the tax falls upon them in their quality of landlords
without any retribution.
Taxes of so much a head upon the bondmen employed in culti-
vation, seem anciently to have been common all over Europe. There
subsists at present a tax of this kind in the empire of Russia. It is
probably upon this account that poll-taxes of all kinds have often
been represented as badges of slavery.*^® Every tax, however, is to
the person who pays it a badge, not of slavery, but of liberty. It
denotes that he is subject to government, indeed, but that, as he
has some property, he cannot himself be the property of a master.
A poll-tax upon slaves is altogether different from a poll-tax upon
freemen. The latter is paid by the persons upon whom it is im-
posed; the former by a different set of persons. The latter is either
altogether arbitrary or altogether unequal, and in most cases is
both the one and the other; tie former, though in some respects un-
equal, different slaves being of different values, is in no respect
arbitrary. Every master who knows the number of his own slaves,
knows exactly what he has to pay. Those different taxes, however,
being called by the same name, have been considered as of the
same nature.
Above, p. 370. ^ "®Ed. i reads “West India.”
"E.g., by Montesquieu, Esprit des loisj liv., xiii., chap. xiv.
TAXES ON CAPITAL VALUE ^09
The taxes which in Holland are imposed upon men and maid
servants, are taxes, not upon stock, but upon expence ; and so far
resemble the taxes upon consumable commodities. The tax of a
guinea a head for every man servant, which has lately been im-
posed in Great Britain,^' is of the same kind. It falls heaviest upon
the middling rank. A man of two hundred a year may keep a single
man servant. A man of ten thousand a year will not keep fifty. It
does not affect the poor.^®
^ Taxes upon the profits of stock in particular employments can
never affect the interest of money. Nobody will lend his money for
less interest to those who exercise the taxed, than to those who
exercise the untaxed emplo3mients. Taxes upon the revenue arising
from stock in all employments, where the government attempts to
levy them with any degree of exactness, will, in many cases, fall up-
on the interest of money. The Vingtieme, or twentieth penny, in
France, is a tax of the same kind with what is called the lanitax
in England, and is assessed, in the same manner, upon the revenue
arising from land, houses, and stock. So far as it affects stock it is
assessed, though not with great rigour, yet with much more exact-
ness than that part of the land-tax of England which is imposed
upon the same fund. It, in many cases, falls altogether upon the in-
terest of money. Money is frequently sunk in France upon what
are called Contracts for the constitution of a rent; that is, perpet-
ual annuities redeemable at any time by the debtor upon repay-
ment of the sum originally advanced, but of which this redemption
is not exigible by the creditor except in particular cases. The Ving-
tieme seems not to have raised the rate of those annuities, though
it is exactly levied upon them all.
Appendix to Articles I and II
Taxes upon the capital Value of Land, Houses, and Stock
While property remains in the possession of the same person,
whatever permanent taxes may have been imposed upon it, they
have never been intended to diminish or take away any part of its
capital value, but only some part of the revenue arising from it.
But when property changes hands, when it is transmitted either
from the dead to the living, or from the living to the living, such
taxes have frequently been imposed upon it as necessarily take
away some part of its capital value.
^^17 Geo. Ill, c. 39 ^This paragraph is not in ed. i.
Taxes on
menial
servants
are like
taxes on
consum-
able com-
modities
Taxes on
particular
profits
cannot
affect in-
terest.
Taxes on
the trans-
mission of
property
often ne-
cessarily
take a
part of
the capi-
tal value.
Transfers
from the
dead to
the living
and all
transfers
of im-
movable
property
can be
taxed di-
rectly ;
transfers
by way of
loan of
money
have been
taxed by
stamp
duties or
duties on
registra-
tion.
Transfers
from the
dead to
the living
were
taxed by
the Vice-
sima He-
redita-
tum,
and the
Dutch tax
on suc-
cessions.
sio the wealth of nations
The transference of all sorts of property from the dead to the
living, and that of immoveable property, of lands and houses, from
the living to the living, are transactions which are in their nature
either public and notorious, or such as cannot be long concealed.
Such transactions, therefore, may be taxed directly. The transfer-
ence of stock or moveable property, from the living to the living, by
the lending of money, is frequently a secret transaction, and may
always be made so. It cannot easily, therefore, be taxed directly. It
has been taxed indirectly in two different ways; first, by requiring
that the deed, containing the obligation to repay, should be written
upon paper or parchment which had paid a certain stamp-duty,
otherwise not to be valid; secondly, by requiring, under the like
penalty of invalidity, that it should be recorded either in a public or
secret register, and by imposing certain duties upon such registra-
tion. Stamp-duties and duties of registration have frequently been
imposed likewise upon the deeds transferring property of all kinds
from the dead to the living, and upon those transferring immove-
able property from the living to the living, transactions which might
easily have been taxed directly.
The Vicesima Hereditatum, the twentieth penny of inheritances,
imposed by Augustus upon the ancient Romans, was a tax upon the
transference of property from the dead to the living. Dion Cassius,^®
the author who writes concerning it the least indistinctly, says,
that it was imposed upon all successions, legacies, and donations, in
case of death, except upon those to the nearest relations, and to
the poor.
Of the same kind is the Dutch tax upon successions.'^'® Collateral
successions are taxed, according to the degree of relation, from five
to thirty per cent, upon the whole value of the succession. Testa-
mentary donations, or legacies to collaterals, are subject to the like
duties. Those from husband to wife, or from wife to husband, to
the fifteenth penny. The Luctuosa Hereditas, the mournful suc-
cession of ascendents to descendents, to the twentieth penny only.
Direct successions, or those of descendents to ascendents, pay no
tax. The death of a father, to such of his children as live in the same
house with him, is seldom attended with any increase, and fre-
^Lib. S 5 (25) quoted by Burman and Bouchaud. See also Burman de
Vectigalibus Pop. Rom. cap. xi. in Utriusque thesauri antiquitatum roman-
arum graecarumque nova supplementa congesta ab Joanne Poleno, Venice,
1737, vol i., p. 1032B and Bouchaud de I’impdt du vingtieme sur les suc-
cessions et de IHmpdt sur les marchandises chez les Romains; nouv. ed., 1772,
pp. 10 sqq.
®®See Memoires concernant les Droits, &c. tome i. p. 225.
®^A11 eds read “fiftieth,” but the Memoires say “quinzieme” and the
“only” in the next sentence shows that Smith intended to write “fifteenth.”
TAXES ON CAPITAL VALUE Sii
quently with a considerable diminution of revenue; by the loss of
his industry, or his office, or of some life-rent estate, of which he
may have been in possession. That tax would be cruel and oppres-
sive which aggravated their loss by taking from them any part of
his succession. It may, however, sometimes be otherwise with those
children who, in the language of the Roman law, are said to be
emancipated; in that of the Scotch law, to be forisfamiliated; that
is, who have received their portion, have got families of their own,
and are supported by funds separate and independent of those of
their father. Whatever part of his succession might come to such
children, would be a real addition to their fortune, and might there-
fore, perhaps, without more inconveniency than what attends aU
duties of this kind, be liable to some tax.
The casualties of the feudal law were taxes upon the transference
of land, both from the dead to the living, and from the living to the
living. In ancient times they constituted in every part of Europe
one of the principal branches of the revenue of the crown.
The heir of every immediate vassal of the crown paid a certain
duty, generally a year’s rent, upon receiving the investiture of the
estate. If the heir was a minor, the whole rents of the estate, dur-
ing the continuance of the minority, devolved to the superior with-
out any other charge, besides the maintenance of the minor, and the
payment of the widow’s dower, when there happened to be a dowa-
ger upon the land. When the minor came to be of age, another tax,
called Relief, was still due to the superior, which generally amount-
ed likewise to a year’s rent. A long minority, which in the present
times so frequently disburdens a great estate of all its incumbrances,
and restores the family to their ancient splendour, could in those
times have no such effect. The waste, and not the disincumbrance
of the estate, was the common effect of a long minority.
By the feudal law the vassal could not alienate without the con-
sent of his superior, who generally extorted a fine or composition
for granting it. This fine, which was at first arbitrary, came in many
countries to be regulated at a certain portion of the price of the
land. In some countries, where the greater part of the other feudal
customs have gone into disuse, this tax upon the alienation of land
still continues to make a very considerable branch of the revenue
of the sovereign. In the canton of Berne it is so high as a sixth part
of the price of all noble fiefs; and a tenth part of that of all ignoble
ones.®^ In the canton of Lucerne the tax upon the sale of lands is
not universal, and takes place only in certain districts. But if any
Ed. I does not contain “very.”
“Memoires concernant les Droits, &c. tome i. p. 154.
The
feudal
law taxed
the trans-
ference of
land,
by ward-
ships and
reliefs,
and fines
on alien-
ation,
which last
still form
a consid-
erable
branch of
revenue
in many
countries.
8I2
THE WEALTH OF NATIONS
These
taxes on
the sale
of land
may be
levied by
stamps or
duties on
registra-
tion.
In Great
Britain
the duties
are not
propor-
tioned to
the value
of the
property.
In Hol-
land some
are pro-
portioned
and
others
not.
person sells his land, in order to remove out of the territory, he pays
ten per cent, upon the whole price of the sale.^*^ Taxes of the same
kind upon the sale either of all lands, or of lands held by certain
tenures, take place in many other countries, and make a more or
less considerable branch of the revenue of the sovereign.
Such transactions may be taxed indirectly, by means either of
stamp-duties, or of duties upon registration; and those duties
either may or may not be proportioned to the value of the subject
which is transferred.
In Great Britain the stamp-duties are higher or lower, not so
much according to the value of the property transferred (an eight-
een penny or half crown stamp being sufficient upon a bond for
the largest sum of money) as according to the nature of the deed.
The highest do not exceed six pounds upon every sheet of paper,
or skin of parchment; and these high duties fall chiefly upon grants
from the crown, and upon certain law proceedings, without any re-
gard to the value of the subject. There are in Great Britain no
duties on the registration of deeds or writings, except the fees of the
officers who keep the register; and these are seldom more than a
reasonable recompence for their labour. The crown derives no reve-
nue from them.
In Holland there are both stamp-duties and duties upon regis-
tration; which in some cases are, and in some are not proportioned
to the value of the property transferred. All testaments must be
written upon stamped paper of which the price is proportioned to
the property disposed of, so that there are stamps which cost from
three pence, or three stivers a sheet, to three hundred florins, equal
to about twenty-seven pounds ten shillings of our money. If the
stamp is of an inferior price to what the testator ought to have
made use of, his succession is confiscated. This is over and above
all their other taxes on succession. Except bills of exchange, and
some other mercantile bills, all other deeds, bonds, and contracts,
are subject to a stamp-duty. This duty, however, does not rise in
proportion to the value of the subject. All sales of land and of
houses, and all mortgages upon either, must be registered, and,
upon registration, pay a duty to the state of two and a half per
cent, upon the amount of the price or of the mortgage.^® This duty
is extended to the sale of all ships and vessels of more than two tons
burthen, whether decked or undecked. These, it seems, are con-
sidered as a sort of houses upon the water. The sale of moveables,
“Id. p. 157.
“Memoires concernant les Droits, &c. tome i. p. 223, 224, 225.
“ Ed. I reads “or the mortgage.”
TAXES ON CAPITAL VALUE S13
when it is ordered by a court of justice, is subject to the like duty
of two and a half per cent.
In France there are both stamp-duties and duties upon registra-
tion. The former are considered as a branch of the aides or excise,
and in the provinces where those duties take place, are levied by
the excise officers. The latter are considered as a branch of the do-
main of the crown, and are levied by a different set of officers.
Those modes of taxation, by stamp-duties and by duties upon
registration, are of very modern invention. In the course of little
more than a centur}^, however, stamp-duties have, in Europe, be-
come almost universal, and duties upon registration extremely com-
mon. There is no art which one government sooner learns of an-
other, than that of draining money from the pockets of the people.
Taxes upon the transference of property from the dead to the
living, fall finally as well as immediately upon the person to whom
the property is transferred. Taxes upon the sale of land fall alto-
gether upon the seller. The seller is almost always under the neces-
sity of selling, and must, therefore, take such a price as he can get.
The buyer is scarce ever under the necessity of buying, and will,
therefore, only give such a price as he likes. He considers what
the land will cost him in tax and price together. The more he is
obliged to pay in the way of tax, the less he will be disposed to give
in the way of price. Such taxes, therefore, fall almost always upon
a necessitous person, and must, therefore, be frequently very cruel
and oppressive. Taxes upon the sale of new-built houses, where the
building is sold without the ground, fall generally upon the buyer,
because the builder must generally have his profit; otherwise he
must give up the trade. If he advances the tax, therefore, the buyer
must generally repay it to him. Taxes upon the sale of old houses,
for the same reason as those upon the sale of land, fall generally
upon the seller; whom in most cases either conveniency or necessity
obliges to sell. The number of new-built houses that are annually
brought to market, is more less regulated by the demand. Unless
the demand is such as to afford the builder his profit, after paying
all expences, he will build no more houses. The number of old
houses which happen at any time to come to market is regulated by
accidents of which the greater part have no relation to the demand.
Two or three great bankruptcies in a mercantile town, will bring
many houses to sale, which must be sold for what can be got for
them. Taxes upon the sale of ground rents fall altogether upon the
seller; for the same reason as those upon the sale of land. Stamp-
duties, and duties upon the registration of bonds and contracts for
®^Ed. I reads ^‘give only.”
In France
different
sets of
officers
collect the
stamp
duties and
the regis-
tration
duties.
Both
stamps
and regis-
tration
duties are
modern
methods
of taxa-
tion.
Taxes on
transfers
from the
dead to
the living
fall on the
person
who
acquires
the pro-
perty;
taxes on
sales of
land fall
on the
seller;
taxes on
the sale
of new
buildings
fall on
the
buyer;
taxes on
the sale of
old houses
fall on
the seller ;
taxes on
the sale of
ground
rents fall
on the
seller;
taxes on
loans
fall on the
borrow-
er;
taxes on
law pro-
ceedings
fall on the
suitors.
All taxes
on trans-
fers, so
far as
they di-
minish
the capi-
tal value,
are un-
thrifty.
Even
when pro-
portioned
to the
value of
the pro-
perty
they are
unequal,
because
the fre-
quency of
transfer
varies.
They are
certain,
conveni-
ent and
inexpen-
sive.
French
stamp-
duties on
transfers
are not
much
com-
plained
S14 THE WEALTH OF NATIONS
borrowed money, fall altogether upon the borrower, and, in fact, are
always paid by him. Duties of the same kind upon law proceedings
fall upon the suitors. They reduce to both the capital value of the
subject in dispute. The more it costs to acquire any property, the
less must be the neat value of it when acquired.
All taxes upon the transference of property of every kind, so far
as they diminish the capital value of that property, tend to dimin-
ish the funds destined for the maintenance of productive labour.
They are all more or less unthrifty taxes that increase the revenue
of the sovereign, which seldom maintains any but unproductive
labourers; at the expence of the capital of the people, which main-
tains none but productive.
Such taxes, even when they are proportioned to the value of the
property transferred, are still unequal; the frequency of transfer-
ence not being always equal in property of equal value. When they
are not proportioned to this value, which is the case with the great-
er part of the stamp-duties, and duties of registration, they are still
more so. They are in no respect arbitrary, but are or may be in all
cases perfectly clear and certain. Though they sometimes fall upon
the person who is not very able to pay; the time of payment is in
most cases sufficiently convenient for him. When the payment be-
comes due, he must in most cases have the money to pay. They are
levied at very little expence, and in general subject the contributors
to no other inconveniency besides always the unavoidable one of
paying the tax.
In France the stamp-duties are not much complained of. Those
of registration, which they call the Controle, are. They give occa-
sion, it is pretended, to much extortion in the officers of the farmers-
general who collect the tax, which is in a great measure arbitrary
and uncertain. In the greater part of the libels which have been
written against the present system of finances in France, the abuses
of the Controle make a principal article. Uncertainty, however, does
not seem to be necessarily inherent in the nature of such taxes. If
the popular complaints are well founded, the abuse must arise, no*
so much from the nature of the tax, as from the want of precision
and distinctness in the words of the edicts or laws which impose it.
The registration of mortgages, and in general of all rights upon
immoveable property, as it gives great security both to creditors
and purchasers, is extremely advantageous to the public. That of
the greater part of deeds of other kinds is frequently inconvenient
Ed. I does not contain “neat.”
®*The word is used in its older sense, equivalent to the modern “pam-
phlets.” See Murray Oxford English Dictionary, s.v.
TAXES ON WAGES SiS
and even dangerous to individuals, without any advantage to the
public. All registers which, it is acknowledged, ought to be kept
secret, ought certainly never to exist. The credit of individuals
ought certainly never to depend upon so very slender a security as
the probity and religion of the inferior officers of revenue. But
where the fees of registration have been made a source of revenue
to the sovereign, register offices have commonly been multiplied
without end, both for the deeds which ought to be registered, and
for those which ought not. In France there are several different
sorts of secret registers. This abuse, though not perhaps a necessary,
it must be acknowledged, is a very natural effect of such taxes.
Such stamp-duties as those in England upon cards and dice, upon
news-papers and periodical pamphlets, &c. are properly taxes upon
consumption; the final payment falls upon the persons who use or
consume such commodities. Such stamp-duties as those upon
licences to retail ale, wine, and spirituous liquors, though intended,
perhaps, to fall upon the profits of the retailers, are likewise finally
paid by the consumers of those liquors. Such taxes, though called
by the same name, and levied by the same officers and in the same
manner with the stamp-duties above mentioned upon the trans-
ference of property, are however of a quite different nature, and
fall upon quite different funds.
Article III
Taxes upon the Wages oj Labour
The wages of the inferior classes of workmen, I have endeavoured
to show in the first book, are every where necessarily regulated by
two different circumstances; the demand for labour, and the or-
dinary or average price of provisions. The demand for labour, ac-
cording as it happens to be either increasing, stationary, or declin-
ing; or to require an increasing, stationary, or declining population,
regulates the subsistence of the labourer, and determines in what
degree it shall be, either liberal, moderate, or scanty. The ordinary
or average price of provisions determines the quantity of money
which must be paid to the workman in order to enable him, one
year with another, to purchase this liberal, moderate, or scanty
subsistence. While the demand for labour and the price of provi-
sions, therefore, remain the same, a direct tax upon the wages of
labour can have no other effect than to raise them somewhat high-
er than the tax. Let us suppose, for example, that in a particular
of, but
the regis-
tration
duties (or
Controle)
are said to
be arbi-
trary and
uncertain.
Public
registra-
tion of
mortgages
and all
rights to
immov-
able
property
is advan-
tageous,
but secret
registers
ought not
to exist.
Many
stamp-
duties are
duties on
consump-
tion.
A taxon
wages
must raise
wages by
rather
more than
the
amount
of the tax.
the rise
in the
wages of
manufac-
turing
labour
would be
advanced
by the
employers
and paid
by the
consum-
ers, and
the rise
in agricul-
cultural
wages ad-
vanced by
the farm-
ers and
paid by
the land-
lords.
the wealth of nations
place the demand for labour and the price of provisions were such,
as to render ten shillings a week the ordinary wages of labour; and
that a tax of one-fifth, or four shillings in the pound, was imposed
upon wages. If the demand for labour and the price of provisions
remained the same, it would still be necessary that the labourer
should in that place earn such a subsistence as could be bought
only for ten shillings a week, or that after paying the tax he should
have ten shillings a week free wages. But in order to leave him such
free wages after paying such a tax, the price of labour must in that
place soon rise, not to twelve shillings a week only, but to twelve
and sixpence; that is, in order to enable him to pay a tax of one-
fifth, his wages must necessarily soon rise, not one-fifth part only,
but one-fourth. Whatever was the proportion of the tax, the wages
of labour must in all cases rise, not only in that proportion, but in a
higher proportion. If the tax, for example, was one-tenth, the wages
of labour must necessarily soon rise, not one-tenth part only, but
one-eighth.
A direct tax upon the wages of labour, therefore, though the la-
bourer might perhaps pay it out of his hand, could not properly be
said to be even advanced by him; at least if the demand for labour
and the average price of provisions remained the same after the tax
as before it. In all such cases, not only the tax, but something more
than the tax, would in reality be advanced by the person who im-
mediately employed him. The final payment would in different
cases fall upon different persons. The rise which such a tax might
occasion in the wages of manufacturing labour would be advanced
by the master manufacturer, who would both be entitled and
obliged to charge it, with a profit, upon the price of his goods. The
final payment of this rise of wages, therefore, together with the
additional profit of the master manufacturer, would fall upon the
consumer. The rise which such a tax might occasion in the wages of
country labour would be advanced by the farmer, who, in order to
maintain the same number of labourers as before, would be obliged
to employ a greater capital. In order to get back this greater cap-
ital, together with the ordinary profits of stock, it would be neces-
sary that he should retain a larger portion, or what comes to the
same thing, the price of a larger portion, of the produce of the land,
and consequently that he should pay less rent to the landlord. The
final payment of this rise of wages, therefore, would in this case
fall upon the landlord, together with the additional profit of the
farmer who had advanced it. In all cases a direct tax upon the wages
of labour must, in the long-run, occasion both a greater reduction
in the rent of land, and a greater rise in the price of manufactured
TAXES ON WAGES S17
goods, than would have followed from the proper assessment of a
sum equal to the produce of the tax, partly upon the rent of land,
and partly upon consumable commodities.
If direct taxes upon the wages of labour have not always occa-
sioned a proportionable rise in those wages, it is because they have
generally occasioned a considerable fall in the demand for labour.
The declension of industry, the decrease of employment for the
poor, the diminution of the annual produce of the land and labour
of the country, have generally been the effects of such taxes. In con-
sequence of them, however, the price of labour must always be high-
er than it otherwise would have been in the actual state of the de-
mand: and this enhancement of price, together with the profit of
those who advance it, must always be finally paid by the landlords
and consumers.
A tax upon the wages of country labour does not raise the price
of the rude produce of land in proportion to the tax; for the
same reason that a tax upon the farmer’s profit does not raise that
price in that proportion.^^
Absurd and destructive as such taxes are, however, they take
place in many countries. In France that part of the taille which is
charged upon the industry of workmen and day-labourers in coun-
try villages, is properly a tax of this kind. Their wages are com-
puted according to the common rate of the district in which they
reside, and that they may be as little liable as possible to any over-
charge, their yearly gains are estimated at no more than two hun-
dred working days in the year.®^ The tax of each individual is
varied from year to year according to different circumstances, of
which the collector or the commissary, whom the intendant ap-
points to assist him, are the judges. In Bohemia, in consequence of
the alteration in the system of finances which was begun in 1748, a
very heavy tax is imposed upon the industry of artificers. They are
divided into four classes. The highest class pay a hundred florins a
year; which, at two-and-twenty-pence halfpenny a florin, amounts
to 9/. 7^. 6J. The second class are taxed at seventy; the third at
fifty; and the fourth, comprehending artificers in villages, and the
lowest class of those in towns, at twenty-five florins.®®
The recompence of ingenious artists and of men of liberal profes-
sions, I have endeavoured to show in the first book,®^ necessarily
keeps a certain proportion to the emoluments of inferior trades. A
Ed. I does not contain “in proportion to the tax.”
®^Ed. I does not contain “in that proportion ”
Memoires concernant les Droits, &c. tom ii. p. 108.
®®Id. tom. iii. really i. p. 87. Above, pp. loo-iio.
The effect
of the tax
in raising
wages is
generally
disguised
by the fall
in the de-
mand for
labour
which it
occasions.
A tax on
agricul-
tural
wages
raises
prices no
more than
one on
farmers’
profits.
Many
countries
have such
taxes, e.g.,
France
and Bo-
hemia.
A tax on
the re-
compense
of the
8i8
liberal
profes-
sions, etc.,
would
also raise
that re-
compense,
but a tax
on gov-
ernment
offices
would not
raise sal-
aries.
These are
capitation
THE WEALTH OF NATIONS
tax upon this recompence, therefore, could have no other effect than
to raise it somewhat higher than in proportion to the tax. If it did
not rise in this manner, the ingenious arts and the liberal profes-
sions, being no longer upon a level with other trades, would be so
much deserted that they would soon return to that level.
The emoluments of officers are not, like those of trades and pro-
fessions, regulated by the free competition of the market, and do
not, therefore, always bear a just proportion to what the nature of
the employment requires. They are, perhaps, in most countries,
higher than it requires; the persons who have the administration of
government being generally disposed to reward both themselves
and their immediate dependents rather more than enough. The
emoluments of officers, therefore, can in most cases very well bear
to be taxed. The persons, besides, who enjoy public offices, espe-
cially the more lucrative, are in all countries the objects of general
envy; and a tax upon their emoluments, even though it should be
somewhat higher than upon any other sort of revenue, is always a
very popular tax. In England, for example, when by the land-tax
every other sort of revenue was supposed to be assessed at four
shillings in the pound, it was very popular to lay a real tax of
five shillings and sixpence in the pound upon the sdaries of offices
which exceeded a hundred pounds a year; the pensions of the
younger branches of the royaJ family, the pay of the officers of the
army and navy, and a few others less obnoxious to envy excepted.®®
There are in England no other direct taxes upon the wages of
labour.
Article IV
Taxes which, it is intended, should jail indifferently upon every
different Species of Revenue
The taxes which, it is intended, should fall indifferently upon every
different species of revenue, are capitation taxes, and taxes upon
^“Was supposed to be” is equivalent to “was nominally but not really.”
Eds. I and 2 read “a real tax of five shillings in the pound upon the
salaries of offices which exceeded a hundred pounds a year; those of the
judges and a few others less obnoxious to envy excepted.” Under 31 Geo. IL,
c. 22, a tax of IS. in the pound was imposed on all offices worth more than
£100 a year, naval and military offices excepted. The judges were not ex-
cepted, but their salaries were raised soon afterwards. See Dowell, History
of Taxation and Taxes, vol. ii., pp. 135-136. The 6d. seems a mistake: the
5^ IS arrived at by adding the 4s. land tax (which was “real” in the case of
offices) and the is.
CAPITATION TAXES S19
consumable commodities. These must be paid indifferently from
whatever revenue the contributors may possess; from the rent of
their land, from the profits of their stock, or from the wages of
their labour.
Capitation Taxes
Capitation taxes, if it is attempted to proportion them to the for-
tune or revenue of each contributor, become altogether arbitrary.
The state of a man’s fortune varies from day to day, and without
an inquisition more intolerable than any tax, and renewed at least
once every year, can only be guessed at. His assessment, therefore,
must m most cases depend upon the good or bad humour of his
assessors, and must, therefore, be altogether arbitrary and uncer-
tain.
Capitation taxes, if they are proportioned not to the supposed
fortune, but to the rank of each contributor, become altogether un-
equal; the degree of fortune being frequently unequal in the same
degree of rank.
Such taxes, therefore, if it is attempted to render them equal, be-
come altogether arbitrary and uncertain; and if it is attempted to
render them certain and not arbitrary, become altogether unequal.
Let the tax be light or heavy, uncertainty is always a great griev-
ance. In a light tax a considerable degree of inequ^ity may be sup-
ported; in a heavy one it is altogether intolerable.
In the different poll-taxes which took place in England during
the reign of William III.®'^ the contributors were, the greater part
of them, assessed according to the degree of their rank; as dukes,
marquisses, earls, viscounts, barons, esquires, gentlemen, the eldest
and youngest sons of peers, &c. All shopkeepers and tradesmen
worth more than three hundred pounds, that is, the better sort of
them, were subject to the same assessment; how great soever might
be the different in their fortunes.®^ Their rank was more consid-
ered than their fortune. Several of those who in the first poll-tax
were rated according to their supposed fortune, were afterwards
rated according to their rank. Serjeants, attornies, and proctors at
law, who in the first poll-tax were assessed at three shillings in the
pound of their supposed income, were afterwards assessed as gen-
tlemen.®® In the assessment of a tax which was not very heavy, a
®^The first of these is under i W. and M., sess. i, c. 13.
I W. and M., sess. 2, c. 7, § 2,
Under i W. and M., c. 13, § 4, serjeants, attorneys and proctors, as well
as certain other classes, were to pay 3s. in the pound on their receipts. Under
I W. and M., sess. 2, c. 7, § 2, attorneys and proctors and others were to
taxes and
taxes on
consum-
able com-
modities.
Capita-
tion taxes
ostensibly
propor-
tioned to
revenue
are alto-
gether
arbitrary.
If propor-
tioned to
rank they
are un-
equal.
In the
first case
they are
always
grievous
and in the
second
they are
intoler-
able un-
less they
are light.
In the
poll taxes
of Wil-
liam III.
assess-
ment was
chiefly
according
to rank.
In France
the assess-
ment is
by rank
in the
higher
and by
supposed
fortune in
the lower
orders of
people.
The
French
tax is
more
rigorously
exacted
than the
English
taxes
were.
820 XHE WEALTH OF NATIONS
considerable degree of inequality had been found less insupport-
able than any degree of uncertainty.
In the capitation which has been levied in France without any
interruption since the beginning of the present century, the high-
est orders of people are rated according to their rank, by an invari-
able tariff; the lower orders of people, according to what is sup-
posed to be their fortune, by an assessment which varies from year
to year. The officers of the king’s court, the judges and other offi-
cers in the superior courts of justice, the officers of the troops, &c.
are assessed in the first manner. The inferior ranks of people in the
provinces are assessed in the second. In France the great easily sub-
mit to a considerable degree of inequality in a tax which, so far as
it affects them, is not a very heavy one; but could not brook the
arbitrary assessment of an intendant. The inferior ranks of people
must, in that country, suffer patiently the usage which their su-
periors think proper to give them.
In England the different poll-taxes never produced the sum which
had been expected from them, or which, it was supposed, they
might have produced, had they been exactly levied. In France the
capitation always produces the sum expected from it. The mild
government of England, when it assessed the different ranks of
people to the poll-tax, contented itself with what that assessment
happened to produce; and required no compensation for the loss
which the state might sustain either by those who could not pay, or
by those who would not pay (for there were many such), and who,
by the indulgent execution of the law, were not forced to pay. The
more severe government of France assesses upon each generality a
certain sum, which the intendant must find as he can. If any
province complains of being assessed too high, it may, in the assess-
ment of next year, obtain an abatement proportioned to the over-
charge of the year before. But it must pay in the mean time. The
intendant, in order to be sure of finding the sum assessed upon his
generality, was impowered to assess it in a larger sum, that die fail-
ure or inability of some of the contributors might be compensated
by the over-charge of the rest; and till 1765, the fixation of this
surplus assessment was left altogether to his discretion. In that year
f
pay 20s. in addition to the sums already charged. Under 2 W. and M., sess.
I, c. 2, § 5, serjeants-at-law were to pay £15, apparently in addition to the
3s. in the pound. Under 3 W. and M., c. 6, the poundage charge does not
appear at all. The alterations were doubtless made in order to secure cer-
tainty, but purely in the interest of the government, which desired to be
certain of getting a fixed amount. Under the Land Tax Act of 8 and 9 W.
III., c. 6, § 5, Serjeants, attorneys, proctors, etc., are again charged to an
income tax.
TAXES UPON CONSUMABLE COMMODITIES S21
indeed the council assumed this power to itself. In the capitation
of the provinces, it is observed by the perfectly well-informed au-
thor of the Memoirs upon the impositions in France, the propor-
tion which falls upon the nobility, and upon those whose priv-
ileges exempt them from the taille, is the least considerable. The
largest falls upon those subject to the taille, who are assessed to
the capitation at so much a pound of what they pay to that other
tax.*^^
Capitation taxes, so far as they are levied upon the lower ranks
of people, are direct taxes upon the wages of labour, and are at-
tended with all the inconveniencies of such taxes.
Capitation taxes are levied at little expence; and, where they are
rigorously exacted, afford a very sure revenue to the state. It is
upon this account that in countries where the ease, comfort, and
security of the inferior ranks of people are little attended to, capi-
tation taxes are very common. It is in general, however, but a small
part of the public revenue, which, in a great empire, has ever been
drawn from such taxes; and the greatest sum which they have ever
afforded, might always have been found in some other way much
more convenient to, the people.
Taxes upon consumable Commodities
The impossibility of taxing the people, in proportion to their
revenue, by any capitation, seems to have given occasion to the
invention of taxes upon consumable commodities. The state not
knowing how to tax, directly and proportionably, the revenue of
its subjects, endeavours to tax it indirectly by taxing their expence,
which, it is supposed, will in most cases be nearly in proportion to
their revenue. Their expence is taxed by taxing the consumable
commodities upon which it is laid out.
Consumable commodities are either necessaries or luxuries.
By necessaries I understand, not only the commodities which
are indispensably necessary for the support of life, but whatever
the custom of the country renders it indecent for creditable people,
even of the lowest order, to be without. A linen shirt, for example,
is, strictly speaking, not a necessary of life. The Greeks and Romans
lived, I suppose, very comfortably, though they had no linen.^^ But
'^®Ed. I reads “portion” '^Memoires, tom. ii., p. 421.
Dr, John Arbuthnot, in his Tables of Ancient Coins, Weights and Meas-
ures, 2nd ed., 1754, p. 142, says that linen was not used among the Romans,
at least by men, till about the time of Alexander Severus.
Capita-
tion taxes
on the
lower
orders of
people are
like taxes
on wages.
They are
inexpen-
sive and
afford a
sure re-
venue.
The im-
possibility
of taxa-
tion ac-
cording to
revenue
has given
rise to
taxation
according
to ex-
penditure
on con-
sumable
commodi-
ties,
either
neces-
saries or
luxuries,
neces-
saries in-
cluding
all that
credit-
able
people of
the lowest
order
cannot
decently
go with-
out.
What
raises the
price of
subsist-
ence must
raise
wages.
So that a
taxon
neces-
saries,
like a tax
on wages,
raises
wages.
S22 the wealth of nations
in the present times, through the greater part of Europe, a credit-
able day-labourer would be ashamed to appear in public without a
linen shirt, the want of which would be supposed to denote that
disgraceful degree of poverty, which, it is presumed, no body can
well fall into without extreme bad conduct. Custom, in the same
manner, has rendered leather shoes a necessary of life in England.
The poorest creditable person of either sex would be ashamed to
appear in public without them. In Scotland, custom has rendered
them a necessary of life to the lowest order of men; but not to the
same order of women, who may, without any discredit, walk about
bare-footed. In France, they are necessaries neither to men nor to
women; the lowest rank of both sexes appearing there publicly,
without any discredit, sometimes in wooden shoes, and sometimes
bare-footed. Under necessaries therefore, I comprehend, not only
those things which nature, but those things which the established
rules of decency have rendered necessary to the lowest rank of
people. All other things I call luxuries; without meaning by this
appellation, to throw the smallest degree of reproach upon the tem-
perate use of them. Beer and ale, for example, in Great Britain,
and wine, even in the wine countries, I call luxuries."^® A man of any
rank may, without any reproach, abstain totally from tasting such
liquors. Nature does not render them necessary for the support of
life; and custom nowhere renders it indecent to live without them.
As the wages of labour are every where regulated, partly by the
demand for it, and partly by the average price of the necessary
articles of subsistence; whatever raises this average price must
necessarily raise those wages, so that the labourer may still be able
to purchase that quantity of those necessary articles which the state
of the demand for labour, whether increasing, stationary, or de-
clining, requires that he should have.*^^ A tax upon those articles
necessarily raises their price somewhat higher than the amount of
the tax, because the dealer who advances the tax, must generally
get it back with a profit. Such a tax must, therefore, occasion a rise
in the wages of labour proportionable to this rise of price.
It is thus that a tax upon the necessaries of life, operates exactly
in the same manner as a direct tax upon the wages of labour. The
labourer, though he may pay it out of his hand, cannot, for any
considerable time at least, be properly said even to advance it. It
must always in the long-run be advanced to him by his immediate
employer in the advanced rate of his wages. His employer, if he is a
”In Lectures, p 179, above in ed. i. p 432 note, beer seems to be re-
garded as a necessary of life rather than a luxury
See Book I , Chap. 8
TAXES UPON CONSUMABLE COMMODITIES S23
manufacturer, will charge upon the price of his goods this rise of
wages, together with a profit; so that the final payment of the tax,
together with this over-charge, will fail upon the consumer. If his
employer is a farmer, the final pa5mient, together with a like over-
charge, will fall upon the rent of the landlord.
It is otherwise with taxes upon which I call luxuries; even upon
those of the poor. The rise in the price of the taxed commodities,
will not necessarily occasion any rise in the wages of labour. A tax
upon tobacco, for example, though a luxury of the poor as well as
of the rich, will not raise wages. Though it is taxed in England at
three times, and in France at fifteen times its original price, those
high duties seem to have no effect upon the wages of labour. The
same thing may be said of the taxes upon tea and sugar; which in
England and Holland have become luxuries of the lowest ranks of
people; and of those upon chocolate, which in Spain is said to have
become so. The different taxes which in Great Britain have in the
course of the present century been imposed upon spirituous liquors,
are not supposed to have had any effect upon the wages of labour.
The rise in the price of porter, occasioned by an additional tax of
three shillings upon the barrel of strong beer,"^^ has not raised the
wages of common labour in London. These were about eighteen
pence and twenty-pence a day before the tax, and they are not
more now.
The high price of such commodities does not necessarily dimin-
ish the ability of the inferior ranks of people to bring up families.
Upon the sober and industrious poor, taxes upon such commodities
act as sumptuary laws, and dispose them either to moderate, or to
refrain altogether from the use of superfluities which they can no
longer easily afford. Their ability to bring up families, in conse-
quence of this forced frugality, instead of being diminished, is fre-
quently, perhaps, increased by the tax. It is the sober and indus-
trious poor who generally bring up the most numerous families,
and who principally supply the demand for useful labour. All the
poor indeed are not sober and industrious, and the dissolute and
disorderly might continue to indulge themselves in the use of such
commodities after this rise of price in the same manner as before;
without regarding the distress which this indulgence might bring
upon their families. Such disorderly persons, however, seldom rear
up numerous families; their children generally perishing from
neglect, mismanagement, and the scantiness or unwholesomeness of
their food. If by the strength of their constitution they survive the
hardships to which the bad conduct of their parents exposes them;
Geo III c 7
Taxes on
luxuries
even if
consumed
by the
poor have
no such
effect,
as they
act like
sumptu-
ary laws,
and so do
not dimi-
nish the
ability of
the poor
to bring
up useful
families,
whereas a
rise in the
price of
neces-
saries di-
minishes
the ability
of the
poor to
bring up
useful
families
and sup-
ply the
demand
for
labour.
Taxes on
neces-
saries are
contrary
to the in-
terest of
the
middle
and supe-
rior ranks
af people.
^24 THE WEALTH OF NATIONS
yet the example of that bad conduct commonly corrupts their
morals; so that, instead of being useful to society by their industry,
they become public nuisances by their vices and disorders. Though
the advanced price of the luxuries of the poor, therefore, might in-
crease somewhat the distress of such disorderly families, and
thereby diminish somewhat their ability to bring up children; it
would not probably diminish much the useful population of the
country.
Any rise in the average price of necessaries, unless it is compen-
sated by a proportionable rise in the wages of labour, must neces-
sarily diminish more or less the ability of the poor to bring up
numerous families, and consequently to supply the demand for
useful labour; whatever may be the state of that demand, whether
increasing, stationary, or declining; or such as requires an increas-
ing, stationary, or declining population.
Taxes upon luxuries have no tendency to raise the price of any
other commodities except that of the commodities taxed. Taxes
upon necessaries, by raising the wages of labour, necessarily tend to
raise the price of all manufactures, and consequently to diminish
the extent of their sale and consumption. Taxes upon luxuries are
finally paid by the consumers of the commodities taxed, without
any retribution. They fall indifferently upon every species of reve-
nue, the wages of labour, the profits of stock, and the rent of land.
Taxes upon necessaries, so far as they affect the labouring poor,
are finally paid, partly by landlords in the diminished rent of their
lands, and partly by rich consumers, whether landlords or others, in
the advanced price of manufactured goods; and always with a con-
siderable over-charge. The advanced price of such manufactures as
are real necessaries of life, and are destined for the consumption of
the poor, of coarse woollens, for example, must be compensated to
the poor by a farther advancement of their wages. The middling and
superior ranks of people, if they understood their own interest,
ought always to oppose all taxes upon the necessaries of life, as
well as all direct taxes upon the wages of labour. The final payment
of both the one and the other falls altogether upon themselves, and
always with a considerable over-charge. They fall heaviest upon
the landlords, who always pay in a double capacity; in that of land-
lords, by the reduction of their rent; and in that of rich consumers,
by the increase of their expence. The observation of Sir Matthew
Decker, that certain taxes are, in the price of certain goods, some-
times repeated and accumulated four or five times, is perfectly just
with regard to taxes upon the necessaries of life. In the price of
leather, for example, you must pay, not only for the tax upon the
TAXES UPON CONSUMABLE COMMODITIES
leather of your own shoes, but for a part of that upon those of the
shoe-maker and the tanner. You must pay too for the tax upon the
salt, upon the soap, and upon the candles which those workmen
consume while employed in your service, and for the tax upon the
leather, which the salt-maker, the soap-maker, and the candle-
maker consume while employed in their serviced®
In Great Britain, the principal taxes upon the necessaries of life
are those upon the four commodities just now mentioned, salt, taxeUn
leather, soap, and candles. neces-
Salt is a very ancient and a very universal subject of taxation. It
was taxed among the Romans, and it is so at present in, I believe,
every part of Europe. The quantity annually consumed by any in- leather,
dividual is so small, and may be purchased so gradually, that no-
body, it seems to have been thought, could feel very sensibly even ’
a pretty heavy tax upon it. It is in England taxed at three shillings
and fourpence a bushel; about three times the original price of the
commodity. In some other countries the tax is still higher. Leather
is a real necessary of life. The use of linen renders soap such. In
countries where the winter nights are long, candles are a necessary
instrument of trade. Leather and soap are in Great Britain taxed at
three halfpence a pound; candles at a penny; taxes which, upon
the original price of leather, may amount to about eight or ten per
cent.; upon that of soap to about twenty or five and twenty per
cent.; and upon that of candles to about fourteen or fifteen per
cent.; taxes which, though lighter than that upon salt, are still
very heavy. As all those four commodities are real necessaries of
life, such heavy taxes upon them must increase somewhat the ex-
pence of the sober and industrious poor, and must consequently
raise more or less the wages of their labour.
In a country where the winters are so cold as in Great Britain, and, also
fuel is, during that season, in the strictest sense of the word, a
necessary of life, not only for the purpose of dressing victuals, but
for the comfortable subsistence of many different sorts of workmen
who work within doors; and coals are the cheapest of all fuel. The
price of fuel has so important an influence upon that of labour, that
all over Great Britain manufactures have confined themselves prin-
cipally to the coal countries; other parts of the country, on account
of the high price of this necessary article, not being able to work so
cheap. In some manufactures, besides, coal is a necessary instru-
Leather is Decker’s example, Essay on the Decline of the Foreign Trade,
2nd ed., 1750, pp. 29, 30. See also p. 10.
”See Dowell, History of Taxation and Taxes, 1884, vol. iv, pp. 318, 322,
330 -
826
Such
taxes at
any rate
bring in
revenue,
which is
more than
can be
said of
the regu-
lations of
the corn
trade,
etc.,
which
produce
equally
bad
effects.
Much
higher
taxes on
neces-
saries pre-
vail in
many
other
countries.
There are
taxes on
bread,
THE WEALTH OF NATIONS
ment of trade; as in those of glass, iron, and all other metals. If a
bounty could in any case be reasonable, it might perhaps be so upon
the transportation of coals from those parts of the country in which
they abound, to those in which they are wanted. But the legislature,
instead of a bounty, has imposed a tax of three shillings and three-
pence a ton upon coal carried coastways; which upon most sorts
of coal is more than sixty per cent, of the original price at the coal-
pit. Coals carried either by land or by inland navigation pay no
duty. Where they are naturally cheap, they are consumed duty
free: where they are naturally dear, they are loaded with a heavy
duty.
Such taxes, though they raise the price of subsistence, and con-
sequently the wages of labour, yet they afford a considerable reve-
nue to government, which it might not be easy to find in any other
way. There may, therefore, be good reasons for continuing them.
The bounty upon the exportation of corn, so far as it tends in the
actual state of tillage to raise the price of that necessary article,
produces all the like bad effects; and instead of affording any reve-
nue, frequently occasions a very great expence to government. The
high duties upon the importation of foreign corn, which in years of
moderate plenty amount to a prohibition; and the absolute prohi-
bition of the importation either of live cattle or of salt provisions,
which takes place in the ordinary state of the law, and which, on
account of the scarcity, is at present suspended for a limited time
with regard to Ireland and the British plantations,"^^ have all the
bad effects of taxes upon the necessaries of life, and produce no
revenue to government. Nothing seems necessary for the repeal of
such regulations, but to convince the public of the futility of that
system in consequence of which they have been established.
Taxes upon the necessaries of life are much higher in many other
countries than in Great Britain. Duties upon flour and meal when
ground at the mill, and upon bread when baked at the oven, take
place in many countries. In Holland the money price of the bread
consumed in towns is supposed to be doubled by means of such
taxes. In lieu of a part of them, the people who live in the country
pay every year so much a head, according to the sort of bread they
are supposed to consume. Those who consume wheaten bread, pay
three guilders fifteen stivers; about six shillings and ninepence half-
penny, These, and some other taxes of the same kind, by raising
the price of labour, are said to have ruined the greater part of the
™Saxby, British Customs, p. 307. 8 Ann., c. 4; 9 Ann., c, 6.
™ Above, vol. i, p. 392.
TAXES UPON CONSUMABLE COMMODITIES ^^7
manufactures of Holland.®^^ Similar taxes, though, not quite so
heavy, take place in the Milanese, in the states of Genoa, in the
dutchy of Modena, in the dutchies of Parma, Placentia, and Guas-
talla, and in the ecclesiastical state. A French author of some
note has proposed to reform the finances of his country, by sub-
stituting in the room of the greater part of other taxes, this most
ruinous of all taxes. There is nothing so absurd, says Cicero, which
has not sometimes been asserted by some philosophers.^^
Taxes upon butchers meat are still more common than those
upon bread. It may indeed be doubted whether butchers meat is
any where a necessary of life. Grain and other vegetables, with the
help of milk, cheese, and butter, or oil, where butter is not to be
had, it is known from experience, can, without any butchers meat,
afford the most plentiful, the most wholesome, the most nourish-
ing, and the most invigorating diet. Decency no where requires that
any man should eat butchers meat, as it in most places requires
that he should wear a linen shirt or a pair of leather shoes.
Consumable commodities, whether necessaries or luxuries, may
be taxed in two different ways. The consumer may either pay an
annual sum on account of his using or consuming goods of a certain
kind; or the goods may be taxed while they remain in the hands of
the dealer, and before they are delivered to the consumer. The con-
sumable goods which last a considerable time before they are con-
sumed altogether, are most properly taxed in the one way. Those of
which the consumption is either immediate or more speedy, in the
other. The coach-tax and plate-tax are examples of the former
method of imposing: the greater part of the other duties of excise
and customs, of the latter.
A coach may, with good management, last ten or twelve years. It
might be taxed, once for all, before it comes out of the hands of
the coach-maker. But it is certainly more convenient for the buyer
to pay f gur pounds a year for the privilege of keeping a coach, than
to pay all at once forty or forty-eight pounds additional price to the
coach-maker; or a sum equivalent to what the tax is likely to cost
him during the time he uses the same coach. A service of plate, in
^Memoires concemant les Droits, &c. p. 210, 211 and 233. See below, p.
857.
Reformateur. Amsterdam, 1756. Garmer m his note on this passage,
Recherchesy etc., tom. iv., p. 387, attributes this work to Clicquot de Bler-
vache, French Inspector-general of Manufactures and Commerce, 1766-90,
but later authorities doubt or deny Clicquot’s authorship. See Jules de Vroil,
itude sur Clicquot-Blervache, 1870, pp. xxxi-xxxiii.
Divinationey ii., $8, *‘Sed nescio quomodo nihil tarn absurde did
potest quod non dicatur ab aliquo philosophorum.”
and meat.
A tax on a
consum-
able com-
modity
maybe
levied
either
periodi-
cally from
the con-
sumer or
once for
all from
the dealer
when the
consumer
acquires
it.
The first
method is
best
when the
com-
modity is
durable.
SirM.
Decker
proposed
to adapt
it also to
other
commodi-
ties by
issuing
annual
licences to
consume
them, but
this
would be
liable to
greater
objections
than the
second
and usual
method.
S28 the wealth of nations
the same manner, may last more than a century. It is certainly
easier for the consumer to pay five shillings a year for every hun-
dred ounces of plate, near one per cent, of the value, than to re-
deem this long annuity at five and twenty or thirty years purchase,
which would enhance the price at least five and twenty or thirty
per cent. The different taxes which affect houses are certainly more '
conveniently paid by moderate annual payments, than by a heavy
tax of equal value upon the first building or sale of the house.
It was the well-known proposal of Sir Matthew Decker, that all
commodities, even those of which the consumption is either im-
mediate or very speedy, should be taxed in this manner; the dealer
advancing nothing, but the consumer paying a certain annual sum
for the licence to consume certain goods.®^ The object of his scheme
was to promote all the different branches of foreign trade, particu-
larly the carrying trade, by taking away all duties upon importa-
tion and exportation, and thereby enabling th^ merchant to employ
his whole capital and credit in the purchase of goods and the
freight of ships, no part of either being diverted towards the ad-
vancing of taxes. The project, however, of taxing, in this manner,
goods of immediate or speedy consumption, seems liable to the four
following very important objections. First, the tax would be more
unequal, or not so well proportioned to the expence and consump-
tion of the different contributors, as in the way in which it is com-
monly imposed. The taxes upon ale, wine, and spirituous liquors,
which are advanced by the dealers, are finally paid by the different
consumers exactly in proportion to their respective consumption.
But if the tax were to be paid by purchasing a licence to drink
those liquors, the sober would, in proportion to his consumption,
be taxed much more heavily than the drunken consumer. A family
which exercised great hospitality would be taxed much more light-
ly than one who entertained fewer guests. Secondly, this mode
of taxation, by paying for an annual, half-yearly, or quarterly
licence to consume certain goods, would diminish very much one
of the principal conveniences of taxes upon goods of speedy con-
sumption; the piece-meal payment. In the price of three-pence half-
penny, which is at present paid for a pot of porter, the different
taxes upon malt, hops, and beer, together with the extraordinary
profit which the brewer charges for having advanced them, may
perhaps amount to about three halfpence. If a workman can con-
veniently spare those three halfpence, he buys a pot of porter. If
Essay on the Causes of the Decline of the Foreign Trade, 2nd ed., 1750,
pp. 78-163.
Eds. 1-3 read “wa^.”
Eds. I and 2 read “which.’
TAXES UPON CONSUMABLE COMMODITIES S29
he cannot, he contents himself with a pint, and, as a penny saved is
a penny got, he thus gains a farthing by his temperance. He pays
the tax piece-meal, as he can afford to pay it, and when he can
afford to pay it; and every act of payment is perfectly voluntary,
and what he can avoid if he chuses to do so. Thirdly, such taxes
would operate less as sumptuary laws. When the licence was once
purchased, whether the purchaser drunk much or drunk little, his
tax would be the same. Fourthly, if a workman were to pay all at
once, by yearly, half-yearly or quarterly pa5mients, a tax equal to
what he at present pays, with little or no inconveniency, upon all
the different pots and pints of porter which he drinks in any such
period of time, the sum might frequently distress him very much.
This mode of taxation, therefore, it seems evident, could never,
without the most grievous oppression, produce a revenue nearly
equal to what is derived from the present mode without any op-
pression. In several countries, however, commodities of an im-
mediate or very speedy consumption are taxed in this manner. In
Holland, people pay so much a head for a licence to drink tea. I
have already mentioned a tax upon bread, which, so far as it is con-
sumed in farm-houses and country villages, is there levied in the
same manner.
The duties of excise are imposed chiefly upon goods of home pro-
duce destined for home consumption. They are imposed only upon
a few sorts of goods of the most general use. There can never be any
doubt either concerning the goods which are subject to those duties,
or concerning the particular duty which each species of goods is
subject to. They fall almost altogether upon what I call luxuries,
excepting always the four duties above mentioned, upon salt, soap,
leather, candles, and, perhaps, that upon green glass.
The duties of customs are much more ancient than those of ex-
cise. They seem to have been called customs, as denoting customary
payments which had been in use from time immemorial. They ap-
pear to have been originally considered as taxes upon the profits of
merchants. During the barbarous times of feudal anarchy, mer-
chants, like all the other inhabitants of burghs, were considered as
little better than emancipated bondmen, whose persons were de-
spised, and whose gains were envied. The great nobility, who had
consented that the king should tallage the profits of their own ten-
ants, were not unwilling that he should tallage likewise those of an
order of men whom it was much less their interest to protect. In
those ignorant times, it was not understood, that the profits of mer-
chants are a subject not taxable directly; or that the final payment
®®Eds. 1-3 read “was.”
Except-
ing the
four men
tioned
above,
British
excise
duties
fall
chiefly or*
luxuries.
Customs
were ori-
ginally
regarded
as taxes
on mer-
chants’
profits^
those of
aliens be-
ing taxed
more
heavily.
So origin-
ally cus-
toms were
imposed
equally
on all
sorts of
goods,
and on
exports
as well as
imports.
The first
was that
on wool
and
leather,
and the
second
tonnage
(on wine)
and
poundage
(on all
other
goods).
Subsidies
were ad-
ditions to
poundage.
S30 THE WEALTH OF NATIONS
of all such taxes must fall, with a considerable over-charge, upon
the consumers.
The gains of alien merchants were looked upon more unfavour-
ably than those of English merchants. It was natural, therefore,
that those of the former should be taxed more heavily than those
of the latter.®^ This distinction between the duties upon aliens and
those upon English merchants, which was begun from ignorance,
has been continued from the spirit of monopoly, or in order to give
our own merchants an advantage both in the home and in the for-
eign market.
With this distinction, the ancient duties of customs were imposed
equally upon all sorts of goods, necessaries as well as luxuries,
goods exported as well as goods imported. Why should the dealers
in one sort of goods, it seems to have been thought, be more fa-
voured than those in another? or why should the merchant exporter
be more favoured than the merchant importer?
The ancient customs were divided into three branches. The first,
and perhaps the most ancient of all those duties, was that upon
wool and leather. It seems to have been chiefly or altogether an ex-
portation duty. When the woollen manufacture came to be estab-
lished in England, lest the king should lose any part of his customs
upon wool by the exportation of woollen cloths, a like duty was
imposed upon them. The other two branches were, first, a duty
upon wine, which, being imposed at so much a ton, was called a
tonnage; and, secondly, a duty upon all other goods, which, being
imposed at so much a pound of their supposed value, was called a
poundage. In the forty-seventh year of Edward III. a duty of six-
pence in the pound was imposed upon all goods exported and im-
ported, except wools, wool-fells, leather, and wines, which were
subject to particular duties. In the fourteenth of Richard II. this
duty was raised to one shilling in the pound; but three years after-
wards, it was again reduced to sixpence. It was raised to eight-
pence in the second year of Henry IV.; and in the fourth year of
the same prince, to one shilling. From this time to the ninth year of
William III. this duty continued at one shilling in the pound. The
duties of tonnage and poundage were generally granted to the king
by one and the same act cf parliament, and were called the Subsidy
of Tonnage and Poundage. The subsidy of poundage having con-
tinued for so long a time at one shilling in the pound, or at five per
cent.; a subsidy came, in the language of the customs, to denote a
general duty of this kind of five per cent. This subsidy, which is
now called the Old Subsidy, still continues to be levied according
Above, pp. 431, 461.
TAXES UPON CONSUMABLE COMMODITIES ^ 3 ^
to the book of rates established in the twelfth of Charles IL The
method of ascertaining, by a book of rates, the value of goods sub-
ject to this duty, is said to be older than the time of James The
new subsidy imposed by the ninth and tenth of William IIL,®^ was
an additional five per cent, upon the greater part of goods. The
one-third and the two-third subsidy made up between them an-
other five per cent, of which they were proportionable parts. The
subsidy of 1747 made a fourth five per cent, upon the greater
part of goods ; and that of 1 7 59,"^- a fifth upon som.e particular sorts
of goods. Besides those five subsidies, a great variety of other du-
ties have occasionally been imposed upon particular sorts of goods,
in order sometimes to relieve the exigencies of the state, and some-
times to regulate the trade of the country, according to the prin-
ciples of the mercantile system.
That system has come gradually more and more into fashion.
The old subsidy was imposed indifferently upon exportation as well
as importation. The four subsequent subsidies, as well as the other
duties which have since been occasionally imposed upon particular
sorts of goods, have, with a few exceptions, been laid altogether
upon importation. The greater part of the ancient duties which had
been imposed upon the exportation of the goods of home produce
and manufacture, have either been lightened or taken away alto-
gether. In most cases they have been taken away. Bounties have
even been given upon the exportation of some of them. Drawbacks
too, sometimes of the whole, and, in most cases, of a part of the
duties which are paid upon the importation of foreign goods, have
been granted upon their exportation. Only half the duties imposed
by the old subsidy upon importation are drawn back upon exporta-
tion: but the whole of those imposed by the latter subsidies and
other imposts are, upon the greater part of goods, drawn back in
the same manner.®^ This growing favour of exportation, and dis-
couragement of importation, have suffered only a few exceptions,
which chiefly concern the materials of some manufactures. These,
our merchants and manufacturers are willing should come as cheap
^Gilbert, Treatise on the Court of Exchequer^ 1758, p. 224, mentions a
Book of Rates printed in 1586 Dowell, History of Taxation and Taxes, 1884,
vol 1, pp 146, 165, places the begmning of the system soon after 1558.
C. 23. 2 and 3 Ann. c. 9; 3 and 4 Ann., c 5
21 Geo II , c. 2.
®^32 Geo. IL, c. 10, on tobacco, linen, sugar and other grocery, except
currants, East India goods (except coffee and raw silk), brandy and other
spirits (except colonial rum), and paper.
®*Ed. I reads, more intelligibly, “later.” Another example of this unfortu-
nate change occurs below, p. 884.
Above, pp. 466, 467, written after the present passage.
The pre-
valence of
the prin-
ciples of
the mer-
cantile
system
has led
to the re-
moval of
nearly all
the ex-
port
duties,
and has
been un-
favour-
able to
the re-
venue of
the state,
annihil-
ating
parts of it
by pro-
hibitions
of im-
portation,
and re-
ducing
other
parts by
high
duties.
S32 the wealth of nations
as possible to themselves, and as dear as possible to their rivals and
competitors in other countries. Foreign materials are, upon this
account, sometimes allowed to be imported duty free ; Spanish wool,
for example, flax, and raw linen yarn. The exportation of the ma-
terials of home produce, and of those which are the particular
produce of our colonies, has sometimes been prohibited, and some-
times subjected to higher duties. The exportation of English wool
has been prohibited.^® That of beaver skins, of beaver wool, and
of gum Senega, has been subjected to higher duties; Great
Britain, by the conquest of Canada and Senegal, having got almost
the monopoly of those commodities.
That the mercantile system has not been very favourable to the
revenue of the great body of the people, to the annual produce of
the land and labour of the country, I have endeavoured to shew in
the fourth book of this Inquiry. It seems not to have been more
favourable to the revenue of the sovereign; so far at least as that
revenue depends upon the duties of customs.
In consequence of that system, the importation of several sorts
of goods has been prohibited altogether. This prohibition has in
some cases entirely prevented, and in others has very much dimin-
ished the importation of those commodities, by reducing the im-
porters to the necessity of smuggling. It has entirely prevented the
importation of foreign woollens; and it has very much diminished
that of foreign silks and velvets. In both cases it has entirely anni-
hilated the revenue of customs which might have been levied upon
such importation.
The high duties which have been imposed upon the importation
of many different sorts of foreign goods, in order to discourage
their consumption in Great Britain, have in many cases served only
to encourage smuggling; and in all cases have reduced the revenue
of the customs below what more moderate duties would have af-
forded. The saying of Dr. Swift, that in the arithmetic of the cus-
toms two and two, instead of making four, make sometimes only
one,®® holds perfectly true with regard to such heavy duties, which
®®Eds. 1-3 read “peculiar,” and “particular” is perhaps a misprint.
Above, pp. 612-616. Above, pp. 622, 623
Swift attributes the saying to an unnamed commissioner of customs. “I
will tell you a secret, which I learned many years ago from the commis-
sioners of the customs in London, they said when any commodity appeared
to be taxed above a moderate rate, the consequence was to lessen that branch
of the revenue by one-half; and one of these gentlemen pleasantly told me
that the mistake of parliaments on such occasions was owing to an error of
computing two and two make four; whereas in the business of laying im-
positions, two and two never made more than one; which happens by
lessening the import, and the strong temptation of running such goods as
paid high duties, at least in this kingdom.”— “Answer to a Paper Called a
TAXES UPON CONSUMABLE COMMODITIES ^33
never could have been imposed, had not the mercantile system
taught us, in many cases, to employ taxation as an instrument, not
of revenue, but of monopoly.
The bounties which are sometimes given upon the exportation of
home produce and manufactures, and the drawbacks which are paid
upon the re-exportation of the greater part of foreign goods, have
given occasion to many frauds, and to a species of smuggling more
destructive of the public revenue than any other. In order to obtain
the bounty or drawback, the goods, it is well known, are sometimes
shipped and sent to sea; but soon afterwards clandestinely reland-
ed in some other part of the country. The defalcation of the reve-
nue of customs occasioned by bounties and drawbacks, of which a
great part are obtained fraudulently, is very great. The gross pro-
duce of the customs in the year which ended on the 5th of January
1755, amounted to 5,068,000/. The bounties which were paid out
of this revenue, though in that year there was no bounty upon corn,
amounted to 167,800/. The drawbacks which were paid upon de-
bentures and certificates, to 2,156,800/. Bounties and drawbacks to-
gether, amounted to 2,324,600/. In consequence of these deduc-
tions the revenue of the customs amounted only to 2,743,400/.:
from which, deducting 287,900/. for the expence of management in
salaries and other incidents, the neat revenue of the customs for
that year comes out to be 2,455,500/, The expence of management
amounts in this manner to between five and six per cent, upon the
gross revenue of the customs, and to something more than ten per
cent, upon what remains of that revenue, after deducting what is
paid away in bounties and drawbacks.
Heavy duties being imposed upon almost all goods imported,
our merchant importers smuggle as much, and make entry of as
little as they can. Our merchant exporters, on the contrary, mahe
entry of more than they export; sometimes out of vanity, and to
pass for great dealers in goods which pay no duty; and sometimes
to gain a bounty or a drawback. Our exports, in consequence of
these different frauds, appear upon the customhouse books greatly
to overbalance our imports; to the unspeakable comfort of those
politicians who measure the national prosperity by what they call
the balance of trade.
All goods imported, unless particularly exempted, and such ex-
emptions are not very numerous, are liable to some duties of cus-
Memorial of the Poor Inhabitants, Tradesmen and Labourers of the King-
dom of Ireland” (in Works, ed. Scott, 2nd ed., 1883, vol. vii., pp. 165-166. The
saying is quoted from Swift by Hume in his Essay on the Balance of Trade,
and by Lord Karnes in his Sketches of the History of Man, 1774, vol. i., p.
474 )-
Bounties
and
dravv-
backs
(great
part of
which is
obtained
by fraud)
and ex-
penses of
manage-
ment
make a
large
deduction
from the
customs
revenue.
In the
customs
returns
the im-
ports are
minimised
and the
exports
exagger-
ated.
The cus-
toms are
^34 the wealth of NATIONS
very nu- toms. If any goods are imported not mentioned in the book of rates,
Sd much twenty shillings value, ac-
less per- cording to the oath of the importer, that is, nearly at five subsidies,
spicuous or five poundage duties. The book of rates is extremely compre-
tbct^an ii^iisive, and enumerates a great variety of articles, many of them
the excise little used, and therefore not well known. It is upon this account
duties. frequently uncertain under what article a particular sort of goods
ought to be classed, and consequently what duty they ought to pay.
Mistakes with regard to this sometimes ruin the customhouse offi-
cer, and frequently occasion much trouble, expence, and vexation
to the importer. In point of perspicuity, precision, and distinctness,
therefore, the duties of customs are much inferior to those of excise.
They In order that the greater part of the members of any society
^ight should contribute to the public revenue in proportion to their re-
great ad- spective expence, it does not seem necessary that every single arti-
vantage cle of that expence should be taxed. The revenue, which is levied
fined^o a duties of excise, is supposed to fall as equally upon the con-
few ar- tributors as that which is levied by the duties of customs; and the
tides. duties of excise are imposed upon a few articles only of the most
general use and consumption. It has been the opinion of many
people, that, by proper management, the duties of customs might
likewise, without any loss to the public revenue, and with great
advantage to foreign trade, be confined to a few articles only.
Foreign The foreign articles, of the most general use and consumption in
Great Britain, seem at present to consist chiefly in foreign wines
and East and brandies ; in some of the productions of America and the West
^d West , Indies, sugar, rum, tobacco, cocoanuts, &c. and in some of those of
products Indies, tea, coffee, china-ware, spiceries of all kinds, sev-
at present eral sorts of piece-goods, &c. These different articles afford, per-
haps, at present, the greater part of the revenue which is drawn
customs duties of customs. The taxes which at present subsist upon
revenue. foreign manufactures, if you except those upon the few contained
in the foregoing enumeration, have the greater part of them been
imposed for the purpose, not of revenue, but of monopoly, or to
give our own merchants an advantage in the home market. By re-
moving all prohibitions, and by subjecting all foreign manufactures
to such moderate taxes, as it was found from experience afforded
upon each article the greatest revenue to the public, our own work-
men might still have a considerable advantage in the home market,
and many articles, some of which at present afford no revenue to
government, and others a very inconsiderable one, might afford a
very great one.
Saxby, British Customs^ p. 266.
TAXES UPON CONSUMABLE COMMODITIES ^35
High taxes, sometimes by diminishing the consumption of the
taxed commodities, and sometimes by encouraging smuggling, fre-
quently afford a smaller revenue to government than what might be
drawn from more moderate taxes.
When the diminution of revenue is the effect of the diminution
of consumption, there can be but one remedy, and that is the lower-
ing of the tax.
When the diminution of the revenue is the effect of the encour-
agement given to smuggling, it may perhaps be remedied in two
ways; either by diminishing the temptation to smuggle, or by in-
creasing the difficulty of smuggling. The temptation to smuggle can
be diminished only by the lowering of the tax, and the difficulty of
smuggling can be increased only by establishing that system of ad-
ministration which is most proper for preventing it.
The excise laws, it appears, I believe, from experience, obstruct
and embarrass the operations of the smuggler much more effectual-
ly than those of the customs. By introducing into the customs a
system of administration as similar to that of the excise as the na-
ture of the different duties will admit, the difficulty of smuggling
might be very much increased. This alteration, it has been sup-
posed by many people, might very easily be brought about.
The importer of commodities liable to any duties of customs, it
has been said, might at his option be allowed either to carry them
to his own private warehouse, or to lodge them in a warehouse pro-
vided either at his own expence or at that of the public, but under
the key of the customhouse officer, and never to be opened but in
his presence. If the merchant carried them to his own private ware-
house, the duties to be immediately paid, and never afterwards to
be drawn back; and that warehouse to be at all times subject to the
visit and examination of the customhouse officer, in order to ascer-
tain how far the quantity contained in it corresponded with that
for which the duty had been paid. If he carried them to the public
warehouse, no duty to be paid till they were taken out for home
consumption. If taken out for exportation, to be duty-free; proper
security being always given that they should be so exported. The
dealers in those particular commodities, either by wholesale or re-
tail, to be at all times subject to the visit and examination of the
customhouse officer; and to be obliged to justify by proper certifi-
cates the pa)mient of the duty upon the whole quantity contained
in their shops or warehouses. What are called the excise-duties upon
rum imported are at present levied in this manner, and the same
system of administration might perhaps be extended to all duties
upon goods imported; provided always that those duties were, like
The yield
of high
duties IS
often les-
sened b>
smuggling
or di-
minished
consump-
tion
In the
first case
the only
remed}- i
to lower
the duty,
For
smugglini
the re-
medy is
to lowei
the tax 01
increase
the diffi-
culty of
smug-
gling
Excise
laws are
more em-
barrassing
to the
smuggler
than the
customs
If cus-
toms were
confined
to a few
articles, a
system of
excise
super-
vision of
stores
could be
insti-
tuted
Great
simplifi-
cation
without
loss of
revenue
would
then be
secured,
while the
trade and
manufac-
tures of
the coun-
try would
gain
greatly.
the wealth of nations
the duties of excise, confined to a few sorts of goods of the most
general use and consumption. If they were extended to almost all
sorts of goods, as at present, public warehouses of sufficient extent
could not easily be provided, and goods of very delicate nature, or
of which the preservation required much care and attention, could
not safely be trusted by the merchant in any warehouse but his own.
If by such a system of administration smuggling, to any consid-
erable extent, could be prevented even under pretty high duties;
and if every duty was occasionally either heightened or lowered
according as it was most likely, either the one way or the other, to
afford the greatest revenue to the state; taxation being always em-
ployed as an instrument of revenue and never of monopoly; it
seems not improbable that a revenue, at least equal to the present
neat revenue of the customs, might be drawn from duties upon the
importation of only a few sorts of goods of the most general use and
consumption; and that the duties of customs might thus be brought
to the same degree of simplicity, certainty, and precision, as those
of excise. What the revenue at present loses, by drawbacks upon
the re-exportation of foreign goods which are afterwards relanded
and consumed at home, would under this system be saved alto-
gether. If to this saving, which would alone be very considerable,
were added the abolition of all bounties upon the exportation
of home-produce; in all cases in which those bounties were not in
reality drawbacks of some duties of excise which had before been
advanced; it cannot well be doubted but that the neat revenue of
customs might, after an alteration of this kind, be fully equal to
what it had ever been before.
If by such a change of system the public revenue suffered no loss,
the trade and manufactures of the country would certainly gain a
very considerable advantage. The trade in the commodities not
taxed, by far the greatest number, would be perfectly free, and
might be carried on to and from all parts of the world with every
possible advantage. Among those commodities would be compre-
hended all the necessaries of life, and all the materials of manufac-
ture. So far as the free importation of the necessaries of life reduced
their average money price in the home market, it would reduce the
money price of labour, but without reducing in any respect its real
recompence. The value of money is in proportion to the quantity of
the necessaries of life which it will purchase. That of the necessaries
of life is altogether independent of the quantity of money which
can be had for them. The reduction in the money price of labour
would necessarily be attended with a proportionable one in that of
^®®Eds. 1-3 read “was.”
TAXES UPON CONSUMABLE COMMODITIES ^37
all home-manufactureSj which would thereby gain some advantage
in all foreign markets. The price of some manufactures would be
reduced in a still greater proportion by the free importation of the
raw materials. If raw silk could be imported from China and In-
dostan duty-free, the silk manufacturers in England could greatly
undersell those of both France and Italy. There would be no occa-
sion to prohibit the importation of foreign silks and velvets. The
cheapness of their goods would secure to our own workmen, not
only the possession of the home, but a very great command of the
foreign market. Even the trade in the commodities taxed would be
carried on with much more advantage than at present. If those
commodities were delivered out of the public warehouse for foreign
exportation, being in this case exempted from all taxes, the trade in
them would be perfectly free. The carrying trade in all sorts of
goods would under this system enjoy every possible advantage. If
those commodities were delivered out for home-consumption, the
importer not being obliged to advance the tax till he had an oppor-
tunity of selling his goods, either to some dealer, or to some con-
sumer, he could always afford to sell them cheaper than if he had
been obliged to advance it at the moment of importation. Under
the same taxes, the foreign trade of consumption even in the taxed
commodities, might in this manner be carried on with much more
advantage than it can at present.
It was the object of the famous excise scheme of Sir Robert Wal- Sir
pole to establish, with regard to wine and tobacco, a system not
very unlike that which is here proposed. But though the bill which pole's
was then brought into parliament, comprehended those two com- excise
modities only; it was generally supposed to be meant as an intro-
duction to a more extensive scheme of the same kind. Faction, com- something
bined with the interest of smuggling merchants, raised so violent, ^kis
though so unjust, a clamour against that bill, that the minister
thought proper to drop it; and from a dread of exciting a clamour wme and
of the same kind, none of his successors have dared to resume the tobacco
project. cerned.
The duties upon foreign luxuries imported for home-consump-
tion, though they sometimes fall upon the poor, fall principally duties on
upon people of middling or more than middling fortune. Such are, forei^
for example, the duties upon foreign wines, upon coffee, chocolate,
tea, sugar, &c. chiefly on
The duties upon the cheaper luxuries of home-produce destined the
for home-consumption, fall pretty equally upon people of all ranks
in proportion to their respective expence. The poor pay the duties ranks,
upon malt, hops, beer, and ale, upon their own consumption: The
Those on
the
luxuries
of home
produce
fall on
people of
all ranks.
Taxes on
the con-
sumption
of the in-
ferior
ranks are
much
more pro-
ductive
than
those on
the con-
sumption
of the
rich.
S38 the wealth of nations
rich, upon both their own consumption and that of their servants.
The whole consumption of the inferior ranks of people, or of
those below the middling rank, it must be observed, is in every
country much greater, not only in quantity, but in value, than that
of the middling and of those above the middling rank. The whole
expence of the inferior is much greater than that of the superior
ranks. In the first place, almost the whole capital of every country is
annually distributed among the inferior ranks of people, as the
wages of productive labour. Secondly, a great part of the revenue
arising from both the rent of land and the profits of stock, is
annually distributed among the same rank, in the wages and main-
tenance of menial servants, and other unproductive labourers.
Thirdly, some part of the profits of stock belongs to the same rank,
as a revenue arising from the employment of their small capitals.
The amount of the profits annually made by small shopkeepers,
tradesmen, and retailers of all kinds, is every where very consider-
able, and makes a very considerable portion of the annual produce.
Fourthly, and lastly, some part even of the rent of land belongs to
the same rank; a considerable part to those who are somewhat be-
low the middling rank, and a small part even to the lowest rank;
common labourers sometimes possessing in property an acre or two
of land. Though the expence of those inferior ranks of people,
therefore, taking them individually, is very small, yet the whole
mass of it, taking them collectively, amounts always to by much
the largest portion of the whole expence of the society; what re-
mains, of the annual produce of the land and labour of the country
for the consumption of the superior ranks, being always much less,
not only in quantity but in value. The taxes upon expence, there-
fore, which fall chiefly upon that of the superior ranks of people,
upon the smaller portion of the annual produce, are likely to be
much less productive than either those which fall indifferently upon
the expence of all ranks, or even those which fall chiefly upon ^at
of the inferior ranks ; than either those which fall indifferently upon
the whole annual produce, or those which fall chiefly upon the
larger portion of it. The excise upon the materials and manufacture
of home-made fermented and spirituous liquors is accordingly, of
all the different taxes upon expence, by far the most productive;
and this branch of the excise falls very much, perhaps principally,
upon the expence of the common people. In the year which ended
on the 5th of July 1775, the gross produce of this branch of the
excise amounted to 3,341,837^. 95.
I reads “both upon.” ^“Ed. i reads “both from.”
^“Ed, I reads “and from.” “*Ed. i reads “£3,314,223 i8s. io|d.”
TAXES UPON CONSUMABLE COMMODITIES ^39
It must always be remembered, however, that it is the luxurious But such
and not the necessary expence of the inferior ranks of people that
ought ever to be taxed. The final payment of any tax upon their never be
necessary expence would fall altogether upon the superior ranks of
people; upon the smaller portion of the annual produce, and not co^sm^.
upon the greater. Such a tax must in all cases either raise the wages tion of
of labour, or lessen the demand for it. It could not raise the wages
of labour, without throwing the final payment of the tax upon the ranks,
superior ranks of people. It could not lessen the demand for labour,
without lessening the annual produce of the land and labour of the
country, the fund from which all taxes must be finally paid. What-
ever might be the state to which a tax of this kind reduced the de-
mand for labour, it must always raise wages higher than they other-
wise would be in that state; and the final payment of this enhance-
ment of wages must in all cases fall upon the superior ranks of
people.
Fermented liquors brewed, and spirituous liquors distilled, not Liquors
for sale, but for private use, are not in Great Britain liable to any
duties of excise. This exemption, of which the object is to save pri- for pri-
vate families from the odious visit and examination of the tax- vateuse
gatherer, occasions the burden of those duties to fall frequently eSmpt
much lighter upon the rich than upon the poor. It is not, indeed, from
very common to distil for private use, though it is done sometimes.
But in the country, many middling and almost all rich and great composi-
families brew their own beer. Their strong beer, therefore, costs tion must
them eight shillings a barrel less than it costs the common brewer,
who must have his profit upon the tax, as well as upon all the ing.
other expence which he advances. Such families, therefore, must
drink their beer at least nine or ten shillings a barrel cheaper than
any liquor of the same quality can be drunk by the common peo-
ple, to whom it is every where more convenient to buy their beer,
by little and little, from the brewery or the alehouse. Malt, in the
same manner, that is made for the use of a private family, is not
liable to the visit or examination of the tax-gatherer; but in this
case the family must compound at seven shillings and sixpence a
head for the tax. Seven shillings and sixpence are equal to the excise
upon ten bushels of malt; a quantity fully equal to what all the
different members of any sober family, men, women, and children,
are at an average likely to consume. But in rich and great families,
where country hospitality is much practised, the malt liquors con-
sumed by the members of the family make but a small part of the
consumption of the house. Either on account of this composition,
Ed. I reads “is not to expose private famOies to.”
It is said
that a tax
on malt
smaller
than the
present
taxes on
malt, beer
and ale
taken to-
gether
would
bring in
more
revenue,
and
figures are
quoted to
prove it.
Taxes on
cyder and
mum in-
cluded in
the old
malt tax
are
counter-
balanced
by the
‘country
excise’
duty on
840 THE WEALTH OF NATIONS
however, or for other reasons, it is not near so common to malt as
to brew for private use. It is difficult to imagine any equitable rea-
son why those who either brew or distil for private use, should not
be subject to a composition of the same kind.
A greater revenue than what is at present drawn from all the
heavy taxes upon malt, beer, and ale, might be raised, it has fre-
quently been said, by a much lighter tax upon malt; the opportuni-
ties of defrauding the revenue being much greater in a brewery than
in a malt-house; and those who brew for private use being exempt-
ed from all duties or composition for duties, which is not the case
with those who malt for private use.
In the porter brewery of London, a quarter of malt is commonly
brewed into more than two barrels and a half, sometimes into three
barrels of porter. The different taxes upon malt amount to six
shillings a quarter; those upon strong beer and ale to eight shillings
a barrel. In the porter brewery, therefore, the different taxes upon
malt, beer, and ale, amount to between twenty-six and thirty shil-
lings upon the produce of a quarter of malt. In the country brewery
for common country sale, a quarter of malt is seldom brewed into
less than two barrels of strong and one barrel of small beer; fre-
quently into two barrels and a half of strong beer. The different
taxes upon small beer amount to one shilling and four-pence a bar-
rel. In the country brewery, therefore, the different taxes upon
malt, beer, and ale, seldom amount to less than twenty-three shil-
lings and four-pence, frequently to twenty-six shillings, upon the
produce of a quarter of malt. Taking the whole kingdom at an
average, therefore, the whole amount of the duties upon malt, beer,
and ale, cannot be estimated at less than twenty-four or twenty-five
shillings upon the produce of a quarter of malt. But by taking off
all the different duties upon beer and ale, and by tripling the malt-
tax, or by raising it from six to eighteen shillings upon the quarter
of malt, a greater revenue, it is said, might be raised by this single
tax than what is at present drawn from all those heavier taxes.
Under the old malt tax, indeed, is comprehended a tax of four
shillings upon the hogshead of cyder, and another of ten shillings
upon the barrel of mum. In 1774, the tax upon cyder produced only
3083/. 6 s Sd. It probably fell somewhat short of its usual amount;
all tie different taxes upon cyder having, that year, produced less
than ordinary. The tax upon mum, though much heavier, is still less
productive, on account of the smaller consumption of that liquor.
But'to balance whatever may be the ordinary amount of those two
taxes; there is comprehended under what is called The country
excise, first, the old excise of six shillings and eight-pence upon the
TAXES UPON CONSUMABLE COMMODITIES 841
1 . s. d.
In 1772, the old malt-tax produced 722,023 ii ri
The additional 356,776 7 pf
In 1773, the old tax produced 561,627 3 71
The additional 278,650 15 3!
In 1774, the old tax produced 624,614 17 5I
The additional 310,745 2 8J
In 1775, the old tax produced 657,357 — SJ
The additional 323,785 12 6i
4 )3335^580 12 —i
Average of these four years 958,895 3 — jV
In 1772, the country excise produced 1,243,128 5 3
The London brewery 408,260 7 2f
In 1773, the country excise 1,245,808 3 3
The London brewery 405,406 17 lof
In 1774, the country excise 1,246,373 14 5I
The London brewery 320,601 iS — -J
In 1775, the country excise 1,214,583 6 i
The London brewery 463,670 7 — |
4 )6,547,832 19 H
Average of these four years 1,636,958 4 9§
To which adding the average malt tax, or 958,895 3 —
The whole amount of these different taxes comes out
to be 2,595,853 7 9i|
But by tripling the malt tax, or by raising it from six tol
eighteen shillings upon the quarter of malt, that singlet 2,876,685 9 —-3^
tax would produce J
A sum which exceeds the foregoing by 280,832 i 2JI
hogshead of cyder; secondly, a like tax of six shillings and eight-
pence upon the hogshead of verjuice; thirdly, another of eight
shillings and nine-pence upon the hogshead of vinegar; and, lastly,
a fourth tax of eleven-pence upon the gallon of mead or metheglin:
the produce of those different taxes will probably much more than
counterbalance that of the duties imposed, by what is called The
annual malt tax upon cyder and mum.
Malt is consumed not only in the brewery of beer and ale, but in
the manufacture of low wines and spirits. If the malt tax were to
be raised to eighteen shillings upon the quarter, it might be neces-
sary to make some abatement in the different excises which are im-
posed upon those particular sorts of low wines and spirits of which
malt makes any part of the materials. In what are called Malt
spirits, it makes commonly but a third part of the materials; the
othet two-thirds being either raw barley, or one-third barley and
one-third wheat. In the distillery of malt spirits, both the oppor-
tunity and the temptation to smuggle, are much greater than either
in a brewery or in a malt-house; the opportunity, on account of
the smaller bulk and greater value of the commodity; and the
cyder,
verjuice,
vinegar
and mead.
If the
malt tax
were
raised, it
would be
proper to
reduce the
excises on
wines and
spirits
contain-
ingmalt.
^°*Eds. r-3 read “was.’
but not so
as to re-
duce the
price of
spirits.
Dr. Dave-
nant ob-
jects that
the malt-
ster’s
profits
would be
unfairly
taxed, and
the rent
and profit
of barley
land re-
duced,
S42 the wealth of nations
temptation, on account of the superior height of the duties, which
amount to 3^. upon the gallon of spirits. By increasing
the duties upon malt, and reducing those upon the distillery, both
the opportunities and the temptation to smuggle would be dimin-
ished, which might occasion a still further augmentation of revenue.
It has for some time past been the policy of Great Britain to dis-
courage the consumption of spirituous liquors, on account of their
supposed tendency to ruin the health and to corrupt the morals of
the common people. According to this policy, the abatement of the
taxes upon the distillery ought not to be so great as to reduce, in
any respect, the price of those liquors. Spirituous liquors might re-
main as dear as ever; while at the same time the wholesome and
invigorating liquors of beer and ale might be considerably reduced
in their price. The people might thus be in part relieved from one
of the burdens of which they at present complain the most; while
at the same time the revenue might be considerably augmented.
The objections of Dr. Davenant to this alteration in the present
system of excise duties, seem to be without foundation. Those ob-
jections are, that the tax, instead of dividing itself as at present
pretty equally upon the profiit of the maltster, upon that of the
brewer, and upon that of the retailer, would, so far as it affected
profit, fall altogether upon that of the maltster; that the maltster
could not so easily get back the amount of the tax in the advanced
price of his malt, as the brewer and retailer in the advanced price
of their liquor; and that so heavy a tax upon malt might reduce
the rent and profit of barley land.^®^
Though the duties directly imposed upon proof spirits amount only to
2S. 6d. per gallon, these added to the duties upon the low wines, from which
they are distilled, amount to 3s. lofd. Both low wines and proof spirits
are, to prevent frauds, now rated according to what they gauge in the wash.
This note appears first in ed. 3 ; ed. i reads “2s. 6d.” in file text instead of
“ 3 S.IO id.”
^Political and Commercial Works, ed. Sir Charles Whitworth, 1771, vol.
i., pp. 222, 223. But Davenant does not confine the effect of the existing tax
to the maltster, the brewer and the retailer. The tax, he says, “which seems
to be upon malt, does not lie all upon that commodity, as is vulgarly
thought. For a great many different persons contribute to the payment of
this duty, before it comes into the Exchequer. First, the landlord, because
of the excise, is forced to let his barley land at a lower rate ; and, upon the
same score, the tenant must sell his barley at a less price; then the maltster
bears his share, for because of the duty, he must abate something in the
price of his malt, or keep it; in a proportion it likewise affects the hop
merchant, the cooper, the collier, and all trades that have relation to the
commodity. The retailers and brewers bear likewise a great share, whose
gains of necessity will be less, because of that imposition; and, lastly, it
comes heaviest of all upon the consumers.” If the duty were put upon the
maltster, it would be “difficult for him to raise the price of a dear com-
modity a full id at once: so that he must bear the greatest part of the
TAXES UPON CONSUMABLE COMMODITIES ^43
No tax can ever reduce, for any considerable time, the rate of
profit in any particular trade, which must always keep its level with
other trades in the neighbourhood. The present duties upon malt,
beer, and ale, do not affect the profits of the dealers in those com-
modities, who all get back the tax with an additional profit, in the
enhanced price of their goods. A tax indeed may render the goods
upon which it is imposed so dear as to diminish the consumption of
them. But the consumption of malt is in malt liquors; and a tax of
eighteen shillings upon the quarter of malt could not well render
those liquors dearer than the different taxes, amounting to twenty-
four or twenty-five shillings, do at present. Those liquors, on the
contrary, would probably become cheaper, and the consumption of
them would be more likely to increase than to diminish.
It is not very easy to understand why it should be more difficult
for the maltster to get back eighteen shillings in the advanced price
of his malt, than it is at present for the brewer to get back twenty-
four or twenty-five, sometimes thirty shillings, in that of his liquor.
The maltster, indeed, instead of a tax of six shillings, would be
obliged to advance one of eighteen shillings upon every quarter of
malt. But the brewer is at present obliged to advance a tax of
twenty-four or twenty-five, sometimes thirty shillings upon every
quarter of malt which he brews. It could not be more inconvenient
for the maltster to advance a lighter tax, than it is at present for
the brewer to advance a heavier one. The maltster doth not always
keep in his granaries a stock of malt which it will require a longer
time to dispose of, than the stock of beer and ale which the brewer
frequently keeps in his cellars. The former, therefore, may fre-
quently get the returns of his money as soon as the latter. But
whatever inconveniency might arise to the maltster from being
obliged to advance a heavier tax, it could easily be remedied by
granting him a few months longer credit than is at present com-
monly given to the brewer.
Nothing could reduce the rent and profit of barley land which did
not reduce the demand for barley. But a change of system, which
reduced the duties upon a quarter of malt brewed into beer and ale
from twenty-four and twenty-five shillings to eighteen shillings,
would be more likely to increase than diminish that demand. The
rent and profit of barley land, besides, must always be nearly equal
to those of other equally fertile and equally well cultivated land. If
they were less, some part of the barley land would soon be turned
burden himself, or throw it upon the farmer, by giving less for barley, which
brings the tax directly upon the land of England.”
^'^^Ed. I does not contain “it.”
but the
change
would
make
malt
liquors
cheaper,
and so be
likely to
increase
the con-
sumption.
and the
maltster
could re-
cover
eighteen
shillings
as easily
as the
brewer at
present
recovers
twenty-
four or
thirty and
might be
given
longer
credit.
The con-
sumption
of barley
not being
reduced,
the rent
and profit
of barley
land
could not
be re-
duced, as
there is no
monop-
oly
The only
sufferers
would be
those who
brew for
private
use
S44 THE WEALTH OE NATIONS
to some other purpose, and if they were greater, more land would
soon be turned to the raising of barley. When the ordinary price of
any particular produce of land is at what may be called a monopoly
price, a tax upon it necessarily reduces the rent and profit of the
land which grows it. A tax upon the produce of those precious vine-
yards, of which the wine falls so much short of the effectual de-
mand, that its price is always above the natural proportion to that
of the produce of other equally fertile and equally well cultivated
land, would necessaiOy reduce the rent and profit of those vine-
yards. The price of the wines being already the highest that could
be got for the quantity commonly sent to market, it could not be
raised higher without diminishing that quantity; and the quantity
could not be diminished without still greater loss, because the lands
could not be turned to any other equally valuable produce. The
whole weight of the tax, therefore, would fall upon the rent and
profit; properly upon the rent of the vineyard. When it has been
proposed to lay any new tax upon sugar, our sugar planters have
frequently complained that the whole weight of such taxes fell, not
upon the consumer, but upon the producer; they never having been
able to raise the price of their sugar after the tax, higher than it was
before. The price had, it seems, before the tax been a monopoly
price; and the argument adduced to shew that sugar was an im-
proper subject of taxation, demonstrated, perhaps, that it was a
proper one; the gains of monopolists, whenever they can be come
at, being certainly of all subjects the most proper. But the ordinary
price of barley has never been a monopoly price; and the rent
and profit of barley land have never been above their natural pro-
portion to those of other equally fertile and equally well cultivated
land. The different taxes which have been imposed upon malt, beer,
and ale, have never lowered the price of barley; have never reduced
the rent and profit of barley land. The price of malt to the brewer
has constantly risen in proportion to the taxes imposed upon it;
and those taxes, together with the different duties upon beer and
ale, have constantly either raised the price, or what comes to the
same thing, reduced the quality of those commodities to the con-
sumer. The final payment of those taxes has fallen constantly upon
the consumer, and not upon the producer.
The only people likely to suffer by the change of system here pro-
posed, are those who brew for their own private use. But the ex-
emption, which this superior rank of people at present enjoy, from
very heavy taxes which are paid by the poor labourer and artificer,
is surely most unjust and unequal, and ought to be taken away,
TAXES UPON CONSUMABLE COMMODITIES ^45
even though this change was never to take place. It has probably
been the interest of this superior order of people, however, which
has hitherto prevented a change of system that could not well fail
both to increase the revenue and to relieve the people.
Besides such duties as those of customs and excise above-men- Tolls on
tioned, there are several others which affect the price of goods more
unequally and more indirectly. Of this kind are the duties which in from
French are called Peages, which in old Saxon times were called place to
Duties of Passage, and which seem to have been originally estab- feet prices
lished for the same purpose as our turnpike tolls, or the tolls upon unequal-
our canals and navigable rivers, for the maintenance of the road or
of the navigation. Those duties, when applied to such purposes, are
most properly imposed according to the bulk or weight of the goods.
As they were originally local and provincial duties, applicable to
local and provincial purposes, the administration of them was in
most cases entrusted to the particular town, parish, or lordship, in
which they were levied; suA communities being in some way or
other supposed to be accountable for the application. The sovereign,
who is altogether unaccountable, has in many countries assumed to
himself the administration of those duties; and though he has in
most cases enhanced very much the duty, he has in many entirely
neglected the application. If the turnpike tolls of Great Britain
should ever become one of the resources of government, we may
learn, by the example of many other nations, what would probably
be the consequence. Such tolls are no doubt finally paid by the con-
sumer; but the consumer is not taxed in proportion to his expence
when he pays, not according to the value, but according to the bulk
or weight of what he consumes. When such duties are imposed, not
according to the bulk or weight, but according to the supposed
value of the goods, they become properly a sort of inland customs or
excises, which obstruct very much the most important of all branch-
es of commerce, the interior commerce of the country.
In some small states duties similar to those passage duties are Some
imposed upon goods carried across the territory, either by land or countries
by water, from one foreign country to another. These are in some
countries called transit-duties. Some of the little Italian states, ’duties on
which are situated upon the Po, and the rivers which run into it,
derive some revenue from duties of this kind, which are paid alto-
gether by foreigners, and which, perhaps, are the only duties
that one state can impose upon the subjects of another, without
obstructing in any respect the industry or commerce of its own.
^ Ed, I reads “are perhaps.”
Taxes on
luxuries
do not
reach ab-
sentees,
but the
fact that
they are
paid vol-
untarily
recom-
mends
them.
846 XHE WEALTH OF NATIONS
The most important transit-duty in the world is that levied by the
king of Denmark upon all merchant ships which pass through the
Sound.
Such taxes upon luxuries as the greater part of the duties of cus-
toms and excise, though they all fall indifferently upon every
different species of revenue, and are paid finally, or without any
retribution, by whoever consumes the commodities upon which
they are imposed, yet they do not always fall equally or propor-
tionably upon the revenue of every individual. As every man^s hu-
mour regulates the degree of his consumption, every man contrib-
utes rather according to his humour than in proportion to his rev-
enue; the profuse contribute more, the parsimonious less, than their
proper proportion. During the minority of a man of great fortune,
he contributes commonly very little, by his consumption, towards
the support of that state from whose protection he derives a great
revenue. Those who live in another country contribute nothing, by
their consumption, towards the support of the government of that
country, in which is situated the source of their revenue. If in this
latter country there should be no land-tax, nor any considerable
duty upon the transference either of moveable or of immoveable
property, as in the case in Ireland, such absentees may derive a
great revenue from the protection of a government to the support
of which they do not contribute a single shilling. This inequality is
likely to be greatest in a country of which the government is in some
respects subordinate and dependent upon that of some other. The
people who possess the most extensive property in the dependent,
will in this case generally chuse to live in the governing country.
Ireland is precisely in this situation, and we cannot therefore won-
der that the proposal of a tax upon absentees should be so very
popular in that country. It might, perhaps, be a little difficult to
ascertain either what sort, or what degree of absence would sub-
ject a man to be taxed as an absentee, or at what precise time the
tax should either begin or end. If you except, however, this very
peculiar situation, any inequality in the contribution of individ-
uals, which can arise from such taxes, is much more than compen-
sated by the very circumstance which occasions that inequality;
the circumstance that every man’s contribution is altogether vol-
untary ; it being altogether in his power either to consume or not to
consume the commodity taxed. Where such taxes, therefore, are
properly assessed and upon proper commodities, they are paid with
less grumbling than any other. When they are advanced by the
merchant or manufacturer, the consumer, who finally pays them,
“^Ed. I does not contain “all.”
^ Ed. I reads “should
TA.XES UPON CONSUMABLE COMMODITIES S47
soon com^s to confound them with the price of the commodities,
and almost forgets that he pays any tax.
Such taxes are or may be perfectly certain, or may be assessed so
as to leave no doubt concerning either what ought to be paid, or
when it ought to be paid ; concerning either the quantity or the time
of payment. T^Tiatever uncertainty there may sometimes be, either
in the duties of customs in Great Britain, or in other duties of the
same kind in other countries, it cannot arise from the nature of
those duties, but from the inaccurate or unskilful manner in which
the law that imposes them is expressed.
Taxes upon luxuries generally are, and always may be, paid
piece-meal, or in proportion as the contributors have occasion to
purchase the goods upon which they are imposed. In the time and
mode of payment they are, or may be, of all taxes the most con-
venient. Upon the whole, such taxes, therefore, are, perhaps, as
agreeable to the three first of the four general maxims concerning
taxation, as any other. They offend in every respect against the
fourth.
Such taxes, in proportion to what they bring into the public
treasury of the state, always tate out or keep out of the pockets of
the people more than almost any other taxes. They seem to do this
in all the four different ways in which it is possible to do it.
First, the levying of such taxes, even when imposed in the most
judicious manner, requires a great number of customhouse and
excise officers, whose salaries and perquisites are a real tax upon
the people, which brings nothing into the treasury of the state. This
expence, however, it must be acknowledged, is more moderate in
Great Britain than in most other countries. In the year which end-
ed on the fifth of July 1775, the gross produce of the different
duties, under the management of the commissioners of excise in
England, amounted to 185. which was levied at
an expence of little more than five and a half per cent. From this
gross produce, however, there must be deducted what was paid
* away in bounties and drawbacks upon the exportation of exciseable
goods, which will reduce the neat produce below five millions,^^^
The levying of the salt duty, an excise duty, but under a different
management, is much more expensive. The neat revenue of the
customs does not amount to two millions and a half, which is levied
at an expence of more than ten per cent, in the salaries of officers,
and other incidents. But the perquisites of customhouse officers are
Ed. I reads “f 5 ) 479 j 695 7 s. lod.”
The neat produce of that year, after deducting all expences and allow-
ances, amounted to 4,975,652/, 19s. 6 d, This note appears first in ed. 2.
They are
also cer-
tain
and pay-
able at
conveni-
ent times
but take
much
more
from the
people
than they
yield to
the state,
since
(r) the
salaries
and per-
quisites of
customs
and
excise of-
ficers take
a large
propor-
tion of
what is
collected;
(2) par-
ticuhr
branches
of indus-
try are
discour-
aged;
848 the wealth of nations
every where miich greater than their salaries ; at some ports more
than double or triple those salaries. If the salaries of officers, and
other incidents, therefore, amount to more than ten per cent, upon
the neat revenue of the customs; the whole expence of levying that
revenue may amount, in salaries and perquisites together, to more
than twenty or thirty per cent. The officers of excise receive few or
no perquisites: and the administration of that branch of the revenue
being of more recent establishment, is in general less corrupted than
that of the customs, into which length of time has introduced and
authorised many abuses. By charging upon malt the whole revenue
which is at present levied by the different duties upon malt and malt
liquors, a saving, it is supposed, of more than fifty thousand pounds
might be made in the annual expence of the excise. By confining the
duties of customs to a few sorts of goods, and by levying those
duties according to the excise laws, a much greater saving might
probably be made in the annual expence of the customs.
Secondly, such taxes necessarily occasion some obstruction or
discouragement to certain branches of industry. As they always
raise the price of the commodity taxed, they so far discourage its
consumption, and consequently its production. If it is a commodity
of home growth or manufacture, less labour comes to be employed
in raising and producing it. If it is a foreign commodity of which
the tax increases in this manner the price, the commodities of the
same kind which are made at home may thereby, indeed, gain some
advantage in the home market, and a greater quantity of domestic
industry may thereby be turned toward preparing them. But though
this rise of price in a foreign commodity may encourage domestic
industry in one particular branch, it necessarily discourages that
industry in almost every other. The dearer the Birmingham manu-
facturer buys his foreign wine, the cheaper he necessarily sells that
part of his hardware with which, or, what comes to the same thing,
with the price of which he buys it. That part of his hardware, there-
fore, becomes of less value to him, and he has less encouragement to
work at it. The dearer the consumers in one country pay for the
surplus produce of another, the cheaper they necessarily sell that
part of their own surplus produce with which, or, what comes to the
same thing, with the price of which they buy it. That part of their
own surplus produce becomes of less value to them, and they have
less encouragement to increase its quantity. All taxes upon consum-
able commodities, therefore, tend to reduce the quantity of produc-
tive labour below what it otherwise would be, either in preparing
the commodities taxed, if they are home commodities; or in pre-
paring those with which they are purchased, if they are foreign
TAXES UPON CONSUMABLE COMMODITIES ^49
commodities. Such taxes too always alter, more or less, the natural
direction of national industry, and turn it into a channel always
different from, and generally less advantageous than that in which
it would have run of its own accord.
Thirdly, the hope of evading such taxes by smuggling gives fre-
quent occasion to forfeitures and other penalties, which entirely
ruin the smuggler ; a person who, though no doubt highly blameable
for violating the laws of his country, is frequently incapable of
violating those of natural justice, and would have been, in every
respect, an excellent citizen, had not the laws of his country made
that a crime which nature never meant to be so. In those corrupted
governments where there is at least a general suspicion of much un-
necessary expence, and great misapplication of the public revenue,
the laws which guard it are little respected. Not many people are
scrupulous about smuggling, when, without perjury, they can find
any easy and safe opportunity of doing so. To pretend to have any
scruple about buying smuggled goods, though a manifest encourage-
ment to the violation of the revenue laws, and to the perjury which
almost slwaYS attends it, would in most countries be regarded as
one of those pedantic pieces of hypocrisy which, instead of gaining
credit with any body, serve only to expose the person who affects
to practise them, to the suspicion of being a greater knave than
most of his neighbours. By this indulgence of the public, the smug-
gler is often encouraged to continue a trade which he is thus taught
to consider as in some measure innocent; and when the severity of
the revenue laws is ready to fall upon him, he is frequently disposed
to defend with violence, what he has been accustomed to regard as
his just property. From being at first, perhaps, rather imprudent
than criminal, he at last too often becomes one of the hardiest and
most determined violators of the laws of society. By the ruin of the
smuggler, his capital, which had before been employed in maintain-
ing productive labour, is absorbed either in the revenue of the state
or in that of the revenue-officer, and is employed in maintaining un-
productive, to the diminution of the general capital of the society,
and of the useful industry which it might otherwise have main-
tained.
Fourthly, such taxes, by subjecting at least the dealers in the
taxed commodities to the frequent visits and odious examination of
the tax-gatherers, expose them sometimes, no doubt, to some de-
gree of oppression, and always to much trouble and vexation; and
though vexation, as has already been said,^^^ is not strictly speak-
ing expence, it is certainly equivalent to the expence at which every
Above, p 779
(3) smug-
^gis
encour-
aged;
and (4)
vexation
equiva-
lent to ex-
pense is
caused by
the tax-
gatherers’
examina-
tions and
visits.
Great
Britain
suffers less
than
other
countries
from
these in-
conveni-
encies.
Duties on
commodi-
ties are
some-
times re-
peated on
each sale,
as by the
Spanish
Alcavala,
850 the wealth of nations
man would be willing to redeem himself from it. The laws of excise,
though more effectual for the purpose for which they were insti-
tuted, are, in this respect, more vexatious than those of the customs.
When a merchant has imported goods subject to certain duties of
customs, when he has paid those duties, and lodged the goods in his
warehouse, he is not in most cases liable to any further trouble or
vexation from the customhouse officer. It is otherwise with goods
subject to duties of excise. The dealers have no respite from the con-
tinual visits and examination of the excise officers. The duties of ex-
cise are, upon this account, more unpopular than those of the cus-
toms ; and so are the officers who levy them. Those officers, it is pre-
tended, though in general, perhaps, they do their duty fully as well
as those of the customs; yet, as that duty obliges them to be fre-
quently very troublesome to some of their neighbours, commonly
contract a certain hardness of character which the others frequently
have not. This observation, however, may very probably be the
mere suggestion of fraudulent dealers, whose smuggling is either
prevented or detected by their diligence.
The inconveniencies, however, which are, perhaps, in some degree
inseparable from taxes upon consumable commodities, fall as light
upon the people of Great Britain as upon those of any other coun-
try of which the government is nearly as expensive. Our state is not
perfect, and might be mended; but it is as good or better than that
of most of our neighbours.
In consequence of the notion that duties upon consumable goods
were taxes upon the profits of merchants, those duties have, in some
countries, been repeated upon every successive sale of the goods.
If the profits of the merchant importer or merchant manufacturer
were taxed, equality seemed to require that those of all the middle
buyers, who intervened between either of them and the consumer,
should likewise be taxed. The famous Alcavala of Spain seems to
have been established upon this principle. It was at first a tax of ten
per cent., afterwards of fourteen per cent., and is at present of only
six per cent, upon the sale of every sort of property, whether move-
able or immoveable; and it is repeated every time the property is
sold.^i® The levying of this tax requires a multitude of revenue-offi-
“^Memoires concemant les Droits, &c. tom. i. p. 455. “La premiere
branche, connue sous la denomination de Alcavala y Cientos, consiste dans
un droit qui se pergoit sur toutes les choses mobiliaires et immobiliaires qui
sont vendues, echangees et negocfe: ce droit qui dans le principe avoit tti
fixe a quatorze pour cent a etk depuis reduit a six pour cent.” The rest of
the information is probably from Uztariz, Theory and Practice of Com’-
merce and Maritime Agairs, trans. by John Kippax, 1751, chap. 96, ad init.,
yol. u., p. 236. “It is so very oppressive as to lay 10 per cent, for the primi-
tive Alcavala, and the four i per cents, annexed to it, a duty not only
TAXES UPON CONSUMABLE COMMODITIES ^5^
cers sufficient to guard the transportation of goods, not only from
one province to another, but from one shop to another. It subjects,
not only the dealers in some sorts of goods, but those in all sorts,
every farmer, every manufacturer, every merchant and shop-keep-
er, to the continual visits and examination of the tax-gatherers.
Through the greater part of a country in which a tax of this kind
is established, nothing can be produced for distant sale. The pro-
duce of every part of the country must be proportioned to the con-
sumption of the neighbourhood. It is to the Alcavala, accordingly,
that Ustaritz imputes the ruin of the manufactures of Spain.^^^ He
might have imputed to it likewise the declension of agriculture, it
being imposed not only upon manufactures, but upon the rude pro-
duce of the land.
In the kingdom of Naples there is a similar tax of three per cent,
upon the value of all contracts, and consequently upon that of all
contracts of sale. It is both lighter than the Spanish tax, and the
greater part of towns and parishes are allowed to pay a composition
in lieu of it. They levy this composition in what manner they please,
generally in a way that gives no interruption to the interior com-
merce of the place. The Neapolitan tax, therefore, is not near so
ruinous as the Spanish one.
The uniform system of taxation, which, with a few exceptions of
no great consequence, takes place in all the different parts of the
united kingdom of Great Britain, leaves the interior commerce of
the country, the inland and coasting trade, almost entirely free.
The inland trade is almost perfectly free, and the greater part of
goods may be carried from one end of the kingdom to the other,
without requiring any permit or let-pass, without being subject to
question, visit, or examination from the revenue officers. There are
a few exceptions, but they are such as can give no intenuption to
any important branch of the inland commerce of the country.
Goods carried coastwise, indeed, require certificates or coast cock-
ets. If you except coals, however, the rest are almost all duty-free.
This freedom of interior commerce, the effect of the uniformity of
the system of taxation, is perhaps one of the principal causes of the
prosperity of Great Britain; every great country being necessarily
the best and most extensive market for the greater part of the pro-
ductions of its own industry. If the same freedom, in consequence
chargeable on the first sale, but on every future sale of goods, I am jealous,
it is one of the principal engines, that contributed to the ruin of most of
our manufactures and trade. For though these duties are not charged to the
full in some places, a heavy tax is paid.”
“•'^See the preceding note. Uztariz’ opinion is quoted by Lord Karnes,
Sketches oj the History of Man^ 1774, vol. i, p. 516.
and the 3
per cent,
tax at
Naples.
Great ad-
vantage is
obtained
by the
uniform-
ity of
taxation
in Great
Britain.
In France
the diver-
sity of
taxes in
different
provinces
occasions
many
hind-
rances to
internal
trade,
852 the wealth of nations
of the same uniformity, could be extended to Ireland and the plan-
tations, both the grandeur of the state and the prosperity of every
part of the empire, would probably be still greater than at present.
In France, the different revenue laws which take place in the dif-
ferent provinces, require a multitude of revenue-officers to sur-
round, not only the frontiers of the kingdom, but those of almost
each particular province, in order either to prevent the importation
of certain goods, or to subject it to the payment of certain duties,
to the no small interruption of the interior commerce of the coun-
try. Some provinces are allowed to compound for the gabelle or salt-
tax. Others are exempted from it altogether. Some provinces are
exempted from the exclusive sale of tobacco, which the tarmers-
general enjoy through the greater part of the kingdom. The aids,
which correspond to the excise in England, are very different in dif-
ferent provinces. Some provinces are exempted from them, and pay
a composition or equivalent. In those in which they take place and
are in farm, there are many local duties which do not extend beyond
a particular town or district. The Traites, which correspond to our
customs, divide the kingdom into three great parts; first, the prov-
inces subject to the tarif of 1664, which are called the provinces of
the five great farms, and under which are comprehended Picardy,
Normandy, and the greater part of the interior provinces of the
kingdom; secondly, the provinces subject to the tarif of 1667,
which are called the provinces reckoned foreign, and under which
are comprehended the greater part of the frontier provinces; and,
thirdly, those provinces which are said to be treated as foreign, or
which, because they are allowed a free commerce with foreign
countries, are in their commerce with the other provinces of France
subjected to the same duties as other foreign countries. These are
Alsace, the three bishopricks of Metz, Toul, and Verdun, and the
three cities of Dunkirk, Bayonne, and Marseilles. Both in the prov-
inces of the five great farms {called so on account of an ancient
division of the duties of customs into five great branches, each of
which was originally the subject of a particular farm, though they
are now all united into one), and in those which are said to be
reckoned foreign, there are many local duties which do not extend
beyond a particular town or district. There are some such even in
the provinces which are said to be treated as foreign, particularly
in the city of Marseilles. It is unnecessary to observe how much,
both the restraints upon the interior commerce of the country, and
the number of the revenue officers must be multiplied, in order to
guard the frontiers of those different provinces and districts, which
are subject to such different systems of taxation.
TAXES UPON CONSUMABLE COMMODITIES ^53
Over and above the general restraints arising from this compli-
cated system of revenue laws, the commerce of wine, after corn
perhaps the most important production of France, is in the greater
part of the provinces subject to particular restraints, arising from
the favour which has been shewn to the vineyards of particular
provinces and districts, above those of others. The provinces most
famous for their wines, it will be found, I believe, are those in
which the trade in that article is subject to the fewest restraints of
this kind. The extensive market which such provinces enjoy, en-
courages good management both in the cultivation of their vine-
yards, and in the subsequent preparation of their wines.
Such various and complicated revenue laws are not peculiar to
France. The little dutchy of Milan is divided into six provinces, in
each of which there is a different system of taxation with regard to
several different sorts of consumable goods. The still smaller terri-
tories of the duke of Parma are divided into three or four, each of
which has, in the same manner, a system of its own. Under such
absurd management, nothing, but the great fertility of the soil and
happiness of the climate, could preserve such countries from soon
relapsing into the lowest state of poverty and barbarism.
Taxes upon consumable commodities may either be levied by an
administration of which the officers are appointed by government
and are immediately accountable to government, of which the rev-
enue must in this case vary from year to year, according to the oc-
casional variations in the produce of the tax; or they may be let
in farm for a rent certain, the farmer being allowed to appoint his
own officers, who, though obliged to levy the tax in the manner di-
rected by the law, are under his immediate inspection, and are im-
mediately accountable to him. The best and most frugal way of
levying a tax can never be by farm. Over and above what is neces-
sary for paying the stipulated rent, the salaries of the officers, and
the whole expense of administration, the farmer must always draw
from the produce of the tax a certain profit proportioned at least
to the advance which he makes, to the risk which he runs, to the
trouble which he is at, and to the knowledge and skill which it re-
quires to manage so very complicated a concern. Government, by
establishing an administration under their own immediate inspec-
tion, of the same kind with that which the farmer establishes, might
at least save this profit, which is almost always exorbitant. To farm
any considerable branch of the public revenue, requires either a
great capital or a great credit; circumstances which would alone
restrain the competition for such an undertaking to a very small
number of people. Of the few who have this capital or credit, a still
and the
commerce
in wine is
subject to
particular
restraints.
Milan
and
Parma
are still
more ab-
surdly
managed
The col-
lection of
taxes by
govern-
ment offi-
cers is
much su-
perior to
letting the
taxes to
farm.
Farmers
of taxes
require
sanguin-
ary reve-
nue laws.
Taxation
by mo-
nopolies
let to
farm is
even
worse.
S54 THE WEALTH OF NATIONS
smaller number have the necessary knowledge or experience; an-
other circumstance which restrains the competition still further.
The very few, who are in condition to become competitors, find it
more for their interest to combine together; to become co-partners
instead of competitors, and when the farm is set up to auction, to
offer no rent, but what is much below the real value. In countries
where the public revenues are in farm, the farmers are generally
the most opulent people. Their wealth would alone excite the pub-
lic indignation, and the vanity which almost always accompanies
such upstart fortunes, the foolish ostentation with which they com-
monly display that wealth, excites that indignation still more.
The farmers of the public revenue never find the laws too severe,
which punish any attempt to evade the payment of a tax. They
have no bowels for the contributors, who are not their subjects, and
whose universal bankruptcy, if it should happen the day after their
farm is expired, would not much affect their interest. In the great-
est exigencies of the state, when the anxiety of the sovereign for the
exact payment of his revenue is necessarily the greatest, they sel-
dom fail to complain that without laws more rigorous than those
which actually take place, it will be impossible for them to pay
even the usual rent. In those moments of public distress their de-
mands cannot be disputed. The revenue laws, therefore, become
gradually more and more severe. The most sanguinary are always
to be found in countries where the greater part of the public rev-
enue is in farm. The mildest, in countries where it is levied under
the immediate inspection of the sovereign. Even a bad sovereign
feels more compassion for his people than can ever be expected
from the farmers of his revenue. He knows that the permanent
grandeur of his family depends upon the prosperity of his people^
and he will never knowingly ruin that prosperity for the sake of
any momentary interest of his own. It is otherwise with the farm-
ers of his revenue, whose grandeur may frequently be the effect of
the ruin, and not of the prosperity of his people.
A tax is sometimes, not only farmed for a certain rent,^^^ but the
farmer has, besides, the monopoly of the commodity taxed. In
France, the duties upon tobacco and salt are levied in this man-
ner, In such cases the farmer, instead of one, levies two exorbitant
profits upon the people; the profit of the farmer, and the still more
exorbitant one of the monopolist. Tobacco being a luxury, every
man is allowed to buy or not to buy as he chuses. But salt being a
necessary, every man is obliged to buy of the farmer a certain
quantity of it; because, if he did not buy this quantity of the farm-
^^Ed. I reads ‘‘rent certain.” ^“Ed. i reads “the taxes.”
TAXES UPON CONSUMABLE COMMODITIES ^55
er, he would, it is presumed, buy it of some smuggler. The taxes
upon both commodities are exorbitant. The temptation to smug-
gle consequently is to many people irresistible, while at the same
time the rigour of the law, and the vigilance of the farmer’s officers,
render the 3delding to that temptation almost certainly ruinous.
The smuggling of salt and tobacco sends every year several hun-
dred people to the gallies, besides a very considerable number
whom it sends to the gibbet. Those taxes levied in this manner yield
a very considerable revenue to government. In 1767, the farm of
tobacco was let for twenty-two millions five hundred and forty-
one thousand two hundred and seventy-eight livres a year. That
of salt, for thirty-six millions four hundred and ninety-two thou-
sand four hundred and four livres. The farm in both cases was to
commence in 1768, and to last for six years. Those who consider
the blood of the people as nothing in comparison with the revenue
of the prince, may perhaps approve of this method of levying taxes.
Similar taxes and monopolies of salt and tobacco have been es-
tablished in many other countries; particularly in the Austrian and
Prussian dominions, and in the greater part of the states of Italy.
In France, the greater part of the actual revenue of the crown is
derived from eight different sources; the taille, the capitation, the
two vingtiemes, the gabelles, the aides, the traites, the domaine,
and the farm of tobacco. The five last are, in the greater part of the
provinces, under farm. The three first are every where levied by an
administration under the immediate inspection and direction of
government, and it is universally acknowledged that, in proportion
to what they take out of the pockets of the people, they bring more
into the treasury of the prince than the other five, of which the ad-
ministration is much more wasteful and expensive.
The finances of France seem, in their present state, to admit of
three very obvious reformations. First, by abolishing the taille and
the capitation, and by encreasing the number of vingtiemes, so as
to produce an additional revenue equal to the amount of those
other taxes, the revenue of the crown might be preserved; the ex-
pence of collection might be much diminished; the vexation of the
inferior ranks of people, which the taille and capitation occasion,
might be entirely prevented; and the superior ranks might not be
more burdened than the greater part of them are at present. The
vingtieme, I have already observed, is a tax very nearly of the
same kind with what is called the land-tax of England. The burden
of the taille, it is acknowledged, falls finally upon the proprietors
of land; and as the greater part of the capitation is assessed upon
^ Above, p. 809.
In France
the three
branches
of reve-
nue which
are levied
by gov-
ernment
officers
are much
more eco-
nomical.
The taille
and capi-
tations
should be
abolished,
the vingt-
iemes in-
creased,
the taxes
on com-
modities
made uni^
form, and
farming
aboUshed
The
French
system is
in every
respect
inferior
to the
British.
ss6 the wealth of nations
those who are subject to the taille at so much a pound of that other
tax, the final payment of the greater part of it must likewise fall
upon the same order of people. Though the number of the ving*
tiemes, therefore, was increased so as to produce an additional rev-
enue equal to the amount of both those taxes, the superior ranks of
people might not be more burdened than they are at present. Many
individuals no doubt would, on account of the great inequalities
with which the taille is commonly assessed upon the estates and
tenants of different individuals. The interest and opposition of
such favoured subjects are the obstacles most likely to prevent this
or any other reformation of the same kind. Secondly, by rendering
the gabelle, the aides, the traites,^^^ the taxes upon tobacco, all the
different customs and excises, uniform in all the different parts
of the kingdom, those taxes might be levied at much less expence,
and the interior commerce of the kingdom might be rendered as
free as that of England. Thirdly, and lastly, by subjecting all those
taxes to an administration under the immediate inspection and di-
rection of government, the exorbitant profits of the farmers general
might be added to the revenue of the state. The opposition arising
from the private interest of individuals, is likely to be as effectual
for preventing the two last as the first mentioned scheme of
reformation.
The French system of taxation seems, in every respect, inferior
to the British. In Great Britain ten millions sterling are annually
levied upon less than eight millions of people, without its being
possible to say that any particular order is oppressed. From the
collections of the Abbe Expilly,^^^ and the observations of the au-
thor of the Essay upon the legislation and commerce of corn,^^^ it
appears probable, that France, including the provinces of Lorraine
and Bar, contains about twenty-three or twenty-four millions of
people; three times the number perhaps contained in Great Britain.
The soil and climate of France are better than those of Great Brit-
ain. The country has been much longer in a state of improvement
^ Ed. I does not contain “the traites.”
These estimates seem to have been quoted in England at the time, since
the Continuation of Anderson’s Commerce, under the year 1773, mentions
“the calculations of the Abbe D’Expilly published about this time in Paris,”
which gave 8,661,381 births and 6,664,161 deaths as the number taking place
in the nine years, 1754 to 1763, in France, inclusive of Lorraine and Bar.
In his Dictionnaire giographique, historique et politique des Gaules et de
la France, tom. v. (1768), sv. Population, Expilly estimated the population
at 22,014,337. See Levasseur, La Population Jrangaise, tom. i., 1889, PPt- 215
and 216 note
'^Sur la Ugislation et le commerce des grains (by Necker), 1775, ch viii,
estimates the population at 24,181,333 by the method of multiplying the
deaths by 31.
TAXES UPON CONSUMABLE COMMODITIES ^57
and cultivation, and is, upon that account, better stocked with all
those things which it requires a long time to raise up and accumu-
late, such as great towns, and convenient and well-built houses,
both in town and country. With these advantages, it might be ex-
pected that in France a revenue of thirty millions might be levied
for the support of the state, with as little inconveniency as a rev-
enue of ten millions is in Great Britain. In 1765 and 1766, the
whole revenue paid into the treasury of France, according to the
best, though, I acknowledge, very imperfect, accounts which I
could get of it, usually run between 308 and 325 millions of livres;
that is, it did not amount to fifteen millions sterling; not the half
of what might have been expected, had the people contributed in
the same proportion to their numbers as the people of Great Brit-
ain. The people of France, however, it is generally acknowledged,
are much more oppressed by taxes than the people of Great Britain.
France, however, is certainly the great empire in Europe which,
after that of Great Britain, enjoys the mildest and most indulgent
government.
In Holland the heavy taxes upon the necessaries of life have
ruined, it is said, their principal manufactures, and are likely to
discourage gradually even their fisheries and their trade in ship-
building. The taxes upon the necessaries of life are inconsiderable
in Great Britain, and no manufacture has hitherto been ruined by
them. The British taxes which bear hardest on manufactures are
some duties upon the importation of raw materials, particularly
upon that of raw silk. The revenue of the states general and of the
different cities, however, is said to amount to more than five mil-
lions two hundred and fifty thousand pounds sterling; and as the
inhabitants of the United Provinces cannot well be supposed to
amount to more than a third part of those of Great Britain, they
must, in proportion to their number, be much more heavily taxed.
After all the proper subjects of taxation have been exhausted, if
the exigencies of the state still continue to require new taxes, they
must be imposed upon improper onesP^ The taxes upon the neces-
saries of life, therefore, may be no impeachment of the wisdom of
that republic, which, in order to acquire and to maintain its inde-
pendency, has, in spite of its great frugality, been involved in such
expensive wars as have obliged it to contract great debts. The sin-
gular countries of Holland and Zealand, besides, require a consider-
able expence even to preserve their existence, or to prevent their
being swallowed up by the sea, which must have contributed to
increase considerably the load of taxes in those two provinces. The
^ Below, p. 881.
In Hol-
land
heavy
taxes on
neces-
saries
have
ruined
manufac-
tures.
But per-
haps Hol-
land has
done the
best
possible.
Above, pp. 826, 827.
858 the wealth OF NATIONS
republican form of government seems to be the principal support
of the present grandeur of Holland. The owners of great capitals,
the great mercantile families, have generally either some direct
share, or some indirect influence, in the administration of that gov-
ernment. For the sake of the respect and authority which they de-
rive from this situation, they are willing to live in a country where
their capital, if they employ it themselves, will bring them less pro-
fit, and if they lend it to another, less interest; and where the very
moderate revenue which they can draw from it will purchase less
of the necessaries and conveniencies of life than in any other part
of Europe. The residence of such wealthy people necessarily keeps
alive, in spite of all disadvantages, a certain degree of industry in
the country. Any public calamity which should destroy the repub-
lican form of government, which should throw the whole adminis-
tration into the hands of nobles and of soldiers, which should anni-
hilate altogether the importance of those wealthy merchants would
soon render it disagreeable to them to live in a country where they
were no longer likely to be much respected. They would remove
both their residence and their capital to some other country, and
the industry and commerce of Holland would soon follow the cap-
itals which supported them.
CHAPTER III
OF PUBLIC DEBTS
In that rude state of society which precedes the extension of com-
merce and the improvement of manufactures, when those expen-
sive luxuries which commerce and manufactures can alone intro-
duce, are altogether unknown, the person who possesses a large
revenue, I have endeavoured to show in the third book of this In-
quiry,^ can spend or enjoy that revenue in no other way than by
maintaining nearly as many people as it can maintain. A large rev-
enue may at all times be said to consist in the command of a large
quantity of the necessaries of life. In that rude state of things it is
commonly paid in a large quantity of those necessaries, in the ma-
terials of plain food and coarse clothing, in corn and cattle, in wool
and raw hides. When neither commerce nor manufactures furnish
any thing for which the owner can exchange the greater part of
those materials which are over and above his own consumption, he
can do nothing with the surplus but feed and clothe nearly as many
people as it will feed and clothe. A hospitality in which there is no
luxury, and a liberality in which there is no ostentation, occasion,
in this situation of things, the principal expences of the rich and the
great. But these, I have likewise endeavoured to show in the same
book, 2 are expences by which people are not very apt to ruin them-
selves. There is not, perhaps, any selfish pleasure so frivolous, of
which the pursuit has not sometimes ruined even sensible men. A
passion for cock-fighting has ruined many. But the instances, I be-
lieve, are not very numerous of people who have been ruined by a
hospitality or liberality of this kind; though the hospitality of lux-
ury and the liberality of ostentation have ruined many. Among our
feudal ancestors, the long time during which estates used to con-
tinue in the same family, sufficiently demonstrates the general dis-
position of people to live within their income. Though the rustic
hospitality, constantly exercised by the great land-holders, may
® Above, p. 391
859
When ex-
pensive
luxuries
are un-
known,
persons
with large
revenue
are likely
to hoard
savings
^ Above, pp. 38s, 386,
86o
So the
ancient
sover-
eigns of
Europe
amassed
treasures.
THE WEALTH OF NATIONS
not, to us in the present time#, seem consistent with that order,
which we are apt to consider as inseparably connected with good
(economy, yet we must certainly allow them to have been at least
so far frugal as not commonly to have spent their whole income. A
part of their wool and raw hides they had generally an opportunity
of selling for money. Some part of this money, perhaps, they spent
in purchasing the few objects of vanity and luxury, with which the
circumstances of the times could furnish them; but some part of it
they seem commonly to have hoarded. They could not well indeed
do an 3 d;hing else but hoard whatever money they saved. To trade
was disgraceful to a gentleman, and to lend money at interest,
which at that time was considered as usury and prohibited by law,
would have been still more so. In those times of violence and dis-
order, besides, it was convenient to have a hoard of money at hand,
that in case they should be driven from their own home, they might
have something of known value to carry with them to some place of
safety. The same violence, which made it convenient to hoard,
made it equally convenient to conceal the hoard. The frequency of
treasure-trove, or of treasure found of which no owner was known,
sufficiently demonstrates the frequency in those times both of
hoarding and of concealing the hoard. Treasure-trove was then
considered as an important branch of the revenue of the sovereign.*"^
All the treasure-trove of the kingdom would scarce perhaps in the
present times make an important branch of the revenue of a pri-
vate gentleman of a good estate.
The same disposition to save and to hoard prevailed in the sover-
eign, as well as in the subjects. Among nations to whom commerce
and manufactures are little known, the sovereign, it has already
been observed in the fourth book,^ is in a situation which naturally
disposes him to the parsimony requisite for accumulation. In that
situation the expence even of a sovereign cannot be directed by that
vanity which delights in the gaudy finery of a court. The ignorance
of the times affords but few of the trinkets in which that finery con-
sists. Standing armies are not then necessary, so that the expence
even of a sovereign, like that of any other great lord, can be em-
ployed in scarce any thing but bounty to his tenants, and hospital-
ity to his retainers. But bounty and hospitality very seldom lead
to extravagance; though vanity almost always does.® All the an-
cient sovereigns of Europe accordingly, it has already been ob-
served, had treasures. Every Tartar chief in the present times is
said to have one.
®Cp. pp. 268, 269. ^ Above, p. 414.
" Repeated verbatim from p. 414.
PUBLIC DEBTS
In a commercial country abounding with every sort of expensive
luxury, the sovereign, in the same manner as almost all the great
proprietors in his dominions, naturally spends a great part of his
revenue in purchasing those luxuries. His own and the neighbour-
ing countries supply him abundantly with all the costly trinkets
which compose the splendid, but insignificant pageantry of a court.
For the sake of an inferior pageantry of the same kind, his nobles
dismiss their retainers, make their tenants independent, and be-
come gradually themselves as insignificant as the greater part of
the wealthy burghers in his dominions. The same frivolous passions,
which influence their conduct, influence his. How can it be supposed
that he should be the only rich man in his dominions who is insen-
sible to pleasures of this kind? If he does not, what he is very likely
to do, spend upon those pleasures so great a part of his revenue as
to debilitate very much the defensive power of the state, it cannot
well be expected that he should not spend upon them all that part
of it which is over and above what is necessary for supporting that
defensive power. His ordinary expence becomes equal to his ordi-
nary revenue, and it is well if it does not frequently exceed it. The
amassing of treasure can no longer be expected, and when extra-
ordinary exigencies require extraordinary expences, he must neces-
sarily call upon his subjects for an extraordinary aid. The present
and the late king of Prussia are the only great princes of Europe,
who, since the death of Henry IV. of France in i6io, are supposed
to have amassed any considerable treasure.® The parsimony which
leads to accumulation has become almost as rare in republican as in
monarchical governments. The Italian republics, the United Prov-
inces of the Netherlands, are all in debt. The canton of Berne is the
single republic in Europe which has amassed any considerable treas-
ure.^ The other Swiss republics have not. The taste for some sort
of pageantry, for splendid buildings, at least, and other public orna-
ments, frequently prevails as much in the apparently sober senate-
house of a little republic, as in the dissipated court of the greatest
king.
The want of parsimony in time of peace, imposes the necessity of
contracting debt in time of war. When war comes, there is no money
in the treasury but what is necessary for carrying on the ordinary
expence of the peace establishment. In war an establishment of
three or four times that expence becomes necessary for the defence
of the state, and consequently a revenue three or four times greater
than the peace revenue. Supposing that the sovereign should have,
what he scarce ever has, the immediate means of augmenting his
” Above, p. 410. ’Above, p. 772.
When
luxuries
are intro-
duced, the
sover-
eign’s ex-
penditure
equals his
revenue
in time of
peace,
and in
time of
war he
contracts
debts.
862
THE WEALTH OE NATIONS
The same
causes
which
make bor-
rowing
necessary
make it
possible
Mer-
chants
and
manufac-
turers are
able to
lend,
and also
wilKng.
revenue in proportion to the augmentation of his expence, yet still
the produce of the taxes, from which this increase of revenue must
be drawn, will not begin to come into the treasury till perhaps ten
or twelve months after they are imposed. But the moment in which
war begins, or rather the moment in which it appears likely to be-
gin, the army must be augmented, the fleet must be fitted out, the
garrisoned towns must be put into a posture of defence; that army,
that fleet, those garrisoned towns must be furnished with arms, am-
munition, and provisions. An immediate and great expence must be
incurred in that moment of immediate danger, which will not wait
for the gradual and slow returns of the new taxes. In this exigency
government can have no other resource but in borrowing.
The same commercial state of society which, by the operation of
moral causes, brings government in this manner into the necessity
of borrowing, produces in the subjects both an ability and an in-
clination to lend. If it commonly brings along with it the necessity
of borrowing, it likewise brings along ® with it the facility of doing
so.
A country abounding with merchants and manufacturers, neces-
sarily abounds with a set of people through whose hands not only
their own capitals, but the capitals of all those who either lend them
money, or trust them with goods, pass as frequently, or more fre-
quently, than the revenue of a private man, who, without trade or
business, lives upon his income, passes through his hands. The rev-
enue of such a man can regularly pass through his hands only once
in a year. But the whole amount of the capital and credit of a mer-
chant, who deals in a trade of which the returns are very quick,
may sometimes pass through his hands two, three, or four times in
a year. A country abounding with merchants and manufacturers,
therefore, necessarily abounds with a set of people who have it at
all times in their power to advance, if they chuse to do so, a very
large sum of money to government. Hence the ability in the subjects
of a commercial state to lend.
Commerce and manufactures can seldom flourish long in any
state which does not enjoy a regular administration of justice, in
which the people do not feel themselves secure in the possession of
their property, in which the faith of contracts is not supported by
law, and in which the authority of the state is not supposed to be
regularly employed in enforcing the payment of debts from all
those who are able to pay. Commerce and manufactures, in short,
can seldom flourish in any state in which there is not a certain de-
gree of confidence in the justice of government. The same confi-
® Ed 5 omits “along,” doubtless by a misprint
PUBLIC DEBTS ^^3
dence which disposes great merchants and manufacturers, upon or-
dinary occasions, to trust their property to the protection of a par-
ticular government; disposes them, upon extraordinary occasions,
to trust that government with the use of their property. By lending
money to government, they do not even for a moment diminish
their ability to carry on their trade and manufactures. On the con-
trary, they commonly augment it. The necessities of the state ren-
der government upon most occasions willing to borrow upon terms
extremely advantageous to the lender. The security which it grants
to the original creditor, is made transferable to any other creditor,
and, from, the universal confidence in the justice of the state, gen-
erally sells in the market for more than was originally paid for it.
The merchant or monied man makes money by lending money to
government, and instead of diminishing, increases his trading capi-
tal. He generally considers it as a favour, therefore, when the ad-
ministration admits him to a share in the first subscription for a
new loan. Hence the inclination or willingness in the subjects of a
commercial state to lend.
The government of such a state is very apt to repose itself upon
this ability and willingness of its subjects to lend it their money on
extraordinary occasions. It foresees the facility of borrowing, and
therefore dispenses itself from the duty of saving.
In a rude state of society there are no great mercantile or manu-
facturing capitals. The individuals, who hoard whatever money they
can save, and who conceal their hoard, do so from a distrust of the
justice of government, from a fear that if it was known that they
had a hoard, and where that hoard was to be found, they would
quickly be plundered. In such a state of things few people would be
able, and no body would be willing, to lend their money to govern-
ment on extraordinary exigencies. The sovereign feels that he must
provide for such exigencies by saving, because he foresees the abso-
lute impossibility of borrowing. This foresight increases still fur-
ther his natural disposition to save.
The progress of the enormous debts which at present oppress, and
will in the long-run probably ruin, all the great nations of Europe,
has been pretty uniform. Nations, like private men, have generally
begun to borrow upon what may be called personal credit, without
assigning or mortgaging any particular fund for the payment of the
debt; and when this resource has failed them, they have gone on to
borrow upon assignments or mortgages of particular funds.
What is called the unfunded debt of Great Britain, is contracted
in the former of those two ways. It consists partly in a debt which
bears, or is supposed to bear, no interest, and which resembles the
A govern-
ment dis-
penses it-
self from
saving if
it knows
it can
borrow,
whereas if
there is no
possibility
of bor-
rowing, it
feels it
must
save.
Nations
have be-
gun to
borrow
without
special
security
and have
after-
wards
mort-
gaged
particular
funds.
THE WEALTH OF NATIONS
The un-
funded
debt of
Great
Britain is
con-
tracted in
the first
way.
Mort-
gages of
particular
branches
of reve-
nue are
either for
a term of
years,
when
money is
said to be
raised by
S64
debts that a private man contracts upon account; and partly in a
debt which bears interest, and which resembles what a private man
contracts upon his bill or promissory note. The debts which are due
either for extraordinary services, or for services either not provided
for, or not paid at the time when they are performed; part of the
extraordinaries of the army, navy, and ordnance, the arrears of sub-
sidies to foreign princes, tiose of seamen’s wages, &c. usually con-
stitute a debt of the first kind. Navy and Exchequer bills, which
are issued sometimes in payment of a part of such debts and some-
times for other purposes, constitute a debt of the second kind; Ex-
chequer bills bearing interest from the day on which they are issued,
and navy bills six months after they are issued. The bank of Eng-
land, either by voluntarily discounting those bills at their current
value, or by agreeing with government for certain considerations to
circulate Exchequer bills, that is, to receive them at par, paying
the interest which happens to be due upon them, keeps up their
value and facilitates their circulation, and thereby frequently en-
ables government to contract a very large debt of this kind. In
France, where there is no bank, the state bills (billets d’etat
have sometimes sold at sixty and seventy per cent, discount. Dur-
ing the great re-coinage in King William’s time, when the bank of
England thought proper to put a stop to its usual transactions, Ex-
chequer bills and tallies are said to have sold from twenty-five to
sixty per cent, discount; owing partly, no doubt, to the supposed
instability of the new government established by the Revolution,
but partly too to the want of the support of the bank of England.
TOen this resource* is exhausted, and it becomes necessary, in or-
der to raise money, to assign or mortgage some particular branch of
the public revenue for the payment of the debt, government has up-
on different occasions done this in two different ways. Sometimes it
has made this assignment or mortgage for a short period of time
only, a year, or a few years, for example; and sometimes for per-
petuity. In the one case, the fund was supposed sufficient to pay,
within the limited time, both principal and interest of the money
borrowed. In the other, it was supposed sufficient to pay the inter-
est only, or a perpetual annuity equivalent to the interest, govern-
®See Examen des Reflexions politiques sur les Finances. P. J. Duverney,
Examen du Uvre intitide Reflexions politiques sur les finances et le com-
merce (by Du Tot), tom. i., p. 225.
James Postlethwayt, History of the Public Revenue, 1759, PP i 5 j
mentions discounts of 25 and 55 per cent. The discount varied with the
priority of the tallies and did not measure the national credit in general, but
the probability of particular taxes bringing in enough to pay the amounts
charged upon them. See also above, p. 302.
PUBLIC DEBTS
865
merit being at liberty to redeem at any time this annuity, upon pay-
ing back the principal sum borrowed. When money was raised in
the one way, it was said to be raised by anticipation; when in the
other, by perpetual funding, or, more shortly, by funding.
In Great Britain the annual land and malt taxes are regularly
anticipated every year, by virtue of a borrowing clause constantly
inserted into the acts which impose them. The bank of England gen-
erally advances at an interest, which since the Revolution has varied
from eight to three per cent, the sums for which those taxes are
granted, and receives payment as their produce gradually comes in.
If there is a deficiency, which there always is, it is provided for in
the supplies of the ensuing year. The only considerable branch of
the public revenue which yet remains unmortgaged is thus regular-
ly spent before it comes in. Like an improvident spendthrift,
whose pressing occasions will not allow him to wait for the regular
payment of his revenue, the state is in the constant practice of bor-
rowing of its own factors and agents, and of paying interest for
the use of its own money.
In the reign of king William, and during a great part of that of
queen Anne, before we had become so familiar as we are now with
the practice of perpetual funding, the greater part of the new taxes
were imposed but for a short period of time (for four, five, six, or
seven years only), and a great part of the grants of every year con-
sisted in loans upon anticipations of the produce of those taxes. The
produce being frequently insufficient for paying within the limited
term the principal and interest of the money borrowed, deficiencies
arose, to mal^e good which it became necessary to prolong the term.
In 1697, by the 8th of William III. c. 20. the deficiencies of sev-
eral taxes were charged upon what was then called the first general
mortgage or fund, consisting of a prolongation to the first of Au-
gust, 1706, of several different taxes, which would have expired
within a shorter term, and of which the produce was accumulated
Into one general fund. The deficiencies charged upon this prolonged
Term amounted to S;i6o,459/. 145.
In 1701, those duties, with some others, were still further pro-
longed for the like purposes till the first of August, 1710, and were
called the second general mortgage or fund.’’® The deficiencies
charged upon it amounted to 2,055,999^ 7^. ii\d.
In 1707, those duties were still further prolonged, as a fund for
new loans, to the first of August, 1712, and were called the third
^^Ed. I reads “unprovident/’ as do all editions below, p. 867.
Postlelhwayt, op. cit., p. 38. Ed. 5 misprints “9§d.”
“ Postlethwayt, op. p. 40.
anticipa-
tion, or in
perpetu-
ity, when
it is said
to be
raised by
funding.
The an-
nual land
and malt
taxes are
always
anticipat-
ed.
Under
William
III. and
Anne an-
ticipa-
tions gave
rise to de-
ficiencies,
and the
term of
the mort-
gage taxes
was pro-
longed in
1697,
in 1701,
in 1707,
866
in 1708,
in 1709,
and in
1710.
In 1711
the taxes
were con-
tinued for
ever and
made into
a fund for
paying
the inter-
est on i9,-
177,968.
The only
earlier
taxes im-
posed in
perpetu-
ity to pay
interest
on debt
were
those for
paying
interest
on the
advances
of the
THE WEALTH OF NATIONS
general mortgage or fund. The sum borrowed upon it was 983,254/.
us. g^d.
In 1708, those duties were all (except the old subsidy of tonnage
and poundage, of which one moiety only was made a part of this
fund, and a duty upon the importation of Scotch linen, which had
been taken off by the articles of union) still further continued, as a
fund for new loans, to the first of August, 1714, and were called the
fourth general mortgage or fund.^^ The sum borrowed upon it was
925,176/. 9^.
In 1709, those duties were all (except the old subsidy of tonnage
and poundage, which was now left out of this fund altogether) still
further continued for the same purpose to the first of August, 1716
and were called the fifth general mortgage or fund.^^ The sum bor-
rowed upon it was 922,029/. 6^. od.
In 1710, those duties were again prolonged to the first of August,
1720, and were called the sixth general mortgage or fund.^^ The
sum borrowed upon it was 1,296,552/. gs. iifrf.
In 1711, the same duties (which at this time were thus subject
to four different anticipations), together with several others, were
continued for ever, and made a fund for paying the interest of the
capital of the South Sea company, which had that year advanced
to government, for paying debts and making good deficiencies, the
sum of 9,177,967/. 1 5^. 4^.; the greatest loan which at that time
had ever been made.
Before this period, the principal, so far as I have been able to
observe, the only taxes which in order to pay the interest of a debt
had been imposed for perpetuity, were those for paying the interest
of the money which had been advanced to government by the Bank
and East India Company, and of what it was expected would be
advanced, ‘but which was never advanced, by a projected land
bank. The bank fund at this time amounted to 3,375,027/. 175.
lo^d. for which was paid an annuity or interest of 206,501/. 13^.
5^.^^ The East India fund amounted to 3,200,000/. for which was
paid an annuity or interest of 160,000/.; the bank fund being at
six per cent.,^^ the East India fund at five per cent, interest.
In 1715, by the first of George I. c. 12. the different taxes which
had been mortgaged for paying the bank annuity, together with sev-
p. 59. ^Ibid., pp. 63, 64. ^"^Ibid., p. 68.
^'^Ibid.^ p. 71. ^Ibid.f p. 311.
^^Ibid., pp. 301-303, and see above, p. 303.
^Ibid.y pp. 319, 320.
®^The odd £4,000 of the £206,501 13s. sd. was for expenses of management.
See above, p. 303.
PUBLIC DEBTS
867
eral others which by this act were likewise rendered perpetual, were
accumulated into one common fund called The Aggregate Fund,
which was charged, not only with the pa5nnents of the bank an-
nuity, but with several other annuities and burdens of different
kinds. This fund was afterwards augmented by the third of George
1. c. 8. and by the fifth of George L c. 3. and the different duties
which were then added to it were likewise rendered perpetual.^^
In 1717, by the third of George I. c. 7.^^ several other taxes were
rendered perpetual, and accumulated into another common fund,
called The General Fund, for the pa5mient of certain annuities,
amounting in the whole to 724,849^. 6s. io|d.
In consequence of those different acts, the greater part of the
taxes which before had been anticipated only for a short term of
years, were rendered perpetual as a fund for paying, not the capi-
tal, but the interest only, of the money which had been borrowed
upon them by different successive anticipations.
Had money never been raised but by anticipation, the course of
a few 3/ears would have liberated the public revenue, without any
other attention of government besides that of not overloading the
fund by charging it with more debt than it could pay within the
limited term, and of not anticipating a second time before the ex-
piration of the first anticipation. But the greater part of European
governments have been incapable of those attentions. They have
frequently overloaded the fund even upon the first anticipation;
and when this happened not to be the case, they have generally
taken care to overload it, by anticipating a second and a third time
before the expiration of the first anticipation. The fund becoming
in this manner altogether insufficient for paying both principal and
interest of the money borrowed upon it, it became necessary to
charge it with the interest only, or a perpetual annuity equal to the
interest, and such unprovident anticipations necessarily gave birth
to the more ruinous practice of perpetual funding. But though this
practice necessarily puts off the liberation of the public revenue from
a fixed period to one so indefinite that it is not very likely ever to
arrive; yet as a greater sum can in all cases be raised by this new
practice than by the old one of anticipations, the former, when men
have once become familiar with it, has in the great exigencies of the
state been universally preferred to the latter. To relieve the present
exigency is always the object which principally interests those im-
“^Ed. 1 reads “payment,” perhaps correctly,
^ Postlethwayt, History of the Public Revenue, p. 305
®*This Act belongs to 1716, not 1717.
Bank and
East
India
Company.
In 1715
several
taxes were
accumu-
lated into
the Ag-
gregate
Fund,
and in
1717 sev-
eral
others
into the
General
Fund,
Thus
most of
the an-
ticipated
taxes
were
made into
a fund for
paying in-
terest
only.
When
once be-
come fa-
miliar,
perpetual
funding is
preferred
to antici-
pation.
A fall in
the miar-
ket rate
of interest
led to a
saving,
which
gave rise
to the
Sinking
Fund.
A sinking
fund faci-
litates the
contrac-
tion of
new debt.
Money is
also bor-
rowed by
termin-
able and
life an-
nuities.
Under
William
III. and
868 the wealth OF NATIONS
mediately concerned in the administration of public affairs. The
future liberation of the public revenue, they leave to the care of
posterity.
During the reign of queen Anne, the market rate of interest had
fallen from six to five per cent., and in the twelfth year of her reign
five per cent, was declared to be the highest rate which could law-
fully be taken for money borrowed upon private security Soon
after the greater part of the temporary taxes of Great Britain had
been rendered perpetual, and distributed into the Aggregate, South
Sea, and General Funds, the creditors of the public, like those of
private persons, were induced to accept of five per cent, for the in-
terest of their money,^® which occasioned a saving of one per cent,
upon the capital of the greater part of the debts which had been
thus funded for perpetuity, or of one-sixth of the greater part of
the annuities which were paid out of the three great funds above
mentioned. This saving left a considerable surplus in the produce of
the different taxes which had been accumulated into those funds,
over and above what was necessary for paying the annuities which
were now charged upon them, and laid the foundation of what has
since been called the Sinking Fund. In 1717, it amounted to 323,-
434^. 75. 7^,^^ In 1727, the interest of the greater part of the
public debts was still further reduced to four per cent.; and in
1733 and 1757, to three and a half and three per cent.; which
reductions still further augmented the sinking fund.
A sinking fund, though instituted for the payment of old, facili-
tates very much the contracting of new debts. It is a subsidiary
fund always at hand to be mortgaged in aid of any other doubtful
fund, upon which money is proposed to be raised in any exigency
of the state. Whether the sinking fund of Great Britain has been
more frequently applied to the one or to the other of those two pur-
poses, will sufficiently appear by and by.
Besides those two methods of borrowing, by anticipations and by
perpetual funding, there are two other methods, which hold a sort
of middle place between them. These are, that of borrowing upon
annuities for terms of years, and that of borrowing upon annuities
for lives.
During the reigns of king William and queen Anne, large sums
were frequently borrowed upon annuities for terms of years, which
were sometimes longer and sometimes shorter. In 1693, 2,ct was
® Above, pp 88, 89.
“In 1717, under the provisions of 3 Geo. I., c. 7. Postlethwayt, History
of the Public Revenue, pp. 120, 145.
Anderson, Commerce, a.d. 1717. a.d. 1727.
“This should be 1750. Anderson, Commerce^ a.d. 1749.
PUBLIC DEBTS
passed for borrowing one million upon an annuity of fourteen per
cent.,^^ or of 140,000^. a year, for sixteen years. In 1691, an act
was passed for borrowing a million upon annuities for lives, upon
terms which in the present times would appear very advantageous.
But the subscription was not filled up. In the following year the
deficiency was made good by borrowing upon annuities for lives at
fourteen per cent., or at little more than seven years purchase. In
169s, the persons who had purchased those annuities were allowed
to exchange them for others of ninety-six years, upon pa3H[ng into
the Exchequer sixty-three pounds in the hundred; that is, the dif-
ference between fourteen per cent, for life, and fourteen per cent,
for ninety-six years, was sold for sixty-three pounds, or for four and
a half years purchase. Such was the supposed instability of govern-
ment, that even these terms procured few purchasers. In the reign
of queen Anne, money was upon different occasions borrowed both
upon annuities for lives, and upon annuities for terms of thirty-two,
of eighty-nine, of ninety-eight, and of ninety-nine years. In 1719,
the proprietors of the annuities for thirty-two years were induced
to accept in lieu of them South Sea stock to the amount of eleven
and a half years purchase of the annuities, together with an addi-
tional quantity of stock equal to the arrears which happened then
to be due upon them.^^ In 1720, the greater part of the other an-
nuities for terms of years both long and short were subscribed into
the same fund. The long annuities at that time amounted to 666,-
82 iZ. 8 j. 3^. a year.^^ On the 5th of January, 1775, the remain-
der of them, or what was not subscribed at that time, amounted
only to 136,453?. 12^. 8^.
During the two wars which begun in 1739 and in 1755, little
money was borrowed either upon annuities for terms of years, or
upon those for lives. An annuity for ninety-eight or ninety-nine
years, however, is worth nearly as much money as a perpetuity, and
should, therefore, one might think, be a fund for borrowing nearly
as much. But those who, in order to make family settlements, and
to provide for remote futurity, buy into the public stocks, would
not care to purchase into one of which the value was continually
diminishing; and such people make a very considerable proportion
both of the proprietors and purchasers of stock. An annuity for a
long term of years, therefore, though its intrinsic value may be very
nearly the same with that of a perpetual annuity, will not find near-
ly the same number of purchasers. The subscribers to a new loan,
who mean generally to sell their subscription as soon as possible,
5 and 6 W. and M., c. 7. 4 W. and M., c. 3.
Anderson, Commerce, a.d. 1719. ^Ibid., a.d. 1720.
Anne
large
sums were
borrowed
on annu-
ities for
terms of
years.
But little
money
was so
borrowed
in the
wars of
the
middle of
the eigh-
teenth
century,
most
people
preferring
a perpet-
ual an-
nuity,
and an-
nuities for
terms and
for lives
were only
given as
pre-
miums.
Tontines
are pre-
ferred to
annuities
on separ-
ate lives,
though
they do
not liber-
ate the
public
revenue
so quick-
ly.
In France
a much
greater
propor-
tion of
the whole
debt is in
life annu-
ities than
in Eng-
land,
S70 the wealth of nations
prefer greatly a perpetual annuity redeemable by parliament, to an
irredeemable annuity for a long term of years of only equal amount.
The value of the former may be supposed always the same, or very
nearly the same; and it makes, therefore, a more conyenient trans-
ferable stock than the latter.
During the two last mentioned wars, annuities, either for terms
of years or for lives, were seldom granted but as premiums to the
subscribers to a new loan, over and above the redeemable annuity
or interest upon the credit of which the loan was supposed to be
made. They were granted, not as the proper fund upon which the
money was borrowed; but as an additional encouragement to the
lender.
Annuities for lives have occasionally been granted in two dif-
ferent ways; either upon separate lives, or upon lots of lives, which
in French are called Tontines, from the name of their inventor.
When annuities are granted upon separate lives, the death of every
individual annuitant disburthens the public revenue so far as it was
affected by his annuity. When annuities are granted upon tontines,
the liberation of the public revenue does not commence till the
death of all the annuitants comprehended in one lot, which may
sometimes consist of twenty or thirty persons, of whom the sur-
vivors succeed to the annuities of all those who die before them;
the last survivor succeeding to the annuities of the whole lot. Upon
the same revenue more money can always be raised by tontines
than by annuities for separate lives. An annuity, with a right of sur-
vivorship, is really worth more than an equal annuity for a sepa-
rate life, and from the confidence which every man naturally has
in his own good fortune, the principle upon which is founded the
success of all lotteries, such an annuity generally sells for some-
thing more than it is worth. In countries where it is usual for gov-
ernment to raise money by granting annuities, tontines are upon
this account generally preferred to annuities for separate lives. The
expedient which will raise most money, is almost always preferred
to that which is likely to bring about in the speediest manner the
liberation of the public revenue.
In France, a much greater proportion of the public debts consists
in annuities for lives than in England. According to a memoir pre-
sented by the parliament of Bourdeaux to the king in 1764, the
whole public debt of France is estimated at twenty-four hundred
millions of livres; of which the capital for which annuities for lives
had been granted, is supposed to amount to three hundred millions,
the eighth part of the whole public debt. The annuities themselves
are computed to amount to thirty millions a year, the fourth part
PUBLIC DEBTS
871
of one hundred and twenty millions, the supposed interest of that
whole debt. These estimations, I know very well, are not exact, but
having been presented by so very respectable a body as approxima-
tions to the truth, they may, I apprehend, be considered as such. It
is not the different degrees of anxiety in the two governments of
France and England for the liberation of the public revenue, which
occasions this difference in their respective modes of borrowing. It
arises altogether from the different views and interests of the
lenders.
In England, the seat of government being in the greatest mer- thedffer-
cantile city in the world, the merchants are generally the people
who advance money to government. By advancing it they do not fact that
mean to diminish, but, on the contrary, to increase their mercan- in Eng-
tile capitals; and unless they expected to sell with some profit their
share in the subscription for a new loan, they never would sub- are mer-
scribe. But if by advancing their money they were to purchase, in- chants,
stead of perpetual annuities, annuities for lives only, whether their
own or those of other people, they would not always be so likely to
sell them with a profit. Annuities upon their own lives they would
always sell with loss; because no man will give for an annuity upon
the life of another, whose age and state of health are nearly the
same with his own, the same price which he would give for one up-
on his own. An annuity upon the life of a third person, indeed, is,
no doubt, of equal value to the buyer and the seller; but its real
value begins to diminish from the moment it is granted, and con-
tinues to do so more and more as long as it subsists. It can never,
therefore, make so convenient a transferable stock as a perpetual
annuity, of which the real value may be supposed always the same,
or very nearly the same.
In France the seat of government not being in a great mercantile whereas
city, merchants do not make so great a proportion of the people France
who advance money to government. The people concerned in the person^
finances, the farmers general, the receivers of the taxes which are engaged
not in farm, the court bankers, &c. make the greater part of those
who advanced their money in all public exigencies. Such people are
commonly men of mean birth, but of great wealth, and frequently lection of
of great pride. They are too proud to marry their equals, and wo-
men of quality disdain to marry them. They frequently resolve, chiefly
therefore, to live bachelors, and having neither any families of their bachelors,
own, nor much regard for those of their relations, whom they are
not always very fond of acknowledging, they desire only to live in
splendour during their own time, and are not unwilling that their
fortune should end with themselves. The number of rich people, be-
The sys-
tem of
perpetual
funding
prevents
the people
from feel-
ing dis-
tinctly the
burden of
war.
Their
burdens
are not
reduced
on the
conclu-
sion of
peace.
S72 the wealth of nations
sides, who are either averse to marry, or whose condition of life ren-
ders it either improper or inconvenient for them to do so, is much
greater in France than in England. To such people, who have little
or no care for posterity, nothing can be more convenient than to
exchange their capital for a revenue, which is to last just as long,®^
and no longer than they wish it to do.
The ordinary expence of the greater part of modern governments
in time of peace being equal or nearly equal to their ordinary rev-
enue, when war comes, they are both unwilling and unable to in-
crease their revenue in proportion to the increase of their expence.
They are unwilling, for fear of offending the people, who by so
great and so sudden an increase of taxes, would soon be disgusted
with the war; and they are unable, from not well knowing what
taxes would be sufficient to produce the revenue wanted. The facil-
ity of borrowing delivers them from the embarrassment which this
fear and inability would otherwise occasion. By means of borrow-
ing they are enabled, with a very moderate increase of taxes, to
raise, from year to year, money sufficient for carrying on the war,
and by the practice of perpetual funding they are enabled, with the
smallest possible increase of taxes, to raise annually the largest pos-
sible sum of money. In great empires the people who live in the
capital, and in the provinces remote from the scene of action, feel,
many of them, scarce any inconveniency from the war; but enjoy,
at their ease, the amusement of reading in the newspapers the ex-
ploits of their own fleets and armies. To them this amusement com-
pensates the small difference between the taxes which they pay on
account of the war, and those which they had been accustomed to
pay in time of peace. They are commonly dissatisfied with the re-
turn of peace, which puts an end to their amusement, and to a thou-
sand visionary hopes of conquest and national glory, from a longer
continuance of the war.
The return of peace, indeed, seldom relieves them from the great-
er part of the taxes imposed during the war. These are mortgaged
for the interest of the debt contracted in order to carry it on. If,
over and above paying the interest of this debt, and defraying the
ordinary expence of government, the old revenue, together with the
new taxes, produce some surplus revenue, it may perhaps be con-
verted into a sinking fund for paying off the debt. But, in the first
place, this sinking fund, even supposing it should be applied to no
other purpose, is generally altogether inadequate for paying, in the
course of any period during which it can reasonably be expected
that peace should continue, the whole debt contracted during the
Ed. I reads “just as long as.’’
^73
PUBLIC DEBTS
war; and, in the second place, this fund is almost always applied
to other purposes.
The new taxes were imposed for the sole purpose of paying the
interest of the money borrowed upon them. If they produce more,
it is generally something which was neither intended nor expected,
and is therefore seldom very considerable. Sinking funds have gen-
erally arisen, not so much from any surplus of the taxes which was
over and above what was necessary for paying the interest or an-
nuity originally charged upon them, as from a subsequent reduc-
tion of that interest. That of Holland in 1655, and that of the ec-
clesiastical state in 1685, were both formed in this manner.®^ Hence
the usual insufficiency of such funds.
During the most profound peace, various events occur which re-
quire an extraordinary expence, and government finds it always
more convenient to defray this expence by misapplying the sinking
fund than by imposing a new tax. Every new tax is immediately
felt more or less by the people. It occasions always some murmur,
and meets with some opposition. The more taxes may have been
multiplied, the higher they may have been raised upon every dif-
ferent subject of taxation; the more loudly the people complain of
every new tax, the more difficult it becomes too either to find out
new subjects of taxation, or to raise much higher the taxes already
imposed upon the old. A momentary suspension of the payment of
debt is not immediately felt by the people, and occasions neither
murmur nor complaint. To borrow of the sinking fund is always an
obvious and easy expedient for getting out of the present difficulty.
The more the public debts may have been accumulated, the more
necessary it may have become to study to reduce them, the more
dangerous, the more ruinous it may be to misapply any part of the
sinking fund; the less likely is the public debt to be reduced to any
considerable degree, the more likely, the more certainly is the sink-
ing fund to be misapplied towards defraying all the extraordinary
expences which occur in time of peace. When a nation is already
overburdened with taxes, nothing but the necessities of a new war,
nothing but either the animosity of national vengeance, or the anx-
iety for national security, can induce the people to submit, with
tolerable patience, to a new tax. Hence the usual misapplication of
the sinking fund.
In Great Britain, from the time that we had first recourse to the
ruinous expedient of perpetual funding, the reduction of the public
debt in time of peace, has never borne any proportion to its ac-
“ Anderson, Commerce^ mentions these reductions under their dates, and
recalls them in reference to the British reduction in 1717.
Any new
taxes im-
posed are
larely
sufficient
to do
more than
pay the
new in-
terest.
Sinking
funds
arise gen-
erally
from re-
ductions
of inter-
est,
and are
constant-
ly mis-
applied.
The Brit-
ish debt
had its
origin in
the war of
1688-97,
which left
a debt of
twenty-
one and a
half mil-
lions.
This was
reduced
by five
millions
in 1697-
1701.
From
1702 to
1722 the
increase
was
thirty-
nine mil-
lions, and
from 1723
to 1739
the re-
duction
was only
eight and
one-third
millions.
From
1739 to
1748 the
increase
was
thirty-
one and
one-third
millions.
During
the peace
of 1748-
SS the re-
duction
was six
millions,
and the
seven
874 the wealth of nations
cumulation in time of war. It was in the war which began in 1688,
and was concluded by the treaty of Ryswick in 1697, that the foun-
dation of the present enormous debt of Great Britain was first laid.
On the 3 ist of December 1697, the public debts of Great Britain,
funded and unfunded, amounted to 21,515,742^. 135. A
great part of those debts had been contracted upon short anticipa-
tions, and some part upon annuities for lives; so that before the
31st of December 1701, in less than four years, there had partly
been paid off, and partly reverted to the public, the sum of 5,121,-
041^. I2S. ofd.; a greater reduction of the public debt than has
ever since been brought about in so short a period of time. The re-
maining debt, therefore, amounted only to 16,394,701^. is. 7}d.
In the war which began in 1702, and which was concluded by
the treaty of Utrecht, the public debts were still more accumulated.
On the 31st of December 1714, they amounted to 53,681,076/. ss.
6-^d. The subscription into the South Sea fund of the short
and long annuities increased the capital of the public debts, so
that on the 31st of December 1722, it amounted to 55,282,978/.
IS. The reduction of the debt began in 1723, and went on
so slowly that, on the 31st of December 1739, during seventeen
years of profound peace, the whole sum paid off was no more than
8,328,354/. 17s. ii-^d. the capital of the public debt at that
time amounting to 46,954,623/. $s. 4^d.
The Spanish war, which began in 1739, and the French war
which soon followed it, occasioned a further increase of the debt,
which, on the 31st of December 1748, after the war had been con-
cluded by the treaty of Aix la Chapelle, amounted to 78,293,313/.
15 . lofd. The most profound peace of seventeen years continu-
ance had taken no more than 8,328,354/. 175. ii-^d. from it.
A war of less than nine years continuance added 31,338,689/. 185.
6^. to it.^'^
During the administration of Mr. Pelham, the interest of the pub-
lic debt was reduced, or at least measures were taken for reducing
it, from four to three per cent.; the sinking fund was increased,
and some part of the public debt was paid off. In 1755, before the
breaking out of the late war, the funded debt of Great Britain
amounted to 72,289,673/.^^ On the 5th of January 1763, at the
conclusion of the peace, the funded debt amounted to 122,603,-
Ed. I reads “long and short.”
®^See James Postlethwayfs history of the public revenue. Pp. 42, 143-
145, 147, 224, 300. The reference covers the three paragraphs in the text
above.
Above, p. 868.
® Present State of the Nation (above, p. 411), p. 28.
PUBLIC DEBTS ^75
336/. 8^. The unfunded debt has been stated at 13,927,589/. years’ war
2^. 2d, But the expence occasioned by the war did not end with
the conclusion of the peace; so that though, on the 5th of Janu- seventy-
ary 1764, the funded debt was increased (partly by a new loan, five,
and partly by funding a part of the unfunded debt) to 129,586,-
789/. 10^. there still remained (according to the very well
informed author of the Considerations on the trade and finances of
Great Britain) an unfunded debt which was brought to account
in that and the following year, of 9,975,017/. 12^. 2^d, In 1764,
therefore, the public debt of Great Britain, funded and unfunded
together, amounted, according to this author, to 139,561,807/. 2^.
4^.^^ The annuities for lives too, which had been granted as pre-
miums to the subscribers to the new loans in 1757, estimated at
fourteen years purchase, were valued at 472,500/.; and the annui-
ties for long terms of years, granted as premiums likewise, in 1761
and 1762, estimated at 27^ years purchase, were valued at 6,826,-
875/.^® During a peace of about seven years continuance, the pru-
dent and truly patriot administration of Mr. Pelham, was not able
to pay off an old debt of six millions. During a war of nearly the
same continuance, a new debt of more than seventy-five millions
was contracted.
On the sth of January 1775, the funded debt of Great Britain In the
amounted to 124,996,086/. i^. 6^d. The unfunded, exclusive of a
large civil list debt, to 4,150,236/. 35. iiftf. Both together, to 129,- peace be-
146,322/. 5^. td. According to this account the whole debt paid off fore
during eleven years profound peace amounted only to 10,415,474/.
i6j. 9jd. Even this small reduction of debt, however, has not been reduction
all made from the savings out of the ordinary revenue of the state.
Several extraneous sums, altogether independent of that ordinary
revenue, have contributed towards it. Amongst these we may lions, and
reckon an additional shilling in the pound land tax for three years;
the two millions received from the East India company, as indem- due to
Anderson, CommercBj postscript ad init.
the expenses of the war did not cease with its operations.”—
siderations (see a few lines below), p. 4.
p. 5.
The account is given in the Continuation of Anderson’s Commerce, a.t>.
1764, vol. iv., p. 58, in ed. of 1801. The ‘‘Jd.” should be “Jd ”
Considerations on the Trade and Finances of this Kingdom and on the
measures of administration with respect to those great national objects since
the conclusion of the peace, by Thomas Whately, 1766 (often ascribed to
George Grenville), p. 22.
““This is the amount obtained by adding the two items mentioned, and
is the reading of ed. i. Eds. 2-5 all read “ii39,5i6,8o7 2s. 4d.,” which is
doubtless a misprint. The total is not given in Considerations,
Considerations, p. 4. Ed. i reads “Among.”
reduc-
tions of
interest.
S76 the wealth oe nations
nification for their territorial acquisitions; and the one hundred and
ten thousand pounds received from the bank for the renewal of
their charter. To these must be added several other sums which, as
they arose out of the late war, ought perhaps to be considered as
deductions from the expences of it. The principal are,
The produce of French prizes
Composition for French prisoners ....
What has been received from the sale of the ceded 1
islands J
/. j.
690,449 18
670,000 0
9S,Soo 0
d,
9
0
0
Total, 1 , 455,949 18 9
If we add to this sum the balance of the earl of Chatham’s and Mr.
Calcraft’s accounts, and other army savings of the same kind, to-
gether with what has been received from the bank, the East India
company, and the additional shilling in the pound land tax; the
whole must be a good deal more than five millions. The debt, there-
fore, which since the peace has been paid out of the savings from
the ordinary revenue of the state, has not, one year with another,
amounted to half a million a year. The sinking fund has, no doubt,
been considerably augmented since the peace, by the debt which
has been paid off, by the reduction of the redeemable four per cents,
to three per cents., and by the annuities for lives which have fallen
in, and, if peace were to continue, a million, perhaps, might now
be annually spared out of it towards the discharge of the debt. An-
other million, accordingly, was paid in the course of last year; but,
at the same time, a large civil list debt was left unpaid, and we are
now involved in a new war which, in its progress, may prove as ex-
pensive as any of our former wars.^^ The new debt which will prob-
ably be contracted before the end of the next campaign, may per-
haps be nearly equal to all the old debt which has been paid off
from the savings out of the ordinary revenue of the state. It would
be altogether chimerical, therefore, to expect that the public debt
should ever be completely discharged by any savings which are
likely to be made from that ordinary revenue as it stands at present.
Above, p. 54S, note 43. Eds. 1-3 read “was.”
“It has proved more expensive than any of our former wars; and has in-
volved us in an additional debt of more than one hundred millions. During
a profound peace of eleven years, little more than ten millions of debt was
paid; during a war of seven years, more than one hundred millions was
contracted. This note appears first in ed. 3
PUBLIC DEBTS
877
The public funds of the different indebted nations of Europe, Theopin-
particularly those of England, have by one author been represented
as the accumulation of a great capital superadded to the other cap- tional
ital of the country, by means of which its trade is extended, its debt is an
manufactures multiplied, and its lands cultivated and improved capitalis^
much beyond what they could have been by means of that other altogether
capital only.®^ He does not consider that the capital which the first erroneous,
creditors of the public advanced to government, was, from the mo-
ment in which they advanced it, a certain portion of the annual
produce turned away from serving in the function of a capital, to
serve in that of a revenue; from maintaining productive labourers
to maintain unproductive ones, and to be spent and wasted, gen-
erally in the course of the year, without even the hope of any fu-
ture reproduction. In return for the capital which they advanced
they obtained, indeed, an annuity in the public funds in most cases
of more than equal value. This annuity, no doubt, replaced to them
their capital, and enabled them to carry on their trade and business
to the same or pethaps to a greater extent than before; that is, they
were enabled either to borrow of other people a new capital upon
the credit of this annuity, or by selling it to get from other people a
new capital of their own, equal or superior to that which they had
advanced to government. This new capital, however, which they in
this manner either bought or borrowed of other people, must have
existed in the country before, and must have been employed as all
capitals are, in maintaining productive labour. When it came into
the hands of those who had advanced their money to government,
though it was in some respects a new capital to them, it was not so
to the country; but was only a capital withdrawn from certain em-
ployments in order to be turned towards others. Though it re-
placed to them what they had advanced to government, it did not
replace it to the country. Had they not advanced this capital to
government, there would have been in the country two capitals,
two portions of the annual produce, instead of one, employed in
maintaining productive labour.
When for defraying the expence of government a revenue is When
raised within the year from the produce of free or unmortgaged iiecessary
taxes, a certain portion of the revenue of private people is only '
turned away from maintaining one species of unproductive labour, met by
“Garnier’s note, Recherches etc,, tom. iv., p. 501, is “Pinto: Traiti de la
Circulation et du Cridit,^’ a work published in 1771 (“Amsterdam”), “par
Tauteur de Tessai sur le luxe,” of which sec esp. pp. 44, 45, 209-2 ii. But an
English essay of 1731 to the same effect is quoted by Melon, Essai Politique
sur le Commerce, chap, xxiii., ed. of 1761, p. 296, and Melon seems to be
referred to below, p. 879. Cp. Lectures, p. 210,
taxes, it
only di-
verts un-
produc-
tive
labour
from one
unpro-
ductive
employ-
ment to
another.
When it is
met by
borrow-
ing, it di-
verts
labour
from pro-
ductive
to unpro-
ductive
employ-
ment, and
the only
advantage
is that
people
can con-
tinue to
save more
during
the war,
which ad-
vantage
disap-
pears im-
mediately
peace is
conclud-
ed.
Under the
other
system,
too, wars
would be
shorter
and peri-
ods of
peace
longer.
878 the wealth of nations
towards maintaining another. Some part of what they pay in those
taxes might no doubt have been accumulated into capital, and con-
sequently employed in maintaining productive labour; but the
greater part would probably have been spent and consequently em-
ployed in maintaining unproductive labour. The public expence,
however, when defrayed in this manner, no doubt hinders more or
less the further accumulation of new capital; but it does not neces-
sarily occasion the destruction of any actually existing capital.
When the public expence is defrayed by funding, it is defrayed
by the annual destruction of some capital which had before existed
in the country; by the perversion of some portion of the annual
produce which had before been destined for the maintenance of
productive labour, towards that of unproductive labour. As in this
case, however, the taxes are lighter than they would have been, had
a revenue sufficient for defraying the same expence been raised
within the year; the private revenue of individuals is necessarily
less burdened, and consequently their ability to save and accumu-
late some part of that revenue into capital is a good deal less im-
paired. If the method of funding destroy more old capital, it at
the same time hinders less the accumulation or acquisition of new
capital, than that of defra3dng the public expence by a revenue
raised within the year. Under the system of funding, the frugality
and industry of private people can more easily repair the breaches
which the waste and extravagance of government may occasionally
make in the general capital of the society.
It is only during the continuance of war, however, that the sys-
tem of funding has this advantage over the other system. Were the
expence of war to be defrayed always by a revenue raised within
the year, the taxes from which that extraordinary revenue was
drawn would last no longer than the year. The ability of private
people to accumulate, though less during the war, would have been
greater during the peace than under the system of funding. War
would not necessarily have occasioned the destruction of any old
capitals, and peace would have occasioned the accumulation of
many more new. Wars would in general be more speedily con-
cluded, and less wantonly undertaken. The people feeling, during
the continuance of the war, the complete burden of it, would soon
grow weary of it, and government, in order to humour them, would
not be under the necessity of carrying it on longer than it was
necessary to do so. The foresight of the heavy and unavoidable
burdens of war would hinder the people from wantonly calling for
it when there was no real or solid interest to fight for. The seasons
Eds. 1-3 read the, indicative, “destroys.”
PUBLIC DEBTS ^79
during which the ability of private people to accumulate was some-
what impaired, would occur more rarely, and be of shorter continu-
ance. Those on the contrary, during which that ability was in the
highest vigour, would be of much longer duration than they can
well be under the system of funding.
When funding, besides, has made a certain progress, the multi-
plication of taxes which it brings along with it sometimes impairs
as much the ability of private people to accumulate even in time of
peace, as the other system would in time of war. The peace revenue
of Great Britain amounts at present to more than ten millions a
year. If free and unmortgaged it might be sufficient, with proper
management and without contracting a shilling of new debt, to
carry on the most vigorous war. The private revenue of the inhab-
itants of Great Britain is at present as much encumbered in time of
peace, their ability to accumulate is as much impaired as it would
have been in the time of the most expensive war, had the pernicious
system of funding never been adopted.
In the pa3nnent of the interest of the public debt, it has been
said, it is the right hand which pays the left.®^ The money does not
go out of the country. It is only a part of the revenue of one set of
the inhabitants which is transferred to another; and the nation is
not a farthing the poorer. This apology is founded altogether in the
sophistry of the mercantile system, and after the long examination
which I have already bestowed upon that system, it may perhaps
be unnecessary to say any thing further about it. It supposes, be-
sides, that the whole public debt is owing to the inhabitants of the
country, which happens not to be true; the Dutch, as well as sev-
eral other foreign nations, having a very considerable share in our
public funds. But though the whole debt were owing to the inhab-
itants of the country, it would not upon that account be less per-
nicious.
Land and capital stock are the two original sources of all revenue
both private and public. Capital stock pays the wages of produc-
tive labour, whether employed in agriculture, manufactures, or
commerce. The management of those two original sources of rev-
enue belongs to two different sets of people; the proprietors of land,
and the owners or employers of capital stock.
The proprietor of land is interested for the sake of his own rev-
enue to keep his estate in as good condition as he can, by building
Misprinted “it” in ed. 5.
“ “Les Dcttes d’un fitat sent des dettes de la main droite a la main gauche,
dont le corps ne se trouvera point affaibli, s’il a la quantite d’aliments n6ces-
saires, et s’il sait les distribuer.”— Melon, Essai politique sur le Commerce,
chap, xxiii., ed. of 1761, p. 296.
Moreover
funding
at length
burdens
the reve-
nue so
greatly
that the
ordinary
peace ex-
penditure
exceeds
that
which
would
under the
other sys-
tem have
been suf-
ficient in
war.
The fact
of part or
the whole
of the
debt be-
ing held
at home
makes no
difference
Land and
capital,
the two
original
sources of
all reve-
nue, are
managed
by land-
lords and
owners ol
capital.
Taxation
may di-
minish or
destroy
the land-
lord’s
ability to
improve
his land,
and in-
duce the
owner of
capital to
remove it
from the
country.
The
transfer-
ence of
the
sources of
revenue
from the
owners of
particu-
lar por-
tions of
them to
the cred-
itors of
the public
must oc-
casion
neglect of
land and
waste or
removal
of capital.
880 XHE WEALTH OF NATIONS'
and repairing his tenants' houses, by making and maintaining the
necessary drains and enclosures, and all those other expensive im-
provements which it properly belongs to the landlord to make and
maintain. But by different land-taxes the revenue of the landlord
may be so much diminished; and by different duties upon the
necessaries and conveniences of life, that diminished revenue may
be rendered of so little real value, that he may find himself alto-
gether unable to make or maintain those expensive improvements.
When the landlord, however, ceases to do his part, it is altogether
impossible that the tenant should continue to do his. As the distress
of the landlord increases, the agriculture of the country must
necessarily decline.
When, by different taxes upon the necessaries and conveniences
of life, the owners and employers of capital stock find, that what-
ever revenue they derive from it, will not, in a particular country,
purchase the same quantity of those necessaries and conveniences
which an equal revenue would in almost any other, they will be
disposed to remove to some other. And when, in order to raise those
taxes, all or the greater part of merchants and manufacturers, that
is, all or the greater part of the employers of great capitals, come to
be continually exposed to the mortifying and vexatious visits of the
tax-gatherers, this disposition to remove will soon be changed into
an actual removal. The industry of the country will necessarily fall
with the removal of the capital which supported it, and the ruin of
trade and manufactures will follow the declension of agriculture.
To transfer from the owners of those two great sources of rev-
enue, land and capital stock, from the persons immediately in-
terested in the good condition of every particular portion of land,
and in the good management of every particular portion of capital
stock, to another set of persons (the creditors of the public, who
have no such particular interest), the greater part of the revenue
arising from either, must, in the long-run, occasion both the neg-
lect of land, and the waste or removal of capital stock. A creditor
of the public has no doubt a general interest in the prosperity of the
agriculture, manufactures, and commerce of the country; and con-
sequently in the good condition of its lands, and in the good man-
agement of its capital stock. Should there be any general failure or
declension in any of these things, the produce of the different taxes
might no longer be sufficient to pay him the annuity or interest
which is due to him. But a creditor of the public, considered merely
as such, has no interest in the good condition of any particular por-
tion of land, or in the good management of any particular portion
of capital stock. As a creditor of the public he has no knowledge of
88i
PUBLIC DEBTS
any such particular portion. He has no inspection of it. He can
have no care about it. Its ruin may in some cases be unknown to
him, and cannot directly affect him.
The practice of funding has gradually enfeebled every state Theprac-
which has adopted it. The Italian republics seem to have begun it.
Genoa and Venice, the only two remaining which can pretend to an has al-
independent existence, have both been enfeebled by it. Spain seems ways en-
to have learned the practice from the Italian republics, and (its gtatel^
taxes being probably less judicious than theirs) it has, in propor-
tion to its natural strength, been still more enfeebled. The debts of
Spain are of very old standing. It was deeply in debt before the end
of the sixteenth century, about a hundred years before England
owed a shilling. France, notwithstanding all its natural resources,
languishes under an oppressive load of the same kind. The republic
of the United Provinces is as much enfeebled by its debts as either
Genoa or Venice. Is it likely that in Great Britain alone a practice,
which has brought either weakness or desolation into every other
country, should prove altogether innocent?
The system of taxation established in those different countries, The su-
it may be said, is inferior to that of England. I believe it is so. But
it ought to be remembered, that when the wisest government has British
exhausted all the proper subjects of taxation, it must, in cases of system of
urgent necessity, have recourse to improper ones.^® The wise re-
public of Holland has upon some occasions been obliged to have re- enable
course to taxes as inconvenient as the greater part of those of Spain. Britain to
Another war begun before any considerable liberation of the public
revenue had been brought about, and growing in its progress as ex- limited
pensive as the last war, may, from irresistible necessity, render the burden.
British system of taxation as oppressive as that of Holland, or even
as that of Spain. To the honour of our present system of taxation,
indeed, it has hitherto given so little embarrassment to industry,
that, during the course even of the most expensive wars, the frug-
ality and good conduct of individuals seem to have been able, by
saving and accumulation, to repair all the breaches which the waste
and extravagance of government had made in the general capital of
the society. At the conclusion of the late war, the most expensive
that Great Britain ever waged, her agriculture was as flourishing,
her manufacturers as numerous and as fully employed, and her
commerce as extensive, as they had ever been before. The capital,
therefore, which supported all those different branches of industry,
must have been equal to what it had ever been before. Since the
peace, agriculture has been still further improved, the rents of
‘^Ed. I reads “most.” Above, p. 667.
®^Eds. I and 2 read “seems.’
882
THE WEALTH OF NATIONS
Bank-
ruptcy is
always
the end of
great ac-
cumula-
tion of
debt.
Raising
the coin
has been
the usual
method of
disguising
bank-
ruptcy
though
this ex-
pedient
has much
worse
conse-
quences
than open
bank-
ruptcy.
houses have risen in every town and village of the country, a proof
of the increasing wealth and revenue of the people; and the annual
amount of the greater part of the old taxes, of the principal
branches of the excise and customs in particular, has been continu-
ally increasing, an equally clear proojf of an increasing consump-
tion, and consequently of an increasing produce, which could alone
support that consumption. Great Britain seems to support with
ease, a burden which, half a century ago, nobody believed her cap-
able of supporting. Let us not, however, upon this account rashly
conclude that she is capable of supporting any burden; nor even be
too confident that she could support, without great distress, a bur-
den a little greater* than what has already been laid upon her.
When national debts have once been accumulated to a certain
degree, there is scarce, I believe, a single instance of their having
been fairly and completely paid. The liberation of the public rev-
enue, if it has ever been brought about at all, has always been
brought about by a bankruptcy; sometimes by an avowed one, but
always by a real one, though frequently by a pretended payment.®^
The raising of the denomination of the coin has been the most
usual expedient by which a real public bankruptcy has been dis-
guised under the appearance of a pretended payment. If a six-
pence, for example, should either by act of parliament or royal
proclamation be raised to the denomination of a shilling, and
twenty sixpences to that of a pound sterling; the person who under
the old denomination had borrowed twenty shillings, or near four
ounces of silver, would, under the new, pay with twenty sixpences,
or with something less than two ounces. A national debt of about a
hundred and twenty-eight millions, nearly the capital of the funded
and unfunded debt of Great Britain, might in this manner be paid
with about sixty-four millions of our present money. It would in-
deed be a pretended payment only, and the creditors of the public
would really be defrauded of ten shillings in the pound of what was
due to them. The calamity too would extend much further than to
the creditors of the public, and those of every private person would
suffer a proportionable loss; and this without any advantage, but
in most cases with a great additional loss, to the creditors of the
public. If the creditors of the public indeed were generally much
in debt to other people, they might in some measure compensate
their loss by paying their creditors in the same coin in which *the
“Raynal says “L’evidence autorise seulement a dire que les gouverne-
ments qui pour le malheur des peuples out adopte le detestable systeme des
emprunts doivent t6t ou tard Tabjurer: et que Pabus qu’ils en ont fait les
torcera vraisemblablement a etre infideles philosophigue, Am-
sterdam, 1773, tom. iv., p. 274.
PUBLIC DEBTS S83
public had paid them. But in most countries the creditors of the
public are, the greater part of them, wealthy people, who stand
more in the relation of creditors than in that of debtors towards
the rest of their fellow-citizens. A pretended payment of this kind,
therefore, instead of alleviating, aggravates in most cases the loss of
the creditors of the public; and without any advantage to the pub-
lic, extends the calamity to a great number of other innocent peo-
ple. It occasions a general and most pernicious subversion of the
fortunes of private people; enriching in most cases the idle and
profuse debtor at the expence of the industrious and frugal creditor,
and transporting a great part of the national capital from the
hands which were likely to increase and improve it, to those which
are likely to dissipate and destroy it. When it becomes necessary
for a state to declare itself bankrupt, in the same manner as when
it becomes necessary for an individual to do so, a fair, open, and
avowed bankruptcy is always the measure which is both least dis-
honourable to the debtor, and least hurtful to the creditor. The
honour of a state is surely very poorly provided for, when, in order
to cover the disgrace of a real bankruptcy, it has recourse to a jug-
gling trick of this kind, so easily seen through, and at the same
time so extremely pernicious.
Almost all states, however, ancient as well as modern, when re- It has
duced to this necessity, have, upon some occasions, played this very
juggling trick. The Romans, at the end of the first Punic war, re- many
duced the As, the coin or denomination by which they computed states, in-
the value of all their other coins, from containing twelve ounces of and^t
copper to contain only two ounces: that is, they raised two ounces Rome,
of copper to a denomination which had always before expressed the
value of twelve ounces. The republic was, in this manner, enabled
to pay the great debts which it had contracted with the sixth part
of what it really owed. So sudden and so great a bankruptcy, we
should in the present times be apt to imagine, must have occasioned
a very violent popular clamour. It does not appear to have occa-
sioned any. The law which enacted it was, like all other laws relat-
ing to the coin, introduced and carried through the assembly of the
people by a tribune, and was probably a very popular law. In
Rome, as in all the other ancient republics, the poor people were
constantly in debt to the rich and the great, who, in order to secure
their votes at the annual elections, used to lend them money at ex-
orbitant interest, which, being never paid, soon accumulated into a
sum too great either for the debtor to pay, or for any body else to
pay for him. The debtor, for fear of a very severe execution, was
obliged, without any further gratuity, to vote for the candidate
884
THE WEALTH OF NATIONS
and has
led to the
universal
reduction
of the
value of
the coin.
whom the creditor recommended. In spite of all the laws against
bribery and corruption, the bounty of the candidates, together with
the occasional distributions of corn, which were ordered by the sen-
ate, were the principal funds from which, during the latter times
of the Roman republic, the poorer citizens derived their subsistence.
To deliver themselves from this subjection to their creditors, the
poorer citizens were continually calling out either for an entire ab-
olition of debts, or for what they called New Tables; that is, for a
law which should entitle them to a complete acquittance, upon pay-
ing only a certain proportion of their accumulated debts. The law
which reduced the coin of all denominations to a sixth part of its
former value, as it enabled them to pay their debts with a sixth part
of what they really owed, was equivalent to the most advantageous
new tables. In order to satisfy the people, the rich and the great
were, upon several different occasions, obliged to consent to laws
both for abolishing debts, and for introducing new tables; and they
probably were induced to consent to this law, partly for the same
reason, and partly that, by liberating the public revenue, they
might restore vigour to that government of which they themselves
had the principal direction. An operation of this kind would at
once reduce a debt of a hundred and twenty-eight millions to
twenty-one millions three hundred and thirty-three thousand three
hundred and thirty-three pounds six shillings and eight-pence. In
the course of the second Punic war the As was still further reduced,
first, from two ounces of copper to one ounce; and afterwards from
one ounce to half an ounce; that is, to the twenty-fourth part of
its original value.®^ By combining the three Roman operations into
one, a debt of a hundred and twenty-eight millions of our present
money, might in this manner be reduced all at once to a debt of five
millions three hundred and thirty-three thousand three hundred
and thirty-three pounds six shillings and eight-pence. Even the
enormous debt of Great Britain might in this manner soon be paid.
By means of such expedients the coin of, I believe, all nations
has been gradually reduced more and more below its original value,
and the same nominal sum has been gradually brought to contain a
smaller and a smaller quantity of silver.
Nations have sometimes, for the same purpose, adulterated the
standard of their coin ; that is, have mixed a greater quantity of al-
loy in it. If in the pound weight of our silver coin, for example, in-
Eds. I and 2 read “later”; cp. above, p. 831.
This chapter of Roman history is based on a few sentences in Pliny,
H,N., lih. xxxiii., cap. iii. Modem criticism has discovered the facts to be
not nearly so simple as they are represented in the text.
PUBLIC DEBTS
885
stead of eighteen penny-weight, according to the present standard,
there was mixed eight ounces of alloy; a pound sterling, or twenty
shillings of such coin, would be worth little more than six shillings
and eight-pence of our present money. The quantity of silver con-
tained in six shillings and eight-pence of our present money, would
thus be raised very nearly to the denomination of a pound sterling.
The adulteration of the standard has exactly the same effect with
what the French call an augmentation, or a direct raising of the de-
nomination of the coin.
An augmentation, or a direct raising of the denomination of the
coin, always is, and from its nature must be, an open and avowed
operation. By means of it pieces of a smaller weight and bulk are
called by the same name which had before been given to pieces of a
greater weight and bulk. The adulteration of the standard, on the
contrary, has generally been a concealed operation. By means of it
pieces were issued from the mint of the same denominations, and,
as nearly as could be contrived, of the same weight, bulk, and ap-
pearance, with pieces which had been current before of much
greater value. When king John of France/^ in order to pay his
debts, adulterated his coin, all the officers of his mint were sworn
to secrecy. Both operations are unjust. But a simple augmentation
is an injustice of open violence; whereas an adulteration is an in-
justice of treacherous fraud. This latter operation, therefore, as
soon as it has been discovered, and it could never be concealed very
long, has always excited much greater indignation than the former.
The coin after any considerable augmentation has very seldom
been brought back to its former weight; but after the greatest
adulterations it has almost always been brought back to its former
fineness. It has scarce ever happened that the fury and indignation
of the people could otherwise be appeased.
In the end of the reign of Henry VIII. and in the beginning of
that of Edward VI. the English coin was not only raised in its de-
nomination, but adulterated in its standard. The like frauds were
practised in Scotland during the minority of James VI. They have
occasionally been practised in most other countries.
That the public revenue of Great Britain can ever be com-
pletely liberated, or even that any considerable progress can ever
Another
expedient
is to
adulterate
the coin,
but this is
a treach-
erous
fraud
which oc-
casions
such in-
dignation
that it
usually
fails.
It has
been tried
in Eng-
land,
Scotland
and most
other
countries.
®^See du Cange Glossary, voce Moneta; the Benedictine edition. This gives
a taWe of the alterations made in the coin and refers to Le Blanc, Trdti
historique des Monnoyes de France, 1792, in which the fact that the officers
were adjured by their oaths to keep the matter secret is mentioned on p.
218, but the adjuration is also quoted in the more accessible Melon, Essai
politique sur le Commerce, chap, xiii., ed. of 1761, p. 177.
® Misprinted “never” in eds. 2-5.
886
For the
paying
off or re-
duction
of the
British
debt a
very con-
siderable
increase*
of reve-
nue or
diminu-
tion of
expense is
necessary.
Altera-
tions in
taxation
might in-
crease the
revenue
consider-
ably but
not suf-
ficiently.
An ex-
tension of
taxation
to Ireland
and the
colonies
would
afford a
larger in-
crease.
THE WEALTH OF NATIONS
be made towards that liberation, while the surplus of that revenue,
or what is over and above defraying the annual expence of the
peace establishment, is so very small, it seems altogether in vain to
expect. That liberation, it is evident, can never be brought about
without either some very considerable augmentation of the public
revenue, or some equally considerable reduction of the public ex-
pence.
A more equal land tax, a more equal tax upon the rent of houses,
and such alterations in the present system of customs and excise as
those which have been mentioned in the foregoing chapter, might,
perhaps, without increasing the burden of the greater part of the
people, but only distributing the weight of it more equally upon the
whole, produce a considerable augmentation of revenue. The most
sanguine projector, however, could scarce flatter himself that any
augmentation of this kind would be such as could give any reason-
able hopes, either of liberating the public revenue altogether, or
even of making such progress towards that liberation in time of
peace, as either to prevent or to compensate the further accumula-
tion of the public debt in the next war.
By extending the British system of taxation to all the different
provinces of the empire inhabited by people of either British or
European extraction, a much greater augmentation of revenue
might be expected. This, however, could scarce, perhaps, be done,
consistently with the principles of the British constitution, with-
out admitting into the British parliament, or if you will into the
states-general of the British empire, a fair and equal representation
of all those different provinces, that of each province bearing the
same proportion to the produce of its taxes, as the representation of
Great Britain might bear to the produce of the taxes levied upon
Great Britain. The private interest of many powerful individuals,
the confirmed prejudices of great bodies of people seem, indeed, at
present, to oppose to so great a change such obstacles as it may be
very difficult, perhaps altogether impossible, to surmount. Without,
however, pretending to determine whether such a union be practi-
cable or impracticable, it may not, perhaps, be improper, in a spec-
ulative work of this kind, to consider how far the British system of
taxation might be applicable to all the different provinces of the
empire; what revenue might be expected from it if so applied, and
in what manner a general union of this kind might be likely to af-
fect the happiness and prosperity of the different provinces compre-
hended within it. Such a speculation can at worst be regarded but
^ Ed. I reads “neither of.”
PUBLIC DEBTS ^^7
as a new Utopia, less amusing certainly, but not more useless and
chimerical than the old one.
The land-tax, the stamp-duties, and the different duties of cus-
toms and excise, constitute the four principal branches of the Brit-
ish taxes.
Ireland is certainly as able, and our American and West Indian
plantations more able to pay a land-tax than Great Britain. Where
the landlord is subject neither to tithe nor poors rate, he must cer-
tainly be more able to pay such a tax, than where he is subject to
both those other burdens. The tithe, where there is no modus, and
where it is levied in kind, diminishes more what would otherwise be
the rent of the landlord, than a land-tax which really amounted to
five shillings in the pound. Such a tithe will be found in most cases
to amount to more than a fourth part of the real rent of the land,
or of what remains after replacing completely the capital of the
farmer, together with his reasonable profit. If all moduses and all
impropriations were taken away, the complete church tithe of
Great Britain and Ireland could not well be estimated at less than
six or seven millions. If there was no tithe either in Great Britain
or Ireland, the landlords could afford to pay six or seven millions
additional land-tax, without being more burdened than a very great
part of them are at present. America pays no tithe, and could
therefore very well afford to pay a land-tax. The lands in America
and the West Indies, indeed, are in general not tenanted nor
leased out to farmers. They could not therefore be assessed accord-
ing to any rent-roll. But neither were the lands of Great Britain,
in the 4th of William and Mary, assessed according to any rent-roll,
but according to a very loose and inaccurate estimation. The lands
in America might be assessed either in the same manner, or accord-
ing to an equitable valuation in consequence of an accurate survey,
like that which was lately made in tie Milanese, and in the do-
minions of Austria, Prussia, and Sardinia.®^
Stamp-duties, it is evident, might be levied without any variation
in all countries where the forms of law process, and the deeds by
which property both real and personal is transferred, are the same
or nearly the same.
The extension of the custom-house laws of Great Britain to Ire-
land and the plantations, provided it was accompanied, as in justice
it ought to be, with an extension of the freedom of trade, would be
in the highest degree advantageous to both. All the invidious re-
straints which at present oppress the trade of Ireland, the distinc-
Ed. I reads “or.” “Above, pp. 780, 786, 787.
The land-
tax could
well be
extended
to Ire-
land,
America
and the
West
Indies.
Stamp
duties
could
easily be
extended.
The ex-
tension
of the
customs
would be
of great
advan-
tage to
all, as it
would be
accom-
panied by
an exten-
sion of
free trade.
Excise
duties
would re-
quire
some
variation,
as for
example
in the
case of
American
beer.
888 the wealth OF NATIONS
tion between the enumerated and non-enumerated commodities of
America, would be entirely at an end.^® The countries north of
Cape Finisterre would be as open to every part of the produce of
America, as those south of that Cape are to some parts of that pro-
duce at present. The trade between all the different parts of the
British empire would, in consequence of this uniformity in the cus-
tom-house laws, be as free as the coasting trade of Great Britain is
at present. The British empire would thus afford within itself an
immense internal market for every part of the produce of all its dif-
ferent provinces. So great an extension of market would soon com-
pensate both to Ireland and the plantations, all that they could suf-
fer from the increase of the duties of customs.
The excise is the only part of the British system of taxation,
which would require to be varied in any respect according as it was
applied to the different provinces of the empire. It might be ap-
plied to Ireland without any variation; the produce and consump-
tion of that kingdom being exactly of the same nature with those
of Great Britain. In its application to America and the West In-
dies, of which the produce and consumption are so very different
from those of Great Britain, some modification might be necessary,
in the same manner as in its application to the cyder and beer coun-
ties of England.
A fermented liquor, for example, which is called beer, but which,
as it is made of melasses, bears very little resemblance to our beer,
makes a considerable part of the common drink of the people in
America. This liquor, as it can be kept only for a few days, cannot,
like our beer, be prepared and stored up for sale in great breweries ;
but every private family must brew it for their own use, in the same
manner as they cook their victuals. But to subject every private
family to the odious visits and examination of the tax-gatherers, in
the same manner as we subject the keepers of alehouses and the
brewers for public sale, would be altogether inconsistent with lib-
erty. If for the sake of equality it was thought necessary to lay a
tax upon this liquor, it might be taxed by taxing the material of
which it is made, either at the place of manufacture, or, if the cir-
cumstances of the trade rendered such an excise improper, by lay-
ing a duty upon its importation into the colony in which it was to
be consumed. Besides the duty of one penny a gallon imposed by
the British parliament upon the importation of melasses into Amer-
ica; there is a provincial tax of this kind upon their importation in-
to Massachusets Bay, in ships belonging to any other colony, of
eight-pence the hogshead; and another upon their importation,
Above, pp. 543, 544.
PUBLIC DEBTS
889
from the northern colonies, into South Carolina, of five-pence the
gallon. Or if neither of these methods was found convenient, each
family might compound for its consumption of this liquor, either
according to the number of persons of which it consisted, in the
same manner as private families compound for the malt-tax in Eng-
land; or according to the different ages and sexes of those persons,
in the same manner as several different taxes are levied in Holland;
or nearly as Sir Matthew Decker proposes that all taxes upon con-
sumable commodities should be levied in England,®^ This mode of
taxation, it has already been observed, when applied to objects of
a speedy consumption, is not a very convenient one. It might be
adopted, however, in cases where no better could be done.
Sugar, rum, and tobacco, are commodities which are no where
necessaries of life, which are become objects of almost universal
consumption, and which are therefore extremely proper subjects of
taxation. If a union with the colonies were to take place, those
commodities might be taxed either before they go out of the hands
of the manufacturer or grower; or if this mode of taxation did not
suit the circumstances of those persons, they might be deposited in
public warehouses both at the place of manufacture, and at all the
different ports of the empire to which they might afterwards be
transported, to remain there, under the joint custody of the owner
and the revenue officer, till such time as they should be delivered
out either to the consumer, to the merchant retailer for home-con-
sumption, or to the merchant exporter, the tax not to be advanced
till such delivery. When delivered out for exportation, to go duty
free; upon proper security being given that they should really be
exported out of the empire. These are perhaps the principal com-
modities with regard to which a union with the colonies might re-
quire some considerable change in the present system of British
taxation.
What might be the amount of the revenue which this system of
taxation extended to all the different provinces of the empire might
produce, it must, no doubt, be altogether impossible to ascertain
with tolerable exactness. By means of this system there is annually
levied in Great Britain, upon less than eight millions of people,
more than ten millions of revenue. Ireland contains more than two
millions of people, and according to the accounts laid before the
congress,^'® the twelve associated provinces of America contain
more than three. Those accounts, however, may have been exag-
Above, p. 828. ®Eds. 1-3 read “was.”
Given in the Continuation of Anderson’s Commerce, a.d. 1774, vol. iv.,
p, 178, in ed. of 1801.
Sugar,
rum and
tobacco
could be
made sub-
ject to
excise.
The in-
crease of
revenue
thus ob-
tained, if
propor-
tionate to
the in-
creased
popula-
tion
taxed,
would
yield six
millions
and a
quarter to
be ap-
plied in
reduction
of debt,
and this
sum
would of
course be
agrow-
ing one.
890 XHE WEALTH OF NATIONS
gerated, in order, perhaps, either to encourage their own people, or
to intimidate those of this country, and we shall suppose therefore
that our North American and West Indian colonies taken together
contain no more than three millions; or that the whole British em-
pire, in Europe and America, contains no more than thirteen mil-
lions of inhabitants. If upon less than eight millions of inhabitants
this system of taxation raises a revenue of more than ten millions
sterling; it ought upon thirteen millions of inhabitants to raise a
revenue of more than sixteen millions two hundred and fifty thou-
sand pounds sterling. From this revenue, supposing that this sys-
tem could produce it, must be deducted, the revenue usually raised
in Ireland and the plantations for defraying the expence of their
respective civil governments. The expence of the civil and military
establishment of Ireland, together with the interest of the public
debt, amounts, at a medium of the two years which ended March
1775, to something less than seven hundred and fifty thousand
pounds a year. By a very exact account’’'^ of the revenue of the
principal colonies of America and the West Indies, it amounted, be-
fore the commencement of the present disturbances, to a hundred
and forty-one thousand eight hundred pounds. In this account,
however, the revenue of Maryland, of North Carolina, and of all
our late acquisitions both upon the continent and in the islands, is
omitted, which may perhaps make a difference of thirty or forty
thousand pounds. For the sake of even numbers therefore, let us
suppose that the revenue necessary for supporting the civil govern-
ment of Ireland and the plantations, may amount to a million.
There would remain consequently a revenue of fifteen millions two
hundred and fifty thousand pounds, to be applied towards defray-
ing the general expence of the empire, and towards pa3dng the pub-
lic debt. But if from the present revenue of Great Britain a million
could in peaceable times be spared towards the payment of that
debt, six millions two hundred and fifty thousand pounds could
very well be spared from this improved revenue. This great sinking
fund too might be augmented every year by the interest of the
debt which had been discharged the year before, and might in this
manner increase so very rapidly, as to be sufficient in a few years
to discharge the whole debt, and thus to restore completely the at
present debilitated and languishing vigour of the empire. In the
mean time the people might be relieved from some of the most
burdensome taxes; from those which are imposed either upon the
necessaries of life, or upon the materials of manufacture. The la-
bouring poor would thus be enabled to live better, to work cheaper,
Above, p. 540. ^ Ed. i reads “late”; cp. above, p. 465.
PUBLIC DEBTS ^9i
and to send their goods cheaper to market. The cheapness of their
goods would increase the demand for them, and consequently for
the labour of those who produced them. This increase in the de-
mand for labour, would both increase the numbers and improve the
circumstances of the labouring poor. Their consumption would in-
crease, and together with it the revenue arising from all those arti-
cles of their consumption upon which the taxes might be allowed
to remain.
The revenue arising from this system of taxation, however, might Some
not immediately increase in proportion to the number of people who
were subjected to it. Great indulgence would for some time be due tions
to those provinces of the empire which were thus subjected to bur- froin this
thens to which they had not before been accustomed, and even when be
the same taxes came to be levied every where as exactly as possible, counter-
they would not every where produce a revenue proportioned to the
numbers of the people. In a poor country the consumption of the tio4 re-
principal commodities subject to the duties of customs and excise is suiting
very small; and in a thinly inhabited country the opportunities of
smuggling are very great. The consumption of malt liquors among simple al-
the inferior ranks of people in Scotland is very small, and the excise terations.
upon malt, beer, and ale, produces less there than in England in
proportion to the numbers of the people and the rate of the duties,
which upon malt is different on account of a supposed difference
of quality. In these particular branches of the excise, there is not, I
apprehend, much more smuggling in the one country than in the
other. The duties upon the distillery, and the greater part of the
duties of customs, in proportion to the numbers of people in the
respective countries, produce less in Scotland than in England, not
only on account of the smaller consumption of the taxed commodi-
ties, but of the much greater facility of smuggling. In Ireland, the
inferior ranks of people are still poorer than in Scotland, and many
parts of the country are almost as thinly inhabited. In Ireland,
therefore, the consumption of the taxed commodities might, in pro-
portion to the number of the people, be still less than in Scotland,
and the facility of smuggling nearly the same. In America and the
West Indies the white people even of the lowest rank are in much
better circumstances than those of the same rank in England, and
their consumption of all the luxuries in which they usually indulge
themselves is probably much greater. The blacks, indeed, who make
the greater part of the inhabitants both of the southern colonies up-
on the continent and of the West India islands, as they are in a
state of slavery, are, no doubt, in a worse condition than the poor-
”Eds. r and 2 read “West Indian.’
The
Ameri-
cans have
little gold
and silver,
but this is
the effect
of choice,
not neces-
sity.
S92 THE WEALTH OE NATIONS
est people either in Scotland or Ireland. We must not, however, up-
on the account, imagine that they are worse fed, or that their con-
sumption of articles which might be subjected to moderate duties,
is less than that even of the lower ranks of people in England. In
order that they may work well, it is the interest of their master that
they should be fed well and kept in good heart, in the same manner
as it is his interest that his working cattle should be so. The blacks
accordingly have almost every where their allowance of rum and
of melasses or spruce beer, in the same manner as the white ser-
vants; and this allowance would not probably be withdrawn,
though those articles should be subjected to moderate duties. The
consumption of the taxed commodities, therefore, in proportion to
the number of inhabitants, would probably be as great in America
and the West Indies as in any part of the British empire. The op-
portunities of smuggling indeed, would be much greater; America,
in proportion to the extent of the country, being much more thinly
inhabited than either Scotland or Ireland. If the revenue, however,
which is at present raised by the different duties upon malt and
malt liquors, were*^^ to be levied by a single duty upon malt, the
opportunity of smuggling in the most important branch of the ex-
cise would be almost entirely taken away: And if the duties of cus-
toms, instead of being imposed upon almost all the different articles
of importation, were confined to a few of the most general use and
consumption, and if the levying of those duties were subjected to
the excise laws, the opportunity of smuggling, though not so en-
tirely taken away, would be very much diminished. In consequence
of those two, apparently, very simple and easy alterations, the du-
ties of customs and excise might probably produce a revenue as
great in proportion to the consumption of the most thinly inhabited
province, as they do at present in proportion to that of the most
populous.
The Americans, it has been siid, indeed, have no gold or silver
money; the interior commerce of the country being carried on by
a paper currency, and the gold and silver which occasionally come
among them being all sent to Great Britain in return for the com-
modities which they receive from us. But without gold and silver,
it is added, there is no possibility of paying taxes. We already get
all the gold and silver which they have. How is it possible to draw
from them what they have not?
The present scarcity of gold and silver money in America is not
the effect of the poverty of that country, or of the inability of the
people there to purchase those metals. In a country where the
’®Eds. 1-3 read ‘Vas” here and five lines below.
PUBLIC DEBTS
893
wages of labour are so much higher, and the price of provisions so
much lower than in England, the greater part of the people must
surely have wherewithal to purchase a greater quantity, if it were
either necessary or convenient for them to do so. The scarcity of
those metals therefore, must be the effect of choice, and not of
necessity.
It is for transacting either domestic or foreign business, that gold
and silver money is either necessary or convenient.
The domestic business of every country, it has been shewn in the
second book of this Inquiry,'^" may, at least in peaceable times, be
transacted by means of a paper currency, with nearly the same de-
gree of conveniency as by gold and silver money. It is convenient
for the Americans, who could always employ with profit in the
improvement of their lands a greater stock than they can easily get,
to save as much as possible the expence of so costly an instrument
of commerce as gold and silver, and rather to employ that part of
their surplus produce which would be necessary for purchasing
those metals, in purchasing the instruments of trade, the materials
of clothing, several parts of household furniture, and the iron-work
necessary for building and extending their settlements and planta-
tions; in purchasing, not dead stock, but active and productive
stock. The colony governments find it for their interest to supply
the people with such a quantity of paper-money as is fully suffi-
cient and generally more than sufficient for transacting their do-
mestic business. Some of those governments, that of Pennsylvania
particularly, derive a revenue from lending this paper-money to
their subjects at an interest of so much per cent. Others, like that
of Massachusett’s Bay, advance upon extraordinary emergencies a
paper-money of this kind for defraying the public expence, and
afterv/ards, when it suits the conveniency of the colony, redeem it
at the depreciated value to which it gradually falls. In 1747 that
colony paid, in this manner, the greater part of its public debts,
with the tenth part of the money for which its bills had been grant-
ed. It suits the conveniency of the planters to save the expence of
employing gold and silver money in their domestic transaction; and
it suits the conveniency of the colony governments to supply them
with a medium, which, though attended with some very consider-
able disadvantages, enables them to save that expence. The re-
dundancy of paper-money necessarily banishes gold and silver from
^*Eds. 1-3 read “was” Above, pp. 276-281.
™ Ed. I omits “the.”
See Hutchinson’s Hist, of Massachusett’s Bay, Vol. II., page 436 & seq.
History of the Colony of Massachusetts Bay^ 2nd ed., 1765-8.
Paper 3S
more con-
venient to
the Amer-
icans for
home
trade,
while for
their ex-
ternal
trade they
use as
much
gold and
silver as
is neces-
sary.
In the
trade be-
tween
Great
Britain
and Vir-
ginia and
Maryland
tobacco is
a more
conveni-
ent cur-
rency
than gold
and silver.
The
northern
colonies
generally
find the
S94 THE WEALTH OF NATIONS
the domestic transactions of the colonies, for the same reason that
it has banished those metals from the greater part of the domestic
transactions in Scotland; and in both countries it is not the pov-
erty, but the enterprizing and projecting spirit of the people, their
desire of employing all the stock which they can get as active and
productive stock, which has occasioned this redundancy of paper-
money.
In the exterior commerce which the different colonies carry on
with Great Britain, gold and silver are more or less employed, ex-
actly in proportion as they are more or less necessary. Where those
metals are not necessary, they seldom appear. Where they are nec-
essary, they are generally found.
In the commerce between Great Britain and the tobacco colonies,
the British goods are generally advanced to the colonists at a pretty
long credit, and are afterwards paid for in tobacco, rated at a cer-
tain price. It is more convenient for the colonists to pay in tobacco
than in gold and silver. It would be more convenient for any mer-
chant to pay for the goods which his correspondents had sold to
him in some other sort of goods which he might happen to deal in,
than in money. Such a merchant would have no occasion to keep
any part of his stock by him unemployed, and in ready money, for
answering occasional demands. He could have, at all times, a larger
quantity of goods in his shop or warehouse, and he could deal to a
greater extent. But it seldom happens to be convenient for all the
correspondents of a merchant to receive payment for the goods
which they sell to him, in goods of some otier kind which he hap-
pens to deal in. The British merchants who trade to Virginia and
Maryland happen to be a particular set of correspondents, to whom
it is more convenient to receive payment for the goods which they
sell to those colonies in tobacco than in gold and silver. They ex-
pect to make a profit by the sale of the tobacco. They could make
none by that of the gold and silver. Gold and silver, therefore, very
seldom appear in the commerce between Great Britain and the
tobacco colonies. Maryland and Virginia have as little occasion for
those metals in their foreign as in their domestic commerce. They
are said, accordingly, to have less gold and silver money than any
other colonies in America. They are reckoned, however, as thriv-
ing, and consequently as rich, as any of their neighbours.
In the northern colonies, Pennsylvania, New York, New Jersey,
the four governments of New England, &c. the value of their own
produce which they export to Great Britain is not equal to that
of the manufactures which they import for their own use, and for
™Ed. I reads “of.”
PUBLIC DEBTS
895
that of some of the other colonies to which they are the carriers.
A balance, therefore, must be paid to the mother country in gold
and silver, and this balance they generally find.
In the sugar colonies the value of the produce annually exported
to Great Britain is much greater than that of all the goods imported
from thence. If the sugar and rum annually sent to the mother
country were paid for in those colonies. Great Britain would be
obliged to send out every year a very large balance in money, and
the trade to the West Indies would, by a certain species of politi-
cians, be considered as extremely disadvantageous. But it so hap-
pens, that many of the principal proprietors of the sugar planta-
tions reside in Great Britain. Their rents are remitted to them in
sugar and rum, the produce of their estates. The sugar and rum
which the West India merchants purchase in those colonies upon
their own account, are not equal in value to the goods which they
annually sell there. A balance therefore must necessarily be paid
to them in gold and silver, and this balance too is generally found.
The difficulty and irregularity of payment from the different col-
onies to Great Britain, have not been at all in proportion to the
greatness or smallness of the balances which were respectively due
from them. Payments have in general been more regular from the
northern than from the tobacco colonies, though the former have
generally paid a pretty large balance in money, while the latter
have either paid no balance, or a much smaller one. The difficulty
of getting payment from our different sugar colonies has been
greater or less in proportion, not so much to the extent of the bal-
ances respectively due from them, as to the quantity of uncultivated
land which they contained; that is, to the greater or smaller temp-
tation which the planters have been under of over-trading, or of
undertaking the settlement and plantation of greater quantities of
waste land than suited the extent of their capitals. The returns from
the great island of Jamaica, where there is still much uncultivated
land, have, upon this account, been in general more irregular and
uncertain, than those from the smaller islands of Barbadoes, An-
tigua, and St. Christophers, which have for these many years been
completely cultivated, and have, upon that account, afforded less
field for the speculations of the planter. The new acquisitions of
Grenada, Tobago, St. Vincents, and Dominica, have opened a
new field for speculations of this kind; and the returns from those
islands have of late been as irregular and uncertain as those from
the great island of Jamaica.
I reads “must generally.” ^’Ed. i reads “paid either.”
Above, p. 54S, note 43.
gold and
silver ne-
cessary to
pay the
balance
on theii
trade
with
Great
Britain
The sugar
colonies
generally
find the
gold and
silver ne-
cessary to
pay the
balance
to Great
Britain
which
arises
from the
sugar
planters
being ab-
sentees.
Any dif-
ficulties
have not
been pro-
portion-
ate to the
size of the
balance
due,
and have
arisen
from un-
necessary
and ex-
cessive
enter-
prise.
It is
justice
That Ire-
land and
America
should
896 THE WEALTH OF NATIONS
It is not, therefore, the poverty of the colonies which occasions,
in the greater part of them, the present scarcity of gold and silver
money. Their great demand for active and productive stock makes
it convenient for them to have as little dead stock as possible; and
disposes them upon that account to content themselves with a
cheaper, though less commodious instrument of commerce than
gold and silver. They are thereby enabled to convert the value of
that gold and silver into the instruments of trade, into the mate-
rials of clothing, into household furniture, and into the iron work
necessary for building and. extending their settlements and planta-
tions. In those branches of business which cannot be transacted
without gold and silver money, it appears, that they can always
find the necessary quantity of those metals; and if they frequently
do not find it, their failure is generally the effect, not of their neces-
sary poverty, but of their unnecessary and excessive enterprize. It
is not because they are poor that their payments are irregular and
uncertain; but because they are too eager to become excessively
rich. Though all that part of the produce of the colony taxes, which
was over and above what was necessary for defraying the expence
of their own civil and military establishments, were to be remitted
to Great Britain in gold and silver, the colonies have abundantly
wherewithal to purchase the requisite quantity of those metals.
They would in this case be obliged, indeed, to exchange a part of
their surplus produce, with which they now purchase active and
productive stock, for dead stock. In transacting their domestic busi-
ness they would be obliged to employ a costly instead of a cheap
instrument of commerce; and the expence of purchasing this costly
instrument might damp somewhat the vivacity and ardour of their
excessive enterprize in the improvement of land. It might not, how-
ever, be necessary to remit any part of the American revenue in
gold and silver. It might be remitted in bills drawn upon and ac-
cepted by particular merchants or companies in Great Britain, to
whom a part of the surplus produce of America had been consigned,
who would pay into the treasury the AmerLan revenue in money,
after having themselves received the value of it in goods; and the
whole business might frequently be transacted without exporting a
single ounce of gold or silver from America.
It is not contrary to justice that both Ireland and America should
contribute towards the discharge of the public debt of Great Brit-
ain. That debt has been contracted in support of the government
established by the Revolution, a government to which the protes-
tants of Ireland owe, not only the whole authority which they at
Ed. I reads “gold and silver.”
PUBLIC DEBTS ^97
present enjoy in their own country, but every security which they
possess for their liberty, their property, and their religion; a gov-
ernment to which several of the colonies of America owe their pres-
ent charters, and consequently their present constitution, and to
which all the colonies of America owe the liberty, security, and
property which they have ever since enjoyed. That public debt has
been contracted in the defence, not of Great Britain alone, but of
all the different provinces of the empire; the immense debt con-
tracted in the late war in particular, and a great part of that con-
tracted in the war before, were both properly contracted in defence
of America.
By a union with Great Britain, Ireland would gain, besides the
freedom of trade, other advantages much more important, and
which would much more than compensate any increase of
taxes that might accompany that union. By the union with Eng-
land, the middling and inferior ranks of people in Scotland gained
a complete deliverance from the power of an aristocracy which had
always before oppressed them. By an union with Great Britain, the
greater part of the people of all ranks in Ireland would gain an
equally complete deliverance from a much more oppressive aris-
tocracy; an aristocracy not founded, like that of Scotland, in the
natural and respectable distinctions of birth and fortune; but in the
most odious of all distinctions, those of religious and political prej-
udices; distinctions which, more than any other, animate both the
insolence of the oppressors and the hatred and indignation of the
oppressed, and which commonly render the inhabitants of the same
country more hostile to one another than those of different coun-
tries ever are. Without a union with Great Britain, the inhabitants
of Ireland are not likely for many ages to consider themselves as
one people.
No oppressive aristocracy has ever prevailed in the colonies.
Even they, however, would, in point of happiness and tranquillity,
gain considerably by a union with Great Britain. It would, at least,
deliver them from those rancorous and virulent factions which are
inseparable from small democracies, and which have so frequently
divided the affections of their people, and disturbed the tranquillity
of their governments, in their form so nearly democratical. In the
case of a total separation from Great Britain, which, unless pre-
vented by a union of this kind, seems very likely to take place,
those factions would be ten times more virulent than ever. Before
the commencement of the present disturbances, the coercive power
of the mother-country had always been able to restrain those fac-
tions from breaking out into any thing worse than gross brutality
contri-
bute to
the dis-
charge of
the Brit-
ish debt.
Union
would
deliver
Ireland
from an
oppres-
sive aris-
tocracy
founded
on reli-
gious and
political
preju-
dices.
The colo-
nies
would be
delivered
from
rancoroib
factions
which are
likely to
lead to
bloodshed
in case of
separa-
tion from
Great
Britain.
East
India
with
fighter
taxes and
iess cor-
rupt ad-
ministra-
tion
might
yield an
wen
larger ad-
dition of
revenue.
If no such
aug-
mentation
of reve-
nue can
be ob-
tained
Great
Britain
should re-
89S the wealth of nations
and insult. If that coercive power were entirely taken away, they
would probably soon break out into open violence and bloodshed.
In all great countries which are united under one uniform govern-
ment, the spirit of party commonly prevails less in the remote pro-
vinces than in the centre of the empire. The distance of those pro-
vinces from the capital, from the principal seat of the great scram-
ble of faction and ambition, makes them enter less into the views
of any of the contending parties, and renders them more indifferent
and impartial spectators of the conduct of all. The spirit of party
prevails less in Scotland than in England. In the case of a union it
would probably prevail less in Ireland than in Scotland, and the
colonies would probably soon enjoy a degree of concord and una-
nimity at present unknown in any part of the British empire. Both
Ireland and the colonies, indeed, would be subjected to heavier
taxes than any which they at present pay. In consequence, how-
ever, of a diligent and faithful application of the public revenue
towards the discharge of the national debt, the greater part of those
taxes might not be of long continuance, and the public revenue of
Great Britain might soon be reduced to what was necessary for
maintaining a moderate peace establishment.
The territorial acquisitions of the East India company, the un-
doubted right of the crown, that is, of the state and people of Great
Britain, might be rendered another source of revenue more abun-
dant, perhaps, than all those already mentioned. Those countries
are represented as more fertile, more extensive; and, in proportion
to their extent, much richer and more populous than Great Britain.
In order to draw a great revenue from them, it would not probably
be necessary, to introduce any new system of taxation into coun-
tries which are already sufficiently and more than sufficiently taxed.
It might, perhaps, be more proper to lighten, than to aggravate, the
burden of those unfortunate countries, and to endeavour to draw a
revenue from them, not by imposing new taxes, but by preventing
the embezzlement and misapplication of the greater part of those
which they already pay.
If it should be found impracticable for Great Britain to draw any
considerable augmentation of revenue from any of the resources
above mentioned; the only resource which can remain to her is a
diminution of her expence. In the mode of collecting, and in that
of expending the public revenue; though in both there may be still
room for improvement; Great Britain seems to be at least as ceco-
nomical as any of her neighbours. The military establishment which
she maintains for her own defence in time of peace, is more moder-
®®Eds. 1-5 read “was.”
PUBLIC DEBTS ^99
ate than that of any European state which can pretend to rival her
either in wealth or in power. None of those articles, therefore, seem
to admit of any considerable reduction of expence. The expence of
the peace establishment of the colonies was, before the commence-
ment of the present disturbances, very considerable, and is an ex-
pence which may, and if no revenue can be drawn from them, ought
certainly to be saved altogether. This constant expence in time of
peace, though very great, is insignificant in comparison with what
the defence of the colonies has cost us in time of war. The last war,
which was undertaken altogether on account of the colonies, cost
Great Britain, it has already been observed, upwards of ninety mil-
lions.®^ The Spanish war of 1739 was principally undertaken on
their account; in which, and in ihe French war that was the conse-
quence of it. Great Britain spent upwards of forty millions, a great
part of which ought justly to be charged to the colonies. In those
two wars the colonies cost Great Britain much more than double
the sum which the national debt amounted to before the commence-
ment of the first of them. Had it not been for those wars that debt
might, and probably would by this time, have been completely
paid; and had it not been for the colonies, the former of those wars
might not, and the latter certainly would not have been under-
taken. It was because the colonies were supposed to be provinces of
the British empire, that this expence was laid out upon them. But
countries which contribute neither revenue nor military force to-
wards the support of the empire, cannot be considered as provinces.
They may perhaps be considered as appendages, as a sort of splen-
did and showy equipage of the empire. But if the empire can no
longer support the expence of keeping up this equipage, it ought
certainly to lay it down; and if it cannot raise its revenue in pro-
portion to its expence, it ought, at least, to accommodate its ex-
pence to its revenue. If the colonies, notwithstanding their refusal
to submit to British taxes, are still to be considered as provinces of
the British empire, their defence in some future war may cost
Great Britain as great an expence as it ever has done in any former
war. The rulers of Great Britain have, for more than a century
past, amused the people with the imagination that they possessed a
great empire on the west side of the Atlantic. This empire, how-
ever, has hitherto existed in imagination only. It has hitherto been,
not an empire, but the project of an empire; not a gold mine, but
the project of a gold mine; a project which has cost, which con-
tinues to cost, and which, if pursued in the same way as it has been
hitherto, is likely to cost, immense expence, without being likely to
^ Above, p. 410.
duce her
expenses
by rid-
ding her-
self of the
cost of
the colo-
nies in
peace and
war.
900 XHE WEALTH OF NATIONS
bring any profit; for the effects of the monopoly of the colony
trade, it has been shewn,®® are, to the great body of the people,
mere loss instead of profit. It is surely now time that our rulers
should either realize this golden dream, in which they have been
indulging themselves, perhaps, as well as the people; or, that they
should awake from it themselves, and endeavour to awaken the
people. If the project cannot be completed, it ought to be given up.
If any of the provinces of the British empire cannot be made to
contribute towards the support of the whole empire, it is surely
time that Great Britain should free herself from the expence of de-
fending those provinces in time of war, and of supporting any part
of their civil or military establishments in time of peace, and en-
deavour to accommodate her future views and designs to the real
mediocrity of her circumstances.
“Above, pp. SS7-S96.
APPENDIX^
The two following Accounts are subjoined in order to illustrate
and confirm what is said in the Fifth Chapter of the Fourth Book,^
concerning the Tonnage bounty to the White Herring Fishery. The
Reader, I believe, may depend upon the accuracy of both Ac-
counts.
An Account of Busses fitted out in Scotland for Eleven Years ^ with the Number of
Empty Barrels carried out, and the Number of Barrels of Herrings co/ught;
also the Bounty at a Medium on each Barrel of Seasteeks, and on each Barrel
when fully packed.
Years.
Number of
Busses.
Empty
Barrels
carried out.
Barrels of
Herrings
caught.
Bounty paid on
the Busses.
£.
d.
1771
29
S948
2832
2085
0
0
1772
168
41316
22237
11033
7
6
1773
190
42333
4203s
12510
8
6
1774
248
S9303
56363
16952
2
6
177s
275
69144
32879
193 13
IS
0
1776
294
76329
31863
21290
7
6
1777
240
62679
43313
17392
2
6
1778
220
36390
40938
16316
2
6
1779
206
SS194
29367
13287
0
0
1780
181
48313
19883
1 3443
12
6
1781
135
33992
16393
9613
12
6
Total,
2186
SS0943
378347
155463
II
0
Seasteeks 37S347 Bounty at a medium for each barrel of sea-
steeks, £. o 8 aj
But a barrel of seasteeks being only reckoned two-
thirds of a barrel fully packed, one-third is deducted,
I deducted 126115! which brings the bounty to £. o 12 3-!
Barrels full \
packed, / ^52231-4-
^ See above, p. 486.
“ In Additions and Corrections this matter is printed in the text, and con-
sequently the reading here is “confirm what is said above.”
901
902
THE WEALTH OF NATIONS
Brought over — ^£. o 12 3$
And if the herrings are exported, there is besides a pre-
mium of o 2 8
So that the bounty paid by Government in money for each
barrel, is ^ o 14 nf
But if to this, the duty of the salt usually taken credit for
as expended in curing each barrel, which at a medium is of
foreign, one bushel and one-fourth of a bushel, at 10 s. a
bushel, be added, viz o 12 6
The bounty on each barrel would amount to £. i 7 5I
If the herrings are cured with British salt, it will stand thus, viz.
Bounty as before £, o 14 ii-J
— ^but if to this bounty the duty on two bushels of Scots salt
at I 5. 6 d. per bushel, supposed to be the quantity at a
medium used in curing each barrel is added, to wit, o 3 o
The bounty on each barrel will amount to £. o 17 iij
And,
When buss herrings are entered for home consumption in Scotland, and
pay the shilling a barrel of duty, the bounty stands thus, to wit as be-
fore £. 0 12 3f
From which the i a barrel is to be deducted 0 i 0
0 II 3-i
But to that there is to be added again, the duty of the
foreign salt used in curing a barrel of herrings, viz 0 12 6
So that the premium allowed for each barrel of herrings
entered for home consumption is £.1 3 gf
If the herrings are cured with British salt, it will stand as follows, viz.
Bounty on each barrel brought in by the busses as above. £. 0 12 3I
From which deduct the i a barrel paid at the time they
are entered for home consumption 0 i o
But if to the bounty the duty on two bushels of Scots salt
at I S. 6d. per bushel, supposed to be the quantity at a
medium used in curing each barrel, is added, to wit, o 3 0
^ The premium for each barrel entered for home consump-
tion will be £. o 14 3f
Though the loss of duties upon herrings exported cannot, per-
haps, properly be considered as bounty; that upon herrings en-
tered for home consumption certainly may.
APPENDIX
903
An Account of the Quantity of Foreign Salt imported into Scotland, and of Scots
Salt delivered Duty free from the Works therefor the Fishery, from the $th of
April 1771 to the ^th of April 1782, with a Medium of both for one Year.
PERIOD.
Foreign Salt
imported.
Scots Salt de-
livered from
the Works.
Bushels.
Bushels.
From the 5th of April 1771, to the 1
5th of April 1782. j
Medium for one Year
936974
168226
8 si 79 tV
15293*
It is to be observed that the Bushel of Foreign Salt weighs 84 lb.
that of British Salt 56 lb. only.
INDEX
m
INDEX I
SUBJECTS
[This index is the original index, uhich appeared first in edition 3, with {in square
brackets) additions by the present editor It covers only the text and the author's
notes. For books quoted in the editor's notes, readers should consult Index II.]
[Abassides, opulence of Saracen empire under, 380.]
[Abbeville, woollen monopoly, 428.]
[Abraham, weighed shekels, 25.]
Absentee tax, the propriety of, considered, with reference to Ireland, 846.
[Abyssinia, salt money, 23.]
[Academy, the, assigned to Plato, 731.]
[Academy of Sciences, Description des Arts et MHiers Jaites ou approuvies par
Messieurs de Vacad^mie royale des sciences, 1761, 126.]
[Acapulco ships, sailing between America and East Indies, 204, 207, 209.]
Accounts of money, in modern Europe, all kept, and the value of goods com-
puted, in silver, 39.
[Accumulation, early state preceding, 47, 64; title of Bk ii., 259; previous and
'necessary to division of labour, 260.)
[Achilles, Agamemnon’s offer to, 676.]
Actors, public, paid for the contempt attending their profession, 107.
Adriatic, favourable to commerce, 21 J
Adulteration of coin, worse than augmentation, 885.]
Adulterine ^ilds, 124.]
iEgean sea, islands of, 523.]
.-Eolian colonies, 523.]
yEsop’s Fables, apologues, 724.]
Africa, [powerful king much worse off than European peasant, 12,] cause
assigned for the barbarous state of the interior parts of that continent,
20, 21.
[Trade to America consists of slave trade, 537; receives rum in exchange
for slaves, 545; manufactures from European towns, 591; no thriving colo-
nics, 599; natives being shepherds could not be displaced, ibr, gum senega
export, 622; necessity of forts for commerce, 690; music and dancing,
729-30.]
African company [one of five regulated companies, 692;] establishment and con-
stitution of, 696-8; receive an annual allowance from r)arliament for forts
and garrisons, 697-8; the company not under sufficient controul, 698;
history of the Royal African company, 700-1; decline of, ib.; rise of the
present company, 701.
[Agamemnon’s recommendation of his cities, 676.]
Age, the foundation of rank and precedency in rude as well as civilized societies,
671.
[Agen, land tax in, 805.]
Aggregate fund, in the British finances, explained, 867.
Agio of the bank of Amsterdam [how accounted for by some people, 312;] ex-
plained, 445; of the bank of Hamburgh, 447; the agio at Amsterdam, how
kept at a medium rate, 453.
907
9o8 index
#
[Agrarian law, the foundation of Rome, 524.]
[Agricultural Systems, 627-51.]
Agriculture, the labour of, does not admit of such subdivisions as manufactures,
6; this impossibility of separation, prevents agriculture from improving
equally with manufactures, 6; natural state of, in a new colony, 92; requires
more knowledge and experience than most mechanical professions, and yet
is carried on without any restrictions, 127; the terms of rent, how adjusted
between landlord and tenant, 144; is extended by good roads and navigable
canals, 147; under what circumstances pasture land is more valuable than
arable, 149; gardening not a very gainful employment, 152-3; vines the most
profitable article of culture, 154; estimates of profit from projects, very fal-
lacious, [not to be promoted by discouraging manufactures, 155;] cattle
and tillage mutually improve each other, 220; remarks on that of Scotland,
221-2; remarks on that of North America, 223; poultry a profitable article in
husbandry, 224; hogs, 225-6; dairy, 226; evidences of land being completely
improved, 228; the extension of cultivation as it raises the price of animal
food, reduces that of vegetables, 241-2; by whom and how practised under
feudal government, 317-18; its operations not so much intended, to increase,
as to direct, the fertility of nature, 344; has been the cause of the prosperity
of the British colonies in America, 347; the profits of, exaggerated by pro-
jectors, 355; [capable of absorbing more capital than has been applied to it,
2*5.;] on equal terms, is naturally preferred to trade, 357-8; artificers neces-
sary to the carrying it on, 2*5.; was not attended to by the Northern destroy-
ers of the Roman empire, 361; the ancient policy of Europe unfavourable
to, 371; was promoted by the commerce and manufactures of towns, 392;
[favoured by law of England, 393-4;] the wealth arising from, more solid and
durable, than that which proceeds from commerce, 396.
Is not encouraged by the bounty on the exportation of corn, 476; why the
proper business of new companies [? colonies], 575; the present agricultural
system of political oeconomy adopted in France, described, 627; is dis-
couraged by restrictions and prohibitions in trade, 636; is favoured beyond
manufactures in China, 644; and in Indostan, 646; does not require so
extensive a market as manufactures, 647; to check manufactures, in order
to promote agriculture, false policy, 650-1; [supposes a settlement, 655;]
landlords ought to be encouraged to cultivate part of their own land, 784,
Agrigentum, rivalled mother city, 533.]
Agrippina, her white nightingale, 219 ]
Aides, the French, farmed, 855 ]
Aix la Chapelle, treaty of, 704, 707, 874; university of, 763.]
Alcavala, the tax in Spain so called, explained and considered, 850-1; the ruin of
the Spanish manufactures attributed to this tax, ib.
[Ale, licences to sell, 804; incidence of taxes on, 828 ]
Alehouses, the number of, not the efiScient cause of drunkenness, 343, 459.
Alexander the Great, private pupil of Aristotle, 133; conquests, 527.]
Alexander III., Pope, bull for emancipation, 367 ]
|Alien merchants taxed, 830.]
'Alienation, fines on, 81 1.]
Allodial rights, mistaken for feudal rights, 387; the introduction of the feudal
law tended to moderate the authority of the allodial lords, 388.
[Almagro went in search of gold, 529.]
[Alsace treated as foreign, 852.]
Ambassadors, the first motive of their appointment, 690.
America, [colonisation has followed coast and rivers, 19; mines diminished value
of gold and silver, 34, 191-2, 198, 236, 241, 415-6; planters are farmers as
well as proprietors, 53;] why labour is dearer in North America than in
England, 69, 70; [not so rich as England, 70;] great increase of population
there, 70, 71; [people marry early yet there is a scarcity of hands, 71; British
colonies illustrate genius of British constitution, 73; rapid propagation, 80;
stamp act, 84;] common rate of interest there, 92; [acquisitions of territory
INDEX
909
raised interest in Britain, 93; rate of profit in trade with, lower than in
Jamaican trade, in; com could not be cultivated by factors like sugar, 157;
skins thrown away by natives of, 162; landlords would like trees removed,
163;] is a new market for the produce of its own silver mines, 202; the first
accounts of the two empires of Peru and Mexico, greatly exaggerated, 203,
416; improving state of the Spanish colonies, ih.\ [East Indies takes the
silver of, 204; the tax forms the whole rent of Spanish gold and silver mines,
213; slovenly husbandry in British colonies, 222-3; cattle killed for hide and
taUow, 229; paper currency for small sums, 306-7; interior commerce com-
pletely carried on by paper, 307;] account of the paper currency of the
British colonies, 310, 31 1; [state of savages, like that of England in time
of Julius Caesar, 327;] cause of the rapid prosperity of the British colonies
there, 347; [carrying trade of goods to Europe, 354, 355;] why manufac-
tures for distant sale have never been established there, 359; [artificers em-
ploy savings in purchase and cultivation of land, ih,)[ its speedy improve-
ment owing to assistance from foreign capitals, 360; [no produce returns
such profits as sugar, 366; rapid advance founded on agriculture, 392;]
the purchase and improvement of uncultivated lands, the most profitable
emplo5rmcnt of capitals, 393; [first inquiry of Spaniards always for gold and
silver, 398; discovery caused a revolution in commerce, 405; great part of
expense of last French war laid out there, 410;] commercial alterations pro-
duced by the discovery of, 415, 416; but two civilized nations found on the
whole continent, 416; [European commerce with, more advantageous than
East India trade, 417; returns to trade with, infrequent, 462-3; not more
than three million people in British North American colonies, ih.; poorer
than France, i6.;] the wealth of the North American colonies increased,
though the balance of trade continued against them, 464-5.
[Revolt, ii. 467, 470; long coastline and slender British authority, 469;]
Madeira wine, how introduced there, ih.\ [drawback on exports to, 471;
the war, 487; settled by different motives from Greek and Roman colonies,
523; no necessity for, 525;] historical review of the European settlements in,
526-31; of Spain, 534; of Holland, 535-7; of France, 538; of Britain, 538;
ecclesiastical government in the several European colonies, 541; fish a
principal article of trade from North America to Spain, Portugal, and the
Mediterranean, 545; naval stores to Britain, 546; [slave labour, 553;] little
credit due to the policy of Europe from the success of the colonies, 555;
[folly and injustice presided over original settlement, 555; Europe magna
virum mater, 556;] the discovery and colonization of, how far advantageous
to Europe, 557-96, and to America, 590; [augmented European industry,
557; an advantage to countries which never sent exports there, 557-8;
surplus produce the source of advantage to Europe, 559; contributes no
military force to mother countries, tb.) and little revenue, ib.‘, exclusive
trade supposed the peculiar advantage, 560; rapid progress unforeseen, 564;
monopoly attracted capital, 567; uncertain, remote and irregular returns of
trade to, 568; effects of stoppage of trade, 572-3; European market for
bread and meat extended, 575; shop-keeping policy adopted towards,
579-80; taxation by requisition, 585; ambition of leading men, 586; possible
removal of seat of government to, 590; discovery of, one of the two greatest
events in history, 590; mother countries have the show but not all the
advantages, 591-5;] the colonies in, governed by a spirit of monopoly,
595-6; [more thriving than colonies in Africa, 599; bounty on naval stores
from, 609; Britain sometimes courts and sometimes quarrels with, 610;
bounties, 610-1;] the interest of the consumer in Britain sacrificed to
that of the producer, by the system of colonization, 626; [natives of, were
hunters, 653; and contemptible opponents, 655; colonial militia becoming a
standing army, 662; natives of, regarded age as the sole foundation of rank,
671; poll taxes, 808; productions of, articles of common use in Great Bri-
tain, 834;] plan for extending the British system of taxation over all the
provinces of, 887; the question how the Americans could pay taxes without
910 INDEX
specie considered, 892; ought in justice to contribute to discharge the public
debt of Great Britain, 896; expediency of their union with Britain, 897; the
British empire there, a mere project, 899.
Amsterdam, [190, 421, 445, 579, 616, 770;] agio of the bank of, [how accounted
for by some people, 312;] explained, 445; occasion of its establishment, 446,
447; advantages attending payments there, 448; rate demanded for keeping
money there, 448-9; prices at which bullion and coin are received, ih., note;
this bank, the great warehouse of Europe for bullion, 451; demands upon,
how made and answered, 451-2; the agio of, how kept at a medium rate,
453; the treasure of, whether all preserved in its repositories, ib . ; the amount
of its treasure only to be conjectured, 454; fees paid to the bank for trans-
acting business, ib.
^Anderson, Adam, quoted, 702,]
^Anderson, James, quoted, 183, 213, 281.]
‘Angola, 525, 599.]
Annuities for terms of years, and for lives, in the British finances, historical
account of, 868-869.
^Antigua, 564, 895.]
Antoninus, Marcus, 731.]
Antwerp, 396, 44 Sj 446.]
.Aperea of Brazil, 527 J
UAiroiKtaj 525.]
Apothecaries, the profit on their drugs imjustly stigmatized as exorbitant, 112.
[ Apothecary shop a source of profit to Hamburg, 769-70.]
[Apples imported from Flaiiders in seventeenth century, 7^]
{Apprenticeship statutes raise wages more permanently than they lower them,
61.]
Apprenticeship, the nature and intention of this bond servitude explained, ior-2;
the limitations imposed on various trades, as to the number of apprentices,
118-9; statute of apprenticeship in England, 120; apprenticeships in
France and Scotland, 121; general remarks on the tendency and operation
of long apprenticeships, 122-3; [obstructs free circulation of labour from
one employment to another, 134; means of gaining a settlement, 137-8;] the
statute of, ought to be repealed, 437.
[Relation to privileges of graduates, 719.]
[Arabia, hospitality of chiefs, 386; histories full of genealogies, 391; riches long
in the same family, ib.]
[Victorious when united, 655; militia, 662; despotic authority of scherifs,
672; revenue of chiefs consists of profit, 769.]
[Arabia, Gulf of, favourable to commerce, 21.]
Arabs,, their manner of supporting war, 653-4.
;Aragon, 528.]
Arbuthnot, Dr. John, quoted, 649.]
’Archipelago, 573.]
Ar^le, the Duke of, 387.]
^Aristotle, munificently rewarded by Philip and Alexander, 133; Lyceum as-
signed to, 731; a teacher, 764; quoted, 365, 729.]
[Arithmetic, political, untrustworthy, 501; of the customs, two and two make
one, 83 2. J
[Armada, the defeat of, stopped Spanish obstruction of colonisation, 536; less
alarming than the rupture with the colonies, 571.]
Army, [a disadvantageous lottery, 109;] three different ways by which a nation
may maintain one in a distant country, 409; standing, distinction between
aid a militia, 660; historical reivew of, 663; the Macedonian army, ib.;
Carthaginian army,^ 663-4; Roman army, 664-5; [courageous without
active service, 666;] is alone able to perpetuate the civilization of a country,
667; is the speediest engine for civilizing a barbarous country, ib.; under
what circumstances dangerous to, and under what, favourable to liberty,
INDEX 911
667-8; [small, would be suficient if martial spirit prevailed, 73S-9; no se-
curity to the sovereign against a disaffected clergy, 749.]
Artificers, prohibited by law from going to foreign countries, 624; icsiding
abroad, and not returning on notice, exposed to outlawry, ih,\ [serving In
an army must be maintained by the public, 656-7;] see Manufactures.
[Aj, originally a pound of copper, 26; reduced to /j, 27; always a copper coin,
39; reduced at end of ist Punic war, 883-4.]
[Ascetic morality taught as moral philosophy, 726.]
Asdrubal, his army greatly improved by discipline, 663-4; [the younger], how de-
feated, 664,
[Asinius Celer gave large price for a surmullet, 219.]
Assembly, houses of, in the British colonies, the constitutional freedom of,
shewn, 551-2.
Assiento contract, 703.
[Assize of bread, 142.]
Assize of bread and ale, remarks on that statute, 178, 183.
[Athens, large fees of teachers at, 133; artisans were slaves, 648; paid soldiers
of, 657.]
[Atlantic, 589, 591.]
[Augmentation of coin defined, 885.]
Augustus, emperor, emancipates the slaves of Vedius Pollio, for his cruelty, 554.
'Aulnagers, 25.]
Austere morality favoured by the common people, 746.]
Austria, little assisted by the Danube, 21; noilitia defeated by the Swiss, 666;
survey for land tax, 887.]
[Ayr Bank, history of, 297-8.]
[Ayrshire, rise of demand for labour in, 76.]
[Azores, 525.]
[Babylon, 365.]
[Bahamas, 526.]
[Bakers, incorporation of, in Scotland, 143.]
[Balance of employments, 489,]
Balance of annual produce and consumption explained, 464; may be in favour
of a nation, when the balance of trade is against it, 464-5.
Balance of trade, [absurd speculations concerning, 357;] no certain criterion to
determine on which side it turns between two countries, 442; the current
doctrine of, on which most regulations of trade are founded, absurd, 456; if
even, by the exchange of their native commodities, both sides may be gain-
ers, i}),\ how the balance would stand, if native commodities on one side,
were paid with foreign commodities on the other, 456-7; how the balance
stands when commodities are purchased with gold and silver, 457-8; the
ruin of countries often predicted from the doctrine of an unfavourable
balance of trade, 463.
[Balboa, Nugnes de, 529.]
[Baltic, 21; wood from, 163; flax and hemp, 346; tobacco to, 569; manufactures
for, 591.]
Banks [sometimes pay in sixpences to gain time, 44, 304; private, in London
allow no interest but in Edinburgh give 4 per cent, on notes, 90; Scotch
banking, 281-302;] great increase of trade in Scotland, since the establish-
ment of them in the principal towns, 281; their usual course of business,
282; consequences of their issuing too much paper, 285; necessary caution
for some time observed by them with regard to giving credit to their cus-
tomers, 289; limits of the advances they may prudently make to traders,
291; how injured by the practice of drawing and redrawing bills, 295; his-
tory of the Ayr bank, 297-9; history of the bank of England, 302-3; the
nature and public advantage of banks considered, 304, 305; bankers might
carry on their business with less paper, 307, 308; effects of the optional
912 INDEX
clauses in the Scots notes, 309; origin of their establishment, 447; bank
money explained, ih.
Of England, the conduct of, in regard to the coinage, 519; [those of Edin-
burgh have no exclusive privilege, 714;] joint stock companies why well
adapted to the trade of banking, 714, 715; a doubtful question whether the
government of Great Britain is equal to the management of the bank to
profit, 770.
Bankers, the credit of their notes how established, 277; the nature of the banking
business explained, 277, 282; the multiplication and competition of bankers
under proper regulation, of service to public credit, 313.
[Bank of Amsterdam, see Amsterdam.]
[Bank of England, had to coin much gold, 286, 287; discounts, 295; history,
302-4.]
[Large capital, 700; enables government to contract unfunded debt,
863-4; stopped usual business during the recoinage, ^*6.; advances the
proceeds of taxes, 865; taxes first mortgaged in perpetuity for its advance,
866; advances at January 1775, 875.]
Bank of Scotland, 281.]
Bank, the Royal, 281.]
Bank-money, of greater value than currency, 445; explained, 447.]
Bank notes, not below £10 in London, 306, 307; should not be for less than £5,
307*]
[Bankruptcy most frequent in hazardous trades, in; greatest and most humili-
ating misfortune, 325.]
[Bar, 856.]
[Barbadoes, early prosperity, 564; all cultivated, 895.]
[Barbary, 380; 697.]
Baretti, Mr., ids account of the quantity of Portugal gold sent weekly to Eng-
land, 513-4.
Barons, feudal, their power contracted, by the grant of municipal privileges, 376;
their extensive authority, 386, 387; how they lost their authority over their
vassals, 388-9; and the power to disturb their country, 390-1; [influence of,
752-3; revenue spent on luxuries, 755.]
Barter, the exchange of one commodity for another, the propensity to, of ex-
tensive operation, and peculiar to man, 13; is not sufiQcient to carry on the
mutual intercourse of mankind, 22; [ceases on the introduction of money,
32;] see Commerce.
[Basel, chief revenue from export duty, 802.]
Batavia, causes of the prosperity of the Dutch settlement there, 599-600.
Bath Road inn, fallen fortune of, 330.]
Bavaria, Danube no use to, 21,]
Bayonne treated as foreign to France, 852.]
Bazinghen, Abot de, quoted, 518.]
Beaumont, J. L. Moreau de, see M6moires.]
Beaver skins, review of the policy used in the trade for, 623; [subject to export
duty, 832.]
[Becket used clean hay, 385.]
Beef, cheaj>er now in London, than in the reign of James I., 151; compared with
the prices of wheat at the corresponding times, 15 1, 152; [compared with
pork in France and England, 225-6.]
[Beggar, alone depends on benevolence, 14; once synonymous with scholar, 132.]
Benefices, ecclesiastical, the tenure of, why rendered secure, 750; the power of
collating to, how taken from the Pope, in England and France, 756; general
equality of, among the Presbyterians, 761; good effects of this equality, 762.
[Benefit of clergy, 754.]
[Benevolence, does not give us our dinner, 14,]
Bengal, to what circumstance its early improvement in agriculture and manu-
factures was owing, 20; present miserable state of the country, 73; remarks
on the high rates of interest there, 94; [profits eat up rent and leave only
INDEX 913
subsistence for wages, 94, 97; piece goods exports, 205; ratio of gold to
silver, 210-1.]
[Improper regulations turned dearth into famine, 493;] oppressive con*
duct of the English there to suit their trade in opium, 601; [revenue from
land rent, 601-2;] why more remarkable for the exportation of manufactures
than of grain, 647; [ancient land tax, 789, 791; good roads, 789.]
[Bengal, Gulf of, favourable to commerce, 21.]
[Benguela, 525, 599.]
Berne, [farmers equal to the English, 371;] brief history of the republick of, 37S.
Establishment of the reformation there, 758; application of the revenue of
the Catholic clergy, 765; derives a revenue from the interest of its treasure,
772; [tax on alienation, 811; only state which has a treasure, 861.]
Bernier, Francois, quoted, 688.]
Bettering one’s condition, universal desire of, 324, 326, 329, 508, 632.]
Bible commonly read in Latin, 721-2.]
Bills of exchange, [discounting of, chief means of issuing bdnk notes, 282;] punc-
tuality in the payment of, how secured, 293-4; the pernicious practice of
drawing and redrawing explained, 294; the arts made use of to disguise this
mutual traffic in bills, 296.
[Billets d^Uat^ sometimes at 60 or 70 per cent, discount, 864.]
[Birch, Dr. Thomas, quoted, 151.]
[Birmingham produces articles of fashion and fancy, 115; manufactures not
within the statute of apprenticeship, 120-1; uses £50,000 in gold and silver
annually, 207, 209; reduction in price of goods, 243; manufactures grew up
naturally, 383; hardware exchanged for wine, 848.]
Birth, superiority of, how it confers respect and authority, 672.
Bishops, the ancient mode of electing them, and how altered, 751-2, 756.
[Blackstone, William, quoted, 35, 366.]
[Blanc, Cape, 696.]
Body, natural, and political, analogy between, 638.
Bohemia, [serfs still exist in, 365; survey and valuation, 786, 787;] account of the
tax there on the industry of artificers, 817.
Bombay, 709.]
Bordeaux, see Bourdeaux.]
Borlase, quoted, 168.]
Born, Ralph de, his feast, 178.]
Borough, see Burghs.]
Boston, high-paid free labour cheaper than slave, 81; less populous than Mexico
or Lima, 535.]
[Bouchaud, quoted, 810.]
[Bounder, proprietor of Cornish tin mine, 170.]
Bounties, why given in commerce, 418-9. ^
On exportation, the policy of granting them, considered, 472; on the ex-
portation of corn, 473; this bounty imposes two taxes on the people, 475;
evil tendency of this bounty, 480; the bounty only beneficial to the exporter
and importer, 481; motives of the country gentlemen in granting the
bounty, ih . ; a trade which requires a bounty, necessarily a losing trade, 483 ;
[bounties on production, 483;] tonnage bounties to the fisheries considered,
484; account of the white-herring fishery, 488; remarks on other bounties,
ih.\ a review of the principles on which they are generally granted, 609;
those granted on American produce founded on mistaken policy, 612; how
they affect the consumer, 625-6; [public teachers receive a sort of, 733;
bounty on corn worse than a tax on necessaries, 826; on articles formerly
charged with export duties, 831; give rise to frauds, 833; abolition of, pro-
posed, 836; deducted from customs revenue, 847.]
Bounty on the exportation of corn, the tendency of this measure examined, 193;
[196-9; and see Bounties.]
[Bourbon, the house of, united by British acquisition of Gibraltar and Minorca,
699.]
914 INDEX
Bourdeaux, why a town of great trade, 319; [memoir of the parliament of, as to
French debt, 870.]
[Brady, Robert, quoted, 374-1
[Braganza, family of, 535 ]
Brazil [aborigines had neither arts nor agriculture, 203; gold of, 351, 404, 458,
^ Grew to be a powerful colony under neglect, 535; the Dutch invaders
expelled by the Portugueze colonists, 536; computed number of inhabitants
there, 536; [Portuguese settled in, ib.)[ the trade of the principal provinces
oppressed by the Portu^eze, 542; [Portuguese Jews banished thither, 555.]
Bread, its relative value with butcher's meat compared, 149, 151; [tax on, in
Holland, 826; levied by licence, 829.]
[Breslau, tax on the Bishop's land, 786.]
Brewery, reasons for transferring the taxes on, to the malt, 839-40; [for private
use, untaxed, 84^.]
Bridges, how to be erected and maintained, 682; [originally maintained by six
days' labour, 773.]
[Bristol and the African Company, 697.]
Britain, Great, evidences that labour is sufficiently paid for there, 74; the price
of provisions nearly the same in most places, 74; great variations in the price
of labour, 74, 75; vegetables imported from Flanders in the last century, 78;
historical account of the alterations interest of money has undergone, 88, 89;
double interest deemed a reasonable mercantile profit, 97; in what respects
the carrying trade is advantageous to, 352; appears to enjoy more of the
carrying trade of Europe, than it really has, 354; is the only country of
Europe in which the obligation of purveyance is abolished, 370; its funds
for the support of foreign wars inquired into, 410; why never likely to be
much affected by the free importation of Irish cattle, 426-7; nor salt pro-
visions, 427; could be little affected by the importation of foreign corn, ih.;
the policy of the commercial restraints on the trade with France examined,
441; the trade with France might be more advantageous to each country
than that with any other, 462.
Why one of the richest countries in Europe, while Spain and Portugal are
among the poorest, 508-9; review of her American colonies, 538-42 ; the trade
of her colonies, how regulated, 543-4; distinction between enumerated and
non-enumerated commodities, explained, restrains manufactures in
America, 547-8; indulgences granted to the colonies, 549; constitutional
freedom of her colony government, 551; the sugar colonies of, worse gov-
erned than those of France, 553; disadvantages resulting from retaining the
exclusive trade of tobacco with Maryland and Virginia, 560-1; the naviga-
tion act has increased the colony trade, at the expence of many other
branches of foreign trade, 562; the advantage of the colony trade estimated,
566; a gradual relaxation of the exclusive trade, recommended, 571-2;
events which have concurred to prevent the ill' effects of the loss of the
colony trade, 572-3; the natural good effects of the colony trade, more than
counterbalance the bad effects of the monopoly, 574; to maintain a mono-
poly, the principal end of the dominion assumed over the colonies, 5^; has
derived nothing but loss from this dominion, 581; is perhaps the only state
which has only increased its expences by extending its empire, 586; the con-
stitution of, would have been completed by admitting of American repre-
sentation, 589; review of the admmistration of the East India Company,
602-6; the interest of the consumer sacrificed to that of the producer in
raising an empire in America, 626; the annual revenue of, compared with its
annual rents and interest of capital stock, 774; the land-tax of, considered,
7^; tythes, 788; window tax, 797-8; stamp duties, 812, 815; poll taxes in the
reign of William III., 819; the uniformity of taxation in, favourable to in-
ternal trade, 851; the system of taxation in, compared with that in France,
856; account of the unfunded debt of, 863-4; funded debt, 864; aggregate,
and general funds, 867; sinking fund, 868; annuities for terms of years and
INDEX
915
for lives, ih.] perpetual annuities the best transferrable stock, 87 1; the re-
duction of the publick debts during peace, bears no proportion to their
accumulation during war, 874; the trade with the tobacco colonies, how
carried on, without the intervention of specie, 894; the trade with the sugar
colonies explained, ihr, Ireland and America ought in justice to contribute
toward the discharge of her public debts, 896; how the territorial acquisi-
tions of the East India company might be rendered a source of revenue, 898;
if no such assistance can be obtained, her only resource pointed out, ib,
British Empire, Statcs-general of the, 886, 887; colonies provinces of, 899.]
British Linen Company, 715.]
’Brittany, taille on lands held by ignoble tenure, 805.]
Bruges, commerce of, 396,]
Brutus, lent money at 48 per cent., 94.]
Buenos Ayres, price of oxen at, 14^ 186, 229.]
Buffon, G, L. L., quoted, 226, 527.]
Bullion, the money of the great mercantile republic, 41 1-2; see Gold and Silver.
[Burcester (now Bicester), price of hides at, 231.]
Burghs, free, the origin of, 375; to what circumstances they owed their corporate
jurisdictions, 375-6; why admitted to send representatives to parliament,
378-9; are allowed to protect refugees from the country, 379.
[Burgundy, vineyards, 155; militia defeated by the Swiss, 666.]
[Burman, quoted, 810.]
Burn, Dr., his observations on the laws relating to the settlements of the poor
[quoted, 77], I39j
Butcher, brutal and odious business, 100.
Butcher’s meat [progress of price of, 149; an insignificant part of the labourer’s
subsistence, 187;] no where a necessary of life, 827.
[Buttons, division of labour in making, 8.]
[Byelaw, to limit competition, can be enacted by a corporation, 129; of boroughs,
375. 377-]
I Byron, Hon. John, quoted, 1S6.]
[Cabbages, half the price they were forty years ago, 78.]
[Cadiz, imports of bullion to, 208; exorbitant profits and profusion at, 578, 592;
competition with South Sea Company, 704.]
[Caesar’s army destroyed the republic, 667.]
[Calcraft’s account, 876.]
[Calcutta, land carriage to, 19; ratio of gold and silver at, 21 1; council, 606, 709.]
Calvinists, origin of that sect, 759; their principles of church government, 760.
Cameron, Mr., of Lochiel, exercised within thirty years since, a criminal juris-
diction over his own tenants, 387.
[Campus Martius, 658, 729.]
Canada, the French colony there, long under the government of an exclusive
company, 538; but improved speedily after the dissolution of the company,
538.
Canals, navigable, the advantages of, 147; how to be made and maintained, 682,
that of Languedoc, the support of, how secured, 684; may be successfully
managed by joint stock companies, 714.
Canary islands, 525.]
Candles, taxes on, 78; an instrument of trade, 825.]
Cannae, battle of, 664.]
Cantillon, Mr. [Richard,] remarks on his account of the earnings of the labouring
poor, 68.
[Canton, silver will buy more commodities at, than in London, 37; poverty in the
neighbourhood of, 72.]
Cape of Good Hope, [discovery of passage by, 416, 525, 557, 590;] causes of the
prosperity of the Dutch settlement there, 599; [mentioned, 696.]
[Cape Coast Castle, 698.]
[Capet, Robert, 756.]
9i6 index
Capital, [manufacturer’s, 48, 49, 51; society’s, 94; in a trade, 108; of a grocer,
112; of merchants, 158; employed in a mine, 165;] in trade, explained, and
how employed, 262; distinguished into circulating and fixed capitals, 262-3;
characteristic of fixed capitals, 265; the several kinds of fixed capitals
specified, 265-6; characteristic of circulating capitals, and the several kinds
of, 266; fixed capitals supported by those which are circulating, ib.; circu-
lating capitals how supported, 267; intention of a fixed capital, 271; the
expence of maintaining the fixed and circulating capitals illustrated, 272;
money, as an article of circulating capital, considered, 273; money, no
measure of capital, 276; what quantity of industry any capital can employ,
279-80; capitals, how far they may be extended by paper credit, 290-1 ; must
alwa)^ be replaced with profit by the annual produce of land and labour,
316; the proportion between capital and revenue, regulates the proportion
between industry and idleness, 320; how it is increased or diminished, 321;
national evidences of the increase of, 326-7; in what instances private ex-
pences contribute to enlarge the national capital, 329-30; the increase of,
reduces profits by competition, 336; the difeerent ways of employing a
capital, 341; how replaced to the different classes of traders, 343; that em-
ployed in agriculture puts into motion a greater quantity of productive
labour, than any equal capital employed in manufactures, 345; that of a
manufacturer should reside within tihie country, 346; the operation of
capitals employed in agriculture, manufactures, and foreign trade, com-
pared, 346-7; the prosperity of a country depends on the due proportion of
its capital applied to these three grand objects, 348; different returns of
capitals employed in foreign trade, 350; is rather employed on agriculture
than in trade and manufactures, on equal terms, 357-8; is rather employed
in manufactures than in foreign trade, 359; the natural progress of the em-
plo3^ent of, 360; acquired by trade, is very precarious until realized by the
cultivation and improvement of land, 395; the employment of, in the differ-
ent species of trade, how determined, 421; [industry proportioned to, 424.]
[Distributed among inferior ranks annually, 838; and land, the two origi-
nal sources of revenue, 879.]
[Capital values, taxes on, 809-15.]
Capitation taxes, the nature of, considered, 818-9; in England, 819; in France,
820; [and see Poll taxes.]
Carlisle, exchange between London and, 310.]
'Carnatic, 707.]
'Carneades, 134.]
Carolina, planters both fanners and landlords, 159; plantation of, 564.]
€arreri, Gemelli, see under Gemelli.]
Carriage, land and water, compared, 18; water carriage contributes to improve
arts and industry, in all countries where it can be used, 19, 147, 206; [ab-
sence of cheap, causes settlement of finer manufactures, 382.]
Carriage, Land, how facilitated and reduced in price, by public works, 683.
[Carriage tax, 686.]
[Carron, 76.]
[Carrots reduced in price, 78,]
Carrying trade, [defined, i. 278;] the nature and operation of, examined, 351; is
the symptom, but not the cause, of national wealth, and hence points out
the two richest countries in Europe, 354; trades may appear to be carrying
trades, which are not so, ih.\ the disadvantages of, to individuals, 421; the
Dutch, how excluded from being the carriers to Great Britain, 430; draw-
backs of duties originally granted for the encouragement of, 470.
[Carthage, mariners sailed beyond Gibraltar, 19-20; the fate of, great historical
revolution, 663.]
[Carthagena, 667, 704.]
Carthaginian army, its superiority over the Roman army, accounted for, 664.
[Cash account at Scotch banks explained, 282-3.]
[Castile, 528.]
INDEX
917
'Castracani, Castruccio, drove out manufactures from Lucca, 381.]
'Casuistry taught as moral philosophy, 727.]
^Catholics established Maryland, 555.]
Cato, advised good feeding of cattle, 150; on communication of agricultural
knowledge, 429.]
Cattle, [at one time used as money, 23;] and corn, their value compared, in the
different stages of agriculture, 148; the price of, reduced by artificial grasses,
15 1 ; to what height the price of cattle may rise in an improving country,
220; the raising a stock of, necessary for the supply of manure to farms, 221;
cattle must bear a good price to be well fed, ih . ; the price of, rises in Scotland
in consequence of the union with England, 222; great multiplication of
European cattle in America, ih.\ are killed in some countries, merely for the
sake of the hides and tallow, 229; the market for these articles more exten-
sive than for the carcase, ib,; this market sometimes brought nearer home
by the establishment of manufactures, ih.\ how the extension of cultivation
raises the price of animal food, 241; [labouring, are a fixed capital, 263; im-
portation prohibited, 394;] is perhaps the only commodity more expensive
to transport by sea than by land, 426; Great Britain never likely to be much
affected by the free importation of Irish cattle, ih.
‘Ceded Islands, 545, 876, 895.]
'Celebes, 600.]
'Celtes cultivated music and dancing, 730.]
Certificates, parish, the laws relating to, with observations on them, 138-9.
[Chance of gain overvalued, 107.]
[Charles V., remark on the abundance of France and poverty of Spain, 202; be-
friended the Pope, 758.]
Charles VI, surveyed Milan, 786.]
Charles VIII., expedition to Naples, 394, 395.]
Charles XII. of Sweden, 414.]
Charlevoix, Francois, quoted, 538.]
Chastity, in the liberal morality, 746.]
'Chatham, Lord, his account, 876.]
Child, Sir Josiah, [quoted, 693;] his observation on trading companies, 695-6.
Children [value of, in North America, 70, 532;] riches unfavourable to the pro-
duction, and extreme poverty to the raising, of them, 79; the mortality still
greater among those maintained by charity, 79.
[Chili, takes Spanish iron, 167; rent of gold mines, 171; price of horses in, 186;
growth of towns of, 204; cattle killed for sake of hide and tallow, 229; con-
quest of, 529, 556.]
China, to what the early improvement in arts and industry there was owing, 20;
concurrent testimonies of the misery of the lower ranks of the Chinese, 71,
72; [one of the richest countries in the world, 71;] is not however a declining
country, 73; [stationap?- population, 80; long stationary and as rich as pos-
sible, 95;] high rate of interest of money there, 95; [country labourers higher
paid than artificers, etc., 127; price of silver affected by price in Peru, 168;
much richer than any part of Europe, 189, 238;] the price of labour there,
lower than in the greater part of Europe, [189,] 206; [trade with, 204, 205;]
great state assumed by the grandees, 205; [not much inferior to Europe in
manufacturing, 206;] silver the most profitable article to send thither, ih.;
the proportional value of gold to silver, how rated there, 211; [quantity of
precious metals affected by the abundance of American mines, 236;] the
value of gold and silver much higher there than in any part of Europe, 238;
[wonderful accounts of wealth and cultivation, 348; never excelled in
foreign commerce, ih,; wealthy without carrying on its own foreign trade
360; without mines richer and better off than Mexico or Peru, 416; replace-
ment of capital employed, 457; acquired wealth by agriculture and interior
commerce, 462.]
[Importance of the Cape and Batavia to the trade with Europe, 600;]
agriculture favoured there, beyond manufactures, 644; foreign trade not
INDEX
favoured there, 6445 extension of the home-market, ib,) great attention paid
to the roads there, 687; [land tax the principal source of revenue, 688;] in
what the principal revenue of the sovereign consists, *7895 [consequent
goodness of roads and canals, tb,;] the revenue of, partly raised in kind, 790;
[silk, 837.]
'Chocolate, a luxury of the poorest Spaniards, 823; duty on, 837.]
'Choiseul, Duke of, managed the parliament of Paris, 751 ]
Christianity established by law, 722 ]
[Christiern II., Reformation in Sweden assisted by his tyranny, 758 ]
* Church, [of England not successful in resisting enthusiasts, 741; loyal, 759;
drains the universities, 763;] the richer the church, the poorer the state, 765;
amount of the revenue of the church of Scotland, 765; the revenue of the
church heavier taxed in Prussia, than lay proprietors, 786; the nature and
effect of tythes considered, 7S8
Cibao, 526.]
Cicero, quoted, 94, 150, 827.]
Cipango, 526.] _
Circulation, the dangerous practice of raising money by, explamed, 294; in
traffic, the two different branches of, considered, 306.
Cities, circumstances which contributed to their opulence, 379; those of Italy
the first that rose to consequence, 380; the commerce and manufactures of,
have occasioned the improvement and cultivation of the country, 392.
Clergy, a supply of, provided for, by public and private foundations for their
education, 130,* curates worse paid than many mechanics, 13 1.
[Of North American colonies, not numerous, and maintained by volun-
tary contributions, 541; greatest engrossers of land in colonies of Spain,
Portugal and France, ^6.]; of an established religion, why unsuccessful
against the teachers of a new religion, 741; why they persecute their adver-
saries, id.; the zeal of the inferior clergy of the church o£ Rome, how kept
alive, ib.; utility of ecclesiastical establishments, 743; how connected with
the civil magistrate, 744; unsafe for the civil magistrate to differ with them,
749 j must be managed without violence, 750; of the church of Rome, one
great army cantoned over Europe, 752; their power similar to that of the
temporal barons, during the feudal monkish ages, ib.; how the power of the
Romish clergy declined, 755; evils attending allowing parishes to elect their
own ministers, 760.
Cloathing, more plentiful than food, in uncultivated countries, 16 1; the mate-
rials for, the first articles rude nations have to offer, 162.
Coach, a man not rich because he keeps a, 76.]
Coach and six not effectually demanded by a very poor man, 56.]
^Coach-tax better levied as an annuity than as a lump sum, 827.]
Coal, must generally be cheaper than wood to gain the preference for fuel, 165;
the price of, how reduced, 166-7; fhe exportation of, subjected to a duty
higher than the prime cost of, at the pit, 623; the cheapest of all fuel, 825;
[manufactures confined to coal countries in Great Britain, tb.;] the tax on
[seaborne], absurdly regulated, tb.
Coal mines, their different degrees of fertility, 165; when fertile, are sometimes
unprofitable by situation, 165, 167; the proportion of rent generally paid
for, 167; the machinery necessary to, expensive, 263.
Coal trade from Newcastle to London, employs more shipping than all the othei
carryi^ trade of England, 352.
Cochin China, remarks on the principal articles of cultivation there, 156-7.
[Cockfighting has ruined many, 859.]
[Cod used as money, 23.]
Coin, stamped, the origin, and peculiar advantages of, in commerce, 25; the
different species of, in different ages and countries, 26; causes of the alter-
ations in the value of, 27, 32, 34; how the standard coin of different nations
came to be of different metals, 38-9; a reform in the English coinage sug-
gested, 44-s; [gold and silver had the qualities which gave them value before
INDEX
919
they were coined, 172;] silver, consequences attending the debasement of,
194; [amount of Scotch, 212-3; amount of British, 410;] coinage of France
and Britain, examined, 444.
Why coin is privately melted down, 516, 517; the mint chiefly employed
to keep up the quantity thus diminished, 517; a duty to pay the coinage
would preserve money from being melted or counterfeited, 517, 518; stan-
dard of the gold coin in France, 518; how a seignorage on coin would oper-
ate, ib.', a tax upon coinage is advanced by every body, and :^ally paid by
nobody, 520, 521; a revenue lost, by government defraying the expence of
coinage, 521; amount of the annual coinage before the late reformation of
the gold coin, ib.; the law for the encouragement of, founded on prejudice,
522; consequences of raising the denomination of, as an expedient to facili-
tate pa)nnent of public debts, 882; adulteration of, 883.
Colbert, M., the policy of his commercial regulations disputed, 434, 628; his
character, 627-8.
Colleges, cause of the depreciation of their money rents inquired into, 35; the
endowments of, from whence they generally arise, 716; whether they have
in general answered the puiposes of their institution, ib.; these endowments
have diminished the necessity of application in the teachers, 717; the privi-
leges of graduates by residence, and charitable foundation of scholarships,
injurious to collegiate education, 719; discipline of, 720.
Colliers and coal-heavers, their high earnings accounted for, 104.
[Coloni Partiarii or Metayers, 366.]
[Colonia signifies a plantation, 525.]
Colonies, new, the natural progress of, 92; [restrictions on hatters’ apprentices
in the English, 119; planters in British, usually farmers as well as landlords,
X59; paper currency of British, 311; slave cultivation in British, 365-6;]
modern, the commercial advantages derived from them, 419.
Ancient, on what principles founded, 523; ancient Grecian colonies not
retained under subjection to the parent states, ih.; [Roman colonies, 524-5;]
distinction between the Roman and Greek colonies, ib,\ circumstances that
led to the establishment of European colonies in the East Indies and
America, 525; the East Indies discovered by Vasco de Gama, 526; the West
Indies discovered by Columbus, ih,) gold the object of the first Spanish
enterprises there, 529; and of those of all other European nations, 531;
causes of the prosperity of new colonies, 531 [-56]; rapid progress of the
ancient Greek colonies, 533; the Roman colonies slow in improvement, ib.;
the remoteness of America and the West Indies, greatly in favour of the
European colonies there, 533; review of the British American colonies, 538;
expence of the civil establishments in British America, 540; ecclesiastical
government, 541; general view of the restraints laid upon the trade of the
European colonies, 541; the trade of the British colonies, how regulated,
543-4; the different kinds of non-enumcrated commodities specified, ib.;
enumerated commodities, 546; restraints upon their manufactures, 547-8;
indulgences granted them by Britam, 550; were free in every other respect
except as to their foreign trade, 551; little credit due to the policy of Europe
from the success of the colonies, 555; throve by the disorder and injustice of
the European governments, 555; have contributed to augment the industry
of all the countries of Europe, 557; exclusive privileges of trade, a dead
weight upon all these exertions both in Europe and America, 558; have in
general been a source of expence instead of revenue to their mother coun-
tries, 560; have only benefited their mother countries by the exclusive trade
carried on with them, 560; consequences of the navigation act, 562; the
advantage of the colony trade to Britain estimated, 566; a gradual relaxa-
tion of the exclusive commerce recommended, 571-2; events which have pre-
vented Britain from sensibly feeling the loss of the colony trade, 572-3; the
effects of the colony trade, and the monopoly of that trade, distinguished,
574; to maintain a monopoly, the principal end of the dominion Great
Britain assumes over the colonies, 580; amount of the ordinary peace estab
920 INDEX
lishment of, ih.; the two late wars Britain sustained, colony wars, to support
a monopoly, 581; two modes by which they might be taxed, 583; their
assemblies not likely to tax them, ib.; taxes by parhamentary requisition, as
little likely to be raised, 584; representatives of, might be admitted into the
British parliament with good effect, 586; answer to objections against
American representation, 589; the interest of the cons^er in Britain,
sacrificed to that of the producer, in raising an empire in America, 626;
[should contribute to the revenue or be cut off, 900.]
Coliunbus, the motive that led to his discovery of America, 526; why he gave the
names of Indies to the islands he discovered, 526-7; his triumphal exhibition
of their productions, 528.
Columela,his instruction for fencing a kitchen-garden, 153; advises the planting
of vineyards, 154; [quoted, 224, 365.]
Combination among masters easier than among workmen and not prohibited
by law, 66.] ^
Commerce, the different common standards or mediums made use of to facilitate
the exchange of commodities, in the early stages of, 23; origin of money, ib.;
definition of the term valuej 28.
Treaties of, though advantageous to the merchants and manufacturers of
the favoured country, necessarily disadvantageous to those of the favouring
country, 5rr; translation of the commercial treaty between England and
Portugal concluded in 1703 by Mr. Methuen, 512-3; restraints laid upon
the European colonies in America, 541; the present splendor of the mercan-
tile system, owing to the discovery and colonization of America, 590; review
of the plan by which it proposes to enrich a country, 6o7[-626]; the interest
of the consumer constantly sacrificed to that of the producer, 625; see Agri-
culture, Banks, Capital, Manufactures, Merchant, Money, Stock, Trade,
&c.
Commodities, the barter of, insufEcient for the mutual supply of the wants of
mankind, 22; metals found to be the best medium to facilitate the exchange
of, 23; labour an invariable standard for the value of, 33; real and nominal
prices of, distinguished, ib.; the component parts of the prices of, explained
and illustrated, 49-50; the natural, and market prices of, distmguished, and
how regiilated, 55; the ordinary proportion between the value of any two
commodities, not necessarily the same as between the quantities of them
commonly in the market, 212; the price of rude produce, how affected by
the advance of wealth and improvement, 217; foreign, are primarily pur-
chased with the produce of domestic industry, 349; when advantageously
exported in a rude state, even by a foreign capital, 359-60; the quantity of,
in every country, naturally regulated by the demand, 404; wealth in goods,
and in money, compared, 406; exportation of, to a proper market, always
attended with more profit, than that of gold and silver, 41 1; the natural ad-
vantages of countries in particular productions, sometimes not possible to
struggle against, 425.
[Commons, the House of, not a very equal representation of the people, 551; un-
trustworthy reports of debates in, 697.]
Company, [government of an exclusive, the worst of all governments, 537; most
effectual expedient for stopping growth of a colony, 542;] mercantile, in-
capable of consulting their true interests when they become sovereigns,
601-2; an exclusive company, a public nuisance, 606; trading, how first
formed, 691; regidated, and joint stock companies, distinguished, 691-2;
regulated companies in Great Britain, specified, 692; are useless, 693; the
constant view of such companies, 695; forts and garrisons, why never main-
tained by regulated companies, ib.; the nature of joint stock companies
explained, 699, 712; [seldom successful without an exclusive privilege, 700;
account of several companies, 700-11;] a monopoly necessary to enable a
joint stock company to carry on a foreign trade, 712; [Morellet's list of
fifty-five failures, 713;] what kind of joint stock companies need no exclu-
sive privileges, ib.; joint stock companies, why well adapted to the trade of
INDEX
921
banking, ib.; the trade of insurance may be carried on successfully by a
[joint] stock company, 714; also inland navigations, and the supply of water
to a great city, ib.; ill success of joint stock companies in other undertakings,
715 -
Competition, the effect of, in the purchase of commodities, 56; among the
venders, 57, 87; [restraint of, causes inequalities of wages and profits, 118,
129; the only cause of good management, 147; of shopkeepers, cannot hurt
the producer or the consumer, 343.]
[Compi^gne, 319.]
[Conceit, men’s overweening, often noticed, 107.]
Concordat, in France, its object, 756.
[Condom, 805.]
[Congo, 525, 599 -]
Congress, American, its strength owing to the important characters it confers on
the members of it, 587.
Connecticut, esspense of, 540; governor elected by the assembly, 852.]
Considerations on the Trade and Finances of Great Britain^ quoted, 875.]
Constantine, 665.]
Constantinople, 750.]
'Consumable goods, taxes on, finally paid by the consumer at convenient time,
778; paid indifferently from the three kinds of revenue, 810; incidence of, &c.,
821-58.]
[Consumption the sole end of production, 625.]
[Contrdle, the, French stamp duties on registration, 814.]
Conversion price, in the payment of rents in Scotland, explained, 181.
[Copartnery, difference between it and a joint-stock company, 699.]
[Copenhagen, 320.]
Copper, [Romans used unstamped bars of, as money, 24;] the standard measure
of value among the ancient Romans, 39; is no legal tender in England, ib.;
[rated above its value in the English coinage, 43; not legal tender for more
than a shilling, 44.]
[Copyholders, 805.]
[Copyright, a monopoly granted to an author, 712.]
Cori, the largest quadruped on the island of St. Domingo, described, 527.
Corn, the raising of, in different countries, not subject to the same degree of
rivalship as manufactures, 6 ; is the best standard for reserved rents, 34; the
price of, how regulated [varies more from year to year than silver], 36; the
price of, the best standard for comparing the different values of particular
commodities at different times and places, 38; the three component parts in
the price of, 50; is dearer in Scotland than in England, 75; [corn-field pro-
duces more food than pasture of equal extent, 148;] its value compared with
that of butchers meat, in the different periods of agriculture, 148, 152; com-
pared with silver, 176-8; circumstances in a historical view of the prices of
corn, that have misled writers in treating of the value of silver at different
periods, 181; [at all stages of improvement costs the price of nearly equal
quantities of labour, 186-7;] is always a more accurate measure of value,
than any other commodity, ib.; why dearer in great towns than in the
country, 190; why dearer in some rich commercial countries, as Holland and
Genoa, ib.; rose in its nominal price on the discovery of the American
mines, 191 ; and in consequence of the civil war under king Charles I., 192-3;
and in consequence of the bounty on the exportation of, ib.; tendency of the
bounty examined, 196-7; [recent high price due to bad seasons, 198;]
chronological table of the prices of, 251-8; the least profitable article of
growth in the British West Indian colonies, 366; the restraints formerly laid
upon the trade of, unfavourable to the cultivation of land, 371-2; [bounty on
exportation and duties on importation, 394;] the free importation of, could
little affect the farmers of Great Britain, 428.
The policy of the bounty on the exportation of, examined, 473; the reduc-
tion in the price of corn, not produced by the bounty, 474; tillage not en-
922 INDEX
couraged by the bounty, 474-6; the money price of, regulates that of all
other home-made commodities, 477; illustration, 478; ill effects of the
bounty, 480-1; motives of the country gentlemen in granting the bounty,
481; the natural value of corn not to be altered by altering the money price,
482; the four several branches of the corn trade specified, 490; the inland
dealer, for his own interest will not raise the price of corn higher than the
scarcity of the season requires, ih.\ corn a commodity the least liable to be
monopolized, 492; the inland dealers in corn too numerous and dispersed to
form a general combination, 492; dearths never artificial, but when govern-
ment interferes improperly to prevent them, ih.' the freedom of the corn
trade, the best security against a famine, 493; old English statute to pro-
hibit the com trade, 494; consequences of farmers being forced to become
corn dealers, 495; the use of corn dealers to the farmers, 498; the prohibitory
statute against the corn trade softened, 499; but still under the influence of
popular prejudices, ih.\ the average quantity of corn imported and exported,
compared with the consumption and annual produce, 501; tendency of a
free importation of corn, 501-2; the home market the most important one
for com, 502; duties payable on the importation of grain, before 13 Geo.
III., 503, note‘j the impropriety of the statute 22 Car. II. for regulating the
importation of wheat, confessed by the suspension of its execution, by
temporary statutes, 504; the home-market indirectly supplied by the ex-
portation of com, ih.] how a liberal system of free exportation and importa-
tion, among all nations, would operate, 506; the laws concerning corn, simi-
lar to those relating to religion, 507; the home-market supplied by the
cariying trade, ih.\ the system of laws connected with the establishment of
the bounty, undeserving of praise, ih,\ remarks on the statute 13 Geo. III.,
509; [restrictions on French com trade removed, 642-3; bounty on corn
worse than a tax on necessaries, 826.]
[Com, Essay on the Legislation and Commerce ofy quoted, 856.]
[Cornwall, 168-70.]
Corporations, tendency of the exclusive privileges of, on trade, 61, 1 19; by what
authority erected, 123-4; the advantages corporations derive from the sur-
rounding country, 124; check the operations of competition, 127; their
internal regulations, combinations against the public, 128; are injurious,
even to the members of them, 129; the laws of, obstmet the free circulation
of labour, from one employment to another, 135; the origin of, 375; are
exempted by their privileges from the power of the feudal barons, 376; the
European East India Companies disadvantageous to the eastern commerce,
417; the exclusive privileges of corporations ought to be destroyed, 437.
Cortez, 529.]
Corv6e, a principal instrument of tyranny, 689.]
Cossacks, treasures of their chief, 414.]
Cost, real, defined, 55.]
Cottagers, in Scotland, their situation described, 116; arc cheap manufacturers
of stockings, 117; the diminution of, in England, considered, 226.
[Cotton, most valuable vegetable production of the West Indies, 527; bales of,
exhibited by Columbus, 528.]
Gotten manufacture not practised in Europe in 1492, 527-8.]
Country, the charms of, attract capital, 358.]
Country gentlemen, imposed on by the arguments of merchants, 402; imitated
manufacturers, 429.]
[Courts, see Justice.]
Coward, character of, 739.
Credit, [of a person does not depend on his trade, 105; might supply the place of
money, 405;] see Paper-money.
Creoles, 535, 536.]
Cromwell, 563, 667.]
Crown lands should be sold, 776.]
Crusades to the Holy Land, favourable to the revival of commerce, 380.
INDEX
923
Cruttenden East Indiaman, 708 ]
Cuba, 168, 556.]
Cura^oa, 537.]
Curate, 130.]
Currency of states, remarks on, 446.
[Custom-house books untrustworthy, 442.]
Customs, the motives and tendency of drawbacks from the duties of, 466; the
revenue of the^ customs increased, by drawbacks, 470; occasion of first im-
posing the duties of, 69 r; origin of those duties, 829; three ancient branches
of, 830; drawbacks of, 831; are regulated according to the mercantile sys-
tem, 832; frauds practised to obtain drawbacks and bounties, the duties
of, in many instances, uncertain, 834; improvement of, suggested, 834;
computation of the expence of collecting them, 847.
[Cyder, tax on, 840.]
[Cyprus, 94.]
[Daedalian wings of paper money, 305.]
Dairy, the business of, generally carried on as a save-all, 226; circumstances which
impede or promote the attention to it, 226-7; English and Scotch dairies, ib.
[Daniel, Gabriel, quoted, 377.]
[Dantzig, 190, 443.] ^
Danube, the navigation of that river why of little use to the interior parts of the
country from whence it flows, 21.
[Darien, 527.]
[Dauphin6, 805.]
Davenant, Dr., [quoted, 77;] his objections to the transferring the duties on beer
to the malt, considered, 842.
[Dear years enable masters to make better bargains with servants, 83.]
Dearths, never caused by combinations among the dealers in corn, but by some
general calamity, 492; the free exercise of the corn trade the best palliative
against the inconveniences of a dearth, 499; com dealers the best friends to
* the people at such seasons, 500.
[Debasement of coinage practised ever3rwhere, 27.]
Debts, public, [efltect of, on annual produce, to be treated in fi[fth book, lx; paid
by debasing the coin, 27 ]
[Not the cause of British prosperity, 508; interest on, not subject to the
land tax, 774;] the origin of, traced, 861; are accelerated by the expences at-
tending war, 861; account of the unfunded debt of Great Britain, 864; the
funded debt, 864-5; aggregate and general funds, 867; sinking fund, 868,
873; annuities for terms of years, and for lives, 868; the reduction of, during
peace, bears no proportion to its accumulation during war, 873-4; the plea
of the interest being no burden to the nation, considered, 879; are seldom
fairly paid when accumulated to a certain degree, 882; might easily be dis-
charged, by extending the British system of taxation over all the provinces
of the empire, 886; Ireland and America ought to contribute to discharge
the public debts of Britain, 896.
Decker, Sir Matthew, [quoted, 480, 563;] his observation on the accumulation of
taxes, 824; his proposal for transferring all taxes to the consumer, by annual
payments, considered, 828; [quoted, 889.]
[Defence much more important than opulence, 431.]
|De Lange, quoted, 644.]
Demand, [difference between absolute and effective, 56; regulates multiplication
of human species, 80;] though the increase of, may at first raise the price of
goods, it never fails to reduce it afterward, 706.
[Democritus, quoted, 153.]
[Denisart, quoted, 90.]
Denmark [has advanced considerably in agriculture and manufactures, 202;East
India trade began in i8th century, 204; James I.’s bed came from, 330; East
India trade under an exclusive company, 417.]
924
INDEX
[No gold, silver or diamond mines in colonies of, 531; attempts at settle-
ment in America in 17th century, 536;] account of the settlements of, in the
West Indies, 537; [stunted colonies with rule of exclusive company, 542;
without an exclusive company would never have sent a ship to East Indies,
596; would have lost nothing thereby, 597; excluded from Eastland Com-
pany’s monopoly, 693; Reformation in, 758; levies transit duty on the
Sound, 846.]
[^Dlpenses annuelles,’ ‘foncites’ and 'primitives’ distinguished, 629.]
[Dercyllidas, quoted, 414.]
[Desert (Sahara), 525.]
Diamonds, the mines of, not always worth working for, 172-3; power in price in
India than in Europe, 205-6.]
Didactron of Isocrates, 133.]
Dignity of the sovereign, expense of, 766.]
Diocletian, 665.]
Diogenes sent on an embassy, 134.]
Diomede, his armour cost nine oxen, 23.]
Dion Cassius, quoted, 810.]
Dionysius of Halicarnassus, quoted, 732.]
Directors of companies inefficient managers, 700.] ^
Discipline, the great importance of, in war, 661-2; instances, 663 &c.
Diseases, peculiar, of different trades, 82.]
Dissenters, learned but not so popular as methodists, 741.]
Distribution, subject of part of first book, Iviii, 3; prices and produce distributed
between wages, profit and rent, 52, 248; of wealth more unequal in France
than America, 463.]
Diversions, public, their political use, 748.
[Division of labour, 3-22; gives occasion to exchange and money, 22, 28; in the
original state of things would have augmented wages, 64; is promoted by the
interest of owners of stock, 86; in metal and woollen manufactures, 243-4;
relation to exchange, 259; advantageous to all the persons employed, 356;
promoted by foreign trade, 415, 416; in the trade of war must be introduced
by the state, 659; encouraged by increase of demand, 706.]
Dobbs, Mr., quoted, 702,]
Dog never exchanges, 13.]
Domaine, source of French revenue, 855,]
Donaingo, St. [mines of, 168;] mistaken by Columbus for a part of the East
Indies, 526; its principal productions, ib.; the natives soon stripped of all
their gold, 528-9; historical view of the French colony there, 538.
[Dominica a new field for speculation, 895.]
[Dominicans revived languishing faith, 742.]
Doomsday book, [mentions annual poll taxes paid by towns, 374;] the intention
of that compilation, 786.
Dorians, ancient, where the colonies of, settled, 523.
[Douglass, Dr., quoted, 158, 310.]
[Draco, 612.]
Dramatic exhibitions, the political use of, 748.
Drawbacks, in commerce, explained, 418-9.
The motives to, and tendency of, explained, 466; on wines, currants, and
wrought silks, 467; on tobacco and sugar, ih., on wines, particularly con-
sidered, 468; were originally granted to encourage the carrying trade, 470;
the revenue of the customs increased by them, 470; drawbacks allowed in
favour of the colonies, 550; [given on certain articles formerly subject to
export duties, 831; give rise to fraud, 833; which might be prevented, 836;
deductions from customs revenue, 847.]
Drugs, regulations of their importation and exportation, 622.
[Drummond, Mr., his notes for guineas, 41.]
Drunkenness, the motive to this vice inquired into, 459-60; [condoned by liberal
morality, 746.]
INDEX
92s
Du Cange, quoted, 885.]
Dumfries, 310.]
Dunfermline, 330.]
Dunkirk treated as foreign by France, 852.]
Dupleix, 707.]
Dutch, their settlements in America slow in improvement because under the
government of an exclusive company, 537; their East India trade checked
by monopoly, 596; measures taken by, to secure the monopoly of the spice
trade, 600; see Holland.
[Du Tot, quoted, 302.]
[Du Verney, quoted, 302, 864.]
East India, [native governments did not encourage foreign commerce, but de-
rived opulence from inland navigation, 20; shells used as money, 23;] repre-
sentation of the miserable state of the provinces of, under the English gov-
ernment there, 73; [great fortunes easily acquired there, 94; market for
American silver, 204;] historical view of the European trade with those
countries, ihr, rice countries more populous and rich than corn countries,
205 ; the real price of labour lower in China and Indostan, than in the greater
part of Europe, 206; gold and silver the most profitable commodities to
carry thither, ih.\ the proportional value of gold to silver, how rated there,
21 1 ; [trade of, to Europe, a roundabout trade of consumption, 354; expense
of last French war laid out there, 410, 581 ; richer and better cultivated than
Mexico and Peru, 416; commerce with, less advantage to Europe than that
with America, 417;] great extension of foreign commerce by the discovery
of a passage to, round the cape of (rood Hope, 416; historical review of the
intercourse with, ^17; effect of the annual exportation of silver to, from
Europe, ib.'j [re-exportation of goods from, brings back gold and silver, 442;
goods mentioned, 457, 525, 527.]
[Drawbacks on exportation of goods from, to America, 470, 550; Columbus
tried to find a western passage to, 526, 531; origin of the name, 327; north-
west passage to, 531; Dutch settlements under an exclusive company, 537;
advantages to Europe of the Cape passage, 557, 595-606; its discovery one
of the two most important events in history, 590; countries which trade
directly with, enjoy the show, 591; mercantile regulations concerning trade
with, derange the natural distribution of stock more than others, 595;] the
trade with, chiefly carried on by exclusive companies, ih.] tendency of their
monopolies, 596; [poor countries should not trade with, 596-9; no colonies
there thriving like the American, 599; the Cape the halfway house, 600; see
Indostan, and East India Company.]
East India Company, [oppresses and domineers, 73; servants' profits eat up rent,
97; import tea worth £1,500,000, 205; tea dearer than that of Dutch and
Gottenburg companies, 405; envy of its privileges and consequent argu-
ments as to the trade carried on, 417.]
[Restraints on the rice trade imposed by, caused a famine, 493;] a mono-
poly against the very nation in which it is erected, 595; the operation of such
a company in a poor, and in a rich country, compared, 596; that country
whose capital is not large enough to tend to such a distant trade ought not
to engage in it, 598-9; the mercantile habits of trading companies render
them incapable of consulting their true interests when they become sover-
eigns, 601-2; [their interest as sovereigns that European imports should be
sold cheap and Indian exports dear, and the reverse as merchants, 603;] the
genius of the administration of the English company, ^6.; subordinate prac-
tices of their agents and clerks, 603-4; the bad conduct of agents^ in India
owing to their situation, 605; such an exclusive company a nuisance in
every respect, ih,\ [originally established to maintain forts, 690; exclusive
privilege, 700;] brief review of their history, 704-[ii]; their privileges in^
vaded, 705; a rival company formed, ih.] the two companies united, 706-7;
are infected by the spirit of war and conquest, 707; agreements between the
926
INDEX
company and government, 707-8; interference of government in their terri-
torial administration, 709; and in the direction at home, ib.\ why unfit to
govern a great empire, 710; [may trade after expiration of exclusive privi-
lege, 713;] their sovereign and commercial characters, incompatible, 771,
[Bengal land tax before their domination, 789, 791; a modus converted into
a payment in kind, 791; its advance to government, 866, 873-6;] how the
territorial acquisitions of, might be rendered a source of revenue, 898.
[East India Company, the Dutch, its tea cheaper than that of the English Com-
pany, 405; maliciously injures the English, 705.]^
[East India Company, the French, established to maintain forts, 690 ]
[East India Company, the Gottenburg, its tea cheaper than that of the English
Company, 405.]
[Eastland Company, history of, 692, 693.]
[Ecclesiastical State, taxes on bread, 826; sinking fund created from savings in
interest, 873.]
[Economists, the French. See Oeconomists.j
Edinburgh [land and water traffic from to London, 18; tenpence a day the price
of labour, 75; bankers pay 4 per cent., 90; wages only half what they are in
London, no; lodgings much dearer than in London, 117, 118; new town
contains no Scotch timber, 166; two public banks founded, 281; owing to
cash accounts, merchants have an advantage over those of London, 283;
Rawing and redrawing on London, 294;] its present share of trade owing to
the removal of the court and parliament, 320; [trade with England, 349 ]
Education, the principal cause of the various talents observable in different men,
15; [for a particular employment much be replaced from earnings, loi.]
[Institutions for, 681, 716-40;] those parts of, for which there are no public
institutions, generally the best taught, 721; in universities, a view of, 727; of
travelling for, 728; course of, in the republics of ancient Greece, 728; in an-
cient Rome, 729; the ancient teachers superior to those in modern times,
732; public institutions injurious to good education, 733; inquiry how far
the public ought to attend to the education of the people, 734; the different
opportunities of education in the different ranks of the people, 736; the ad-
vantages of a proper attention in the state to the education of the people,
739-40; [beneficial to the whole society and therefore not unjustly defrayed
by general contribution, 768.]
[Edward VI., coin adulterated under, 885.]
Egypt, the first country in which apiculture and manufactures appear to have
been cultivated [owing to the Nile], 20; [religion bound every man to follow
the occupation of his father, 62; wealth of ancient, 348, 360, 380; disliked
the sea, 348; neglected foreign commerce, 462.]
Agriculture was greatly favoured there, 645; [caste system, ib.; great
works on the Nile, / 5 .;] was long the granary of the Roman empire, 647;
[ancient revenue chiefly land-tax, ih,) two languages, 722; land-tax anciently
20 per cent., 789; good roads, ih.]
Ejectment, action of, in England, when invented, and its operation, 368.
'Elboeuf, 84.]
Eldorado, 530.]
Elections, Countries of, in France, 806.]
Elizabeth, Queen, first to wear stockings in England, 245.]
Empires all mortal, but aim at immortality, 781-2.]
Employments, the advantages and disadvantages of the different kinds of, in the
same neighbourhood, continually tend to equality, 99; the differences or
inequalities among, specified, 100; the constancy or precariousness of, influ-
ences the rate of wages, 103.
[Emulation, pod effects of, even in mean professions, 717; always excited by
competition, 732.]
[Enclosure, where scarce, may be specially profitable, 150.]
[Endowments, bad effect of, on education, 716-33.]
INDEX
927
England, the dates of its several species of coinage, silver, gold, and copper, 39;
why labour is cheaper there, than in North America, 69; the rate of popula-
tion in both countries compared, 70; the produce and labour of, have gradu-
ally increased from the earliest accounts in history, while writers are repre-
senting the country as rapidly declining, 327; enumeration of obstructions
and calamities which the prosperity of the country has surmounted, 328;
circumstances that favour commerce and manufactures, 393; laws in favour
of agriculture, 393-4; why formerly unable to carry on foreign wars of long
duration, 413; why the commerce with France has been subjected to so
many discouragements, 462; foundation of the enmity between these
countries, 463.
Translation of the commercial treaty concluded in 1703, with Portugal,
512-3; inquity into the value of the trade with Portugal, 513-4; might pro-
cure gold without the Portugal trade, 515; consequences of securing the
colony trade by the navigation act, 5:62.
[English Copper Company of London, 715.]
Engrossing, see Forestalling.
[Engrossing of land in ancient times, 361; in colonies, 539.]
Entails, the law of, prevents the division of land by alienation, 361; intention of,
362.
Enumerated commodities, 470, 543-4.]
Ephesus, 533.]
Ephron, 25,]
Epices, the chief part of French judges^ emolument, 678; distributed in propor-
tion to their diligence, ib]
Epictetus, a teacher, 764.]
Epicurus possessed gardens, 731,]
Equality of taxation defined, 777.]
Equipage, 164, 331; American colonies a showy, of the British Empire, 899.]
Equity demands that labourers should be tolerably well fed, &c., 79.]
Esau, 391.]
Eton College prices of corn, 185, 191-2, 199.]
Europe, general review of the several nations of, as to their improvement since
the discovery of America, 202; the two richest countries in, enjoy the great-
est shares of the carrying trade, 354.
Inquiry into the advantages derived by, from the discovery and coloniza-
tion of America, 557; the particular advantages derived by each colonizing
country, 559; and by others which have no colonies, 591.
(Eustatia Island, 537.]
(Euxine, 20.]
Exchange, the operation of, in the commercial intercourse of different countries,
401; the course of, an uncertain criterion of the balance of trade between
two countries, 442; [explanation of ‘at par,^ ‘in favour of' and ‘against,'
442-4;] is generally in favour of those countries which pay in bank money,
against those which pay in common currency, 455.
[Exchequer bills a part of the unfunded debt, 864 J
Excise, the principal objects of, 829; the duties of, more clear and distinct than
the customs, 834; affects only a few articles of the most general consiunp-
tion, 834; [embarrasses the smuggler more than customs, 835;] the excise
scheme of Sir Robert Walpole defended, 837; the excise upon home made
fermented and spirituous liquors, the most productive, 838; expence of
levying excise duties computed, 847; the laws of, more vexatious than those
of the customs, 849-50; [would require alteration if extended to the colonies,
888 .]
[Executioner best paid of all common trades, 100.]
Exercise, military, alteration in, produced by the invention of fire arms, 660.
Expences, private, how they influence the national capital, 329; the advantage
of bestowing them on durable commodities, 329-31.
INDEX
928
[Expilly, Jean Joseph, quoted, 856.]
Export trade, the principles of, explained, 353; when rude produce may be ad-
vantageously exported, even by a foreign capital, 360; why encouraged by
European nations, 417; by what means promoted, 418.
The motives to, and tendency of, drawbacks of duties, 466; the grant of
bounties on, considered, 472; exportation of the materials of manufactures,
review of the restraints and prohibitions of, 612.
Faith, articles of, how regulated by the civil magistrate, 749.
Families, seldom remain on large estates for many generations in commercial
countries, 391.
Famine, see Dearth.
Farmers of land, the several articles that compose their gain, distinguished, 53;
require more knowledge and experience than the generality of manufactur-
ers, 127; in what their capitals consist, 263; the great quantity of productive
labour put into motion by their capitals, 344; artificers necessary to them,
358; their situation better in England than in any other part of Europe, 368;
labour under great disadvantages every where, 370; origin of long leases of
farms, 390; are a class of men least subject to the wretched spirit of mono-
poly, 428.
Were forced, by old statutes, to become the only dealers in com, 495;
could not sell corn cheaper than any other corn merchant, 496; could seldom
sell it so cheap, 497"8,* the culture of land obstructed by this division of their
capitals, 497; the use of corn dealers to the farmers, 498; how they contri-
bute to the annual production of the land, according to the French agricul-
tural system of political oeconomy, 628.
Farmers of the publick revenue, their character, 853-4, 871-2.
Farm-rent paid by boroughs, 374-5, 378 ]
Ferdinand and Isabella, 526.J
Pernambuco, 542, 543.]
Fertile lands cultivated first, 92.]
Fertility, rent of land varies with, 147.]
Feudal government, miserable state of the occupiers of land under, 318; trade
and interest of money under, ib.; feudal chiefs, their power, 362; slaves, their
situation, 364-5; tenures of land, 366; taxation, 370; original poverty and
servile state of the tradesmen in towns, 373; immunities seldom granted but
for valuable considerations, 374; origin of free burghs, 375; the power of the
barons reduced by municipal privileges, 376-7; the cause and effect of an-
cient hospitality, 385; extensive power of the ancient barons, 386-7; was not
established in England until the Norman conquest, ib.; was silently sub-
verted by manufactures and commerce, 388.
Feudal wars, how supported, 656; military exercises not well attended to,
under, 659; standing armies gradually introduced to supply the place of the
feudal militia, 666; account of the casualties or taxes under, 81 1; [merchants
despised and envied, 829;] revenues under, how enjoyed by the great land-
holders, 859.
Fiars, public, in Scotland, [supply evidence of the fall in the price of grain, 76,
240;] the nature of the institution explained, 182.
[Fidei commissa, 363.]
[Fifteenths and tenths resembled the taillej 370.]
Fines for the renewal of leases, the motive for exacting them, and their tendency,
783-
[Finisterre, Cape, 469, 546, 580, 888.]
Fire arms, alteration in the art of war, effected by the invention of, 660, 669; the
invention of, favourable to the extension of civilization, 668-9.
[Fire (i.e. steam) engine, 9.]
[Fire insurance, 108.]
Fish, the component parts of the price of, explained, 51; [case in which rent forms,
a part of their price, 145;] the multiplication of, at market, by human in
INDEX 929
dustry, both limited and uncertain, 235; how an increase of demand raises
the price of fish, 235.
Fisheries, observations on the tonnage bounties granted to, 484; to the herring
fishery, 485; the boat fishery ruined by this bounty, 487.
Flanders, [onions imported from, 78; wool exported to, 162; fine manufacture of
wool, 247; English wool exc^nged for fine cloths of, 380; ancient manufac-
ture of fine cloth, 381; carried on chiefly with English and Spanish wool,
382;] the ancient pmmercial prosperity of, perpetuated by the solid im-
provements of agriculture, 396; [importation of bone lace from, prohibited
434.]
[Industry augmented by colonisation of America, 557; supplies linen to
America, 591.]
Flax, the component parts of the price of, explained, 51.
Fleetwood, bishop, remarks on his Chronicon Preciosum, 182, 184; [quoted, 184,
185, 232.]
[Florence, a Roman colony, 533; paid Lorenzo’s trading debts, 771.]
[Florida, French settlers in, murdered by Spaniards, 536.]
[Flota, the Spanish, 572.]
Flour, the component parts of the price of, explained, 51; [duties on, common,
826.]
[Fontainebleau, 319.]
Food, will always purchase as much labour as it can maintain on the spot, 146;
bread and butchers’ meat compared, 148, 151; is the original source of every
other production, 164; the abundance of, constitutes the principal pait of
the riches of the world, and gives the principal value to many other kinds of
riches, 174.
Forestalling and engrossing, the popular fear of, like the suspicions of witch-
craft, 500.
Forts, when necessary for the protection of commerce, 690.
[Foundling hospitals, high mortality in, 79.]
France [quality and price of corn, silks, hardware and woollens compared with
Poland and England, 6; debasement of coin, 35; ratio of gold to silver, 43;
seignorage of 8 per cent., 45, 518; high rented vineyards, 61; fall in price
of grain since seventeenth century, 76, 198, 240, 474;] fluctuations in the
legal rate of interest for money there, during the course of the present cen-
tury, 90; remarks on the trade and riches of, 91; [market rate of interest
higher than in England, wages lower, richer than Scotland but not progress-
ing so fast, ih,\ carrying trade taken by the Dutch, 91;] the nature of ap-
prenticeships there, 1 21; the propriety of restraining the planting of vine-
yards, examined, 154, 158; [corn carefully cultivated in the wine provinces,
154-5; vineyards need not be envied by Britain, 159;] variations in the price
of grain there, 180; [labouring poor seldom eat butchers’ meat, 187; fall in
price of corn, though exportation of grain was prohibited till 1764, 198, 474;]
the money price of labour has sunk gradually with the money price of corn,
200; [improved since the colonisation of America, 202; silver preponderates
in the coinage of, 213; exports poultry to England, 225; price of pork nearly
equal to that of beef, 225-6;] foundation of the Mississippi scheme, 302;
[corn as cheap as in England though there is little paper money, 309;] little
trade or industry to be found in the parliament towns of, 319-20; [futile
attempt to reduce the rate of interest, 340; lawyers have dressed entails in
the garb of substitutions and fidci commisses, 363;] description of the class
of farmers called metayers, 366; laws relating to the tenure of land, [short-
ness of leases], 369; services formerly exacted beside rent, ih.\ the taille,
what, and its operation in checking the cultivation of land, 370; origin of
the magistrates and councils of cities, 377-8; [wine exchanged for English
wool, 380; wine and brandy for Polish corn, ih.^ breeding of silk worms in-
troduced in reign of Charles IX., 382; allodial ownership preceded the
feudal system, 387; cultivation and improvement inferior to that of Eng-
land, 394-5;] no direct legal encouragement given to agriculture, 395;
930
INDEX
[prohibition of exporting coin, 403; exchange of wine for English hardware
not supposed disadvantageous to England, 408; last war with, cost ninety
millions, 410; Merovingian Kings had treasures, 414; established exclusive
company for East India trade, 417;] ill policy of M, Colbert’s commercial
regulations, 434; French goods heavily taxed in Great Britain, 440; the com-
mercial intercourse between France and England now chiefly carried on by
smugglers, 441; the policy of the commercial restraints between France and
Britain, considered, 441-2; [par of exchange, 442-3, 446;] state of the coinage
there, 445; [invasion of Holland, 452, 453; advantages of trade with, 457;
cheap wine does not cause drunkenness, 459-60; wine discouraged by Eng-
lish in favour of Portugal, 460;] why the commerce with England has been
subjected to discouragements, 462-3; [much more populous and rich than
the American colonies and therefore a better market, 463;] foundation of
the enmity between these countries [France and England], ib.
[England unwilling to carry French goods, 468; no drawback allowed by
England on exportation of French wines to America, 470; scarce ever
necessary to restrain exportation of corn, 507; provisions of Methuen treaty
as to wine and wool, 512, 513; required Portugal to exclude British ships,
515;] remarks concerning the seignorage on coin, 5x8; standard of the gold
coin there, ib,\ [no gold or silver mines in the American colonies, 531; settle-
ments in America, 536-8; plenty of good land there, 538; subject to custom
of Paris, 539; no revenue from colonies, 541 ; policy of establishing exclusive
companies, 542;] the trade of the French colonies, how regulated, 543;
[refining sugar flourishes in colonies, 548;] the government of the colonies
conducted with moderation, 552; the sugar colonies of, better governed,
than those of Britain, 553; [slaves better managed there, ih.; capital accu-
mulated there, 554; industry augmented by colonisation of America, 557;
tobacco dearer than in England, 561; navy, 563; tobacco imports, 569; in-
vasion of England, 571;] the kingdom of, how taxed, 585; the members of
the lea^e, fought more in defence of their own importance, than for any
other cause, 588; [supplies linen to America, 591; East Indian trade now
open, 59 5 ; English import duty on yam, 608; English prohibition of linen
imports, 609; indigo, 610; exclusive trade in gum senega, &c., taken by
England, 622;] the present agricultural system of political oeconomy adopt-
ed by philosophers there, described, 627[-43; type of agricultural country,
632; agriculture and corn trade relieved from restraint owing to the (econo-
mists, 642-3; half or one-third of the population agricultural, 646; veterans
defeated by English standing army, 663; fees in parliaments, 678; cost of
Languedoc canal, 684;] under what direction the funds for the repair of the
roads are placed, 686; general state of the roads, 687; [great roads only at-
tended to, 688; tyranny of the coro^^ 689; South Sea Company ruined by
the slave trade, 703;] the universities bacily governed, 719; remarks on the
management of the parliaments of, 751; measures taken in, to reduce the
power of the clergy, 756; [Reformation, 758; only one professor whose works
are worth reading, 763; treasure of Berne invested in the funds, 765, 772;
the oeconomists, 782; the predial taille, 787, 805;] account of the mode of
rectifying the inequalities of the predial taille in the generality of Montau-
ban, 787; the personal taille e:^lained, 805; the inequalities in, how reme-
died, 806; how the personal taille discourages cultivation, 807-8; the Ving-
tieme, 809; stamp duties and the contrdle, 812-4; [taille charged on worL
men a direct tax on wages, 817;] the capitation tax, how rated, 819; [leather
shoes not necessaries, 822; tobacco taxed fifteen times its value, 823; silk
manufactures could be undersold by English, 837; p6ages, 845;] restraints
upon the interior trade of the country by the local variety of the revenue
laws, 852; the duties on tobacco and salt, how levied, 854; the different
sources of revenue in, 855; how the finances of, might be reformed, ib.; the
French system of taxation compared with that in Britain, 856; [might levy
three times the British revenue, ih.\ billets d*itat at a discount, 864;] the
nature of tontines explained, 870; estimate of the whole national debt of,
INDEX 93 X
ib.] [reason for more of the debt being in annuities than in England, 871;
more wealthy bachelors, ih,\ oppressive public debt, 881; augmentation of
coin, 885.]
[Franciscans revived languishing faith, 742.]
[Frederick of Holstein, 758 ]
[Freedom defined 375.]
[Freedom of trade would supply gold and silver as well as wine, 404; would sup-
ply an agricultural country with artificers and merchants, 635.]
[Fr6zier, quoted, 168-9, 203-4.]
Frugality, generally a predominating principle in human nature, 324.
[Fruit yields greater profit and rent than corn, 152.]
Fuller’s earth, the exportation of, why prohibited, 619.
Funds, British, [Dutch holding in, 91; Bernese treasure partly invested in, 772;]
brief historical view of, 863-4; operation of, politically considered, 876; the
practice of funding, has gradually enfeebled every state that has adopted it,
881.
Fur trade, the first principles of, 162.
[Gabelle, compounded for, 852; one of the great sources of French revenue, 855.]
Gama, Vasco de, the first European who discovered a naval track to the East
Indies, 526.
[Ganges, 20, 327, 646.]
Gardening, the gains from, distinguished into the component parts, 53; not a
profitable employment, 153.
[Garonne, 319.]
[Gassendi, a professor who entered the church, 763.]
Gemelli-Carreri, quoted, 534.
Gems, see Stones.
General fund, in the British finances, explained, 867.
[Geneva, respectable clergy of, 762; eminent men of letters are professors, 763.]
[Gengis Khan, 398.]
Genoa, why corn is dear in the territory of, 190; [shipping encouraged by the
Crusades, 380; small state obliged to use foreign coin, 446; bank of, 447;
Columbus belonged to, 526; tax on bread, 827; enfeebled by debt, 881.]
[Gentlemen, English university education not proper for forming, 727; would be
better educated in the absence of public educational institutions, 733.]
[Gentoo, government of India, 645; religion, 646,]
[Geometry should be taught in parish schools, 737.]
[Georgia, cost of civil establishment, 540; not planted at time of Navigation Act,
[Germany, improved since the discovery of America, 202; nation of, overran
Roman Empire, 361; species of slavery still exists in, 365; purveyance still
exists in, 370; free towns of, 378; expense of last war laid out in, 410, 581;
foreign trade, 441.]
[Linen exported from England to the colonies receives a drawback, 551;
linen eiq^orted to America, 557, 570, 591; drained by the Spanish Flota, 572;
trade with America, 591, 592; could have been conquered by Rome, 665;
justice a source of revenue, 675; just beyond the shepherd stage when Rome
fell 676; Reformation in, 758; eminent men of letters often professors,
763-4*1
[Ghent, 396.]
[Gibraltar, straits of, 19; acquisition of, served to unite the house of Bourbon,
698-9.]
[Gilbert, Baron, quoted, 368.]
Glasgow, [recent rise in the demand for labour, 76;] the trade of, doubled in
fifteen years, by erecting banks there, 281; why a city of greater trade than
Edinburgh, 320,
[Glass grinding company, 715.]
[Glaucus’ armour cost 100 oxen, 23.]
932
INDEX
[Goa, 599.]
[Golconda, 172.]
Gold, not the standard of value in England, 39; its value measured by silver, 40:
reformation of the gold coin, 41, 42; mint price of gold in England, 42; the
working the mines of, in Peru, very unprofitable, 1 70-1; qualities for which
this metal is valued, 172; the proportional value of, to silver, how rated be-
fore and after the discovery of the American mines, 211; is cheaper in the
Spanish market than silver, 213.
Great quantities of, remitted annually from Portugal to England, 513;
why little of it remains in England, 514; is always to be had for its value,
515-
Gold and silver, the prices of, how affected by the increase of the quantity of the
metals, 188; are commodities that naturally seek the best market, 188; are
metals of the least value among the poorest nations, 190; the increase in the
quantity of, by means of wealth and improvement, has no tendency to
diminish their value, 190- 1; the annual consumption of these metals very
considerable, 207; annual importation of, into Spain and Portugal, 208; are
not likely to multiply beyond the demand, 210; the durability of, the cause
of the steadiness of their price, 210; on what circumstances the quantity^ of,
in every particular country, depends, 236; the low value of these metals in a
country, no evidence of its wealth, nor their high value of its poverty, 239;
if not employed at home, will be sent abroad notwithstanding all prohibi-
tions, 323; the reason why European nations have studied to accumulate
these metals, 399; commercial arguments in favour of their e^qportation,
400; these, and all other commodities, are mutually the prices of each other,
404; the quantity of, in every country, regulated by the effectual demand,
404; why the prices of these metals do not fluctuate so much as those of
other commodities, 405; to preserve a due quantity of, in a country, no
proper object of attention for the government, ib.; the accumulated gold
and silver in a country distinguished into three parts, 409; a great quantity
of buUion alternately exported and imported for the purposes of foreign
trade, 41 1-2; annual amount of these metals imported into Spain and Portu-
gal, 412; the importation of, not the principal benefit derived from foreign
trade, 415; the value of, how affected by the discovery of the American
mines, ih.\ and by the passage round the Cape of Good Hope to the East
Indies, 416; effect of the annual exportation of silver to the East Indies, 417;
the commercial means pursued to increase the quantity of these metals in a
country, 418, 440; bullion how received and paid at the bank of Amsterdam,
448; at what prices, *449, note) a trading country without mines, not likely
to be exhausted by an annual exportation of these metals, 459.
The value of, in Spain and Portugal, depreciated by restraining the ex-
portation of them, 478; are not imported for the purposes of plate or coin
but for foreign trade, 516; the search after mines of, the most ruinous of all
projects, 529; are valuable, because scarce, and difficult to be procured,
530 -
Gorgias, evidence of the wealth he acquired by teaching, 133.
[Gottenburg, tea smuggled from, 205; company, 405,]
Government, civil, indispensably necessary for the security of private property,
670; subordination in society, by what means introduced, ih.) inequality of
fortune introduces civil government for its preservation, 674; the adminis-
tration of justice, a source of revenue in early times, ih,) why government
ought not to have the management of turnpikes, 685; nor of other public
works, 689 j [expense of, like that of a great estate, 777; soon learns the art
of draining its subjects’ pockets, 813;] want of parsimony during peace, im-
poses a necessity of contracting debts to carry on a war, 861; must support
a regular administration of justice to cause manufactures and commerce to
flourish, 862; origin of a national debt, 863; progression of public debts, ih.)
war, why generally agreeable to the people, 872.
Governors, political, the greatest spendthrifts in society, 329.
INDEX
933
[Gracchi, 729.]
[Grapes might be grown in Scotland at sufficient expense, 425.]
Grasses, artificial, tend to reduce the price of butcher^s meat, 151.
Graziers, subject to monopolies obtained by manufacturers to their prejudice,
619.
Greece, [ancient, had no word for apprentice, 123; slavery harsher than in the
middle ages, 364; cultivation of com degenerated, 365; citizens consisted of
landed proprietors, 373; opulent and industrious, 380.]
Foreign trade promoted [prohibited] in several of the antient states of,
647; [trade and manufactures carried on by slaves, 648; citizens long served
in war without pay, 656;] militaiy exercises, a part of general education,
658; soldiers not a distinct profession in, 658; [individual military exercises,
660; militias defeated by Macedonian and Roman standing armies, 663-4;
but had defeated Persian militia, 666; just beyond the shepherd stage at the
Trojan war, 676;] course of education in the republics of, 728; the morals of
the Greeks inferior to those of the Romans, [732; sanguinary factions,
729; exercises and elementary education, 730;] schools of the philosophers
and rhetoricians, 730; law no science among the Greeks, 731; courts of
justice, ih.) [abilities of people equal to those of modem nations, 732;] the
martial spirit of the people, how supported, 739; [great men of letters were
teachers, 764; public revenue largely obtained from state lands, 773.]
[Greek clergy turbulent, 750.]
Greek colonies, [reasons for sending them out, 523;] how distinguished from
Roman colonies, 524-5; rapid progress of these colonies, 533; [plenty of good
land, 534; sometimes contributed military force but seldom revenue, 559;
England and America might imitate the tie between mother country and
colony, ih]
Greek language, how introduced as apart of university education, 722-3; philo-
sophy, the three great branches of, 723.
Green glass, tax on, 829.]
Greenland seal fishery, 608; South Sea Company’s whale fisheiy, 703.]
Grenada sugar refinery, 548; new field for speculation, 895.]
Grocer, high profits of, explained, 112.]
Ground rents, great variations of, according to situation, 792; are a more proper
subject of taxation than houses, 795; [tax on the sale of, 813.]
Guastalla, 827.]
Guernsey, 584.]
Guicciardini, quoted, 395 ]
Guienne, 155.]
Guilds, adulterine, 124.]
Guinea coast, 459, 525, 698.]
Guineas, not used in computations, 39; Drummond’s notes for, 41 J
Gum senega, review of the regulations imposed on the trade for, 622, [832].
[Gumilla, 530.]
Gunpowder, great revolution effected in the art of war by the invention of, 661,
668; this invention favourable to the extension of civilization, 669.
Gustavus Vasa, how enabled to establish the reformation in Sweden, 758.
[G3annazium, 658, 729, 738.]
[Hackney coaches and chairs, taxes on, 804.]
[Hale, Lord Chief Justice, quoted, 77.]
[Halifax, 383.]
Hamburgh, [houses of, supported by Bank of England, 304; goods imported
from, paid for by bills on Holland, 443; exchange with, formerly unfavour-
able, 445-6; a small state which must use foreign coin, 446;] agio of the bank
of, explained, 447*
[British colonial monopoly hampers the merchants, 592; type of mercan-
tile state, 632;] sources of the revenue of that city, 769-70, 772; the inhabi-
tants, of, how taxed to the state, 801.
934 INDEX
Hamburgh Company, some account of, 692
Hamilcai, 663.]
Hannibal, 664.]
Hanseatic league, causes that rendered it formidable, 378; why no vestige re-
mains of the wealth of the Hans towns, 395 ]
Harbours, cost of, should be defrayed by a port duty on tonnage of ships, 682.]
Hardware, 408, 458; Birmingham manufacturers buy wine with, 848 ]
Hasdrubal, see Asdrubal.]
Hawkers, tax on, 804 ]
Hawkins, Serjeant, quoted, 613.]
Hazard, capitalist paid for incurring, 48.]
Hearth money, why abolished in England, 797.
Hebrew language not a part of common university education, 722.]
Hebrides, wages in, 76; herring fishery, 486 ]
Hinault, President, quoted, 588.]
Henry VIII. of England, prepares the way for the reformation by shutting out
the authority of the Pope, 758; [adulterated the coin, 885.]
Henry IV. of France, siege of Paris, 588; had a treasure, 861.]
Henry, Prince, 151.]
Heptarchy, 327.]
Herbert, quoted, 180, 198.]
Herring buss bounty, remarks on, 485; fraudulent claims of the bounty, 486;^ the
boat fishery the most natural and profitable, ih.\ account of the British
white-herring fishery, 488; account of the busses fitted out in Scotland, the
amount of their cargoes, and the bounties on them, 901 [-2].
[Hesiod, quoted, 724.]
Hides, the produce of rude countries, commonly carried to a distant market, 228;
price of, in England three centuries ago, 231-2; salted hides inferior to fresh
ones, 233; the price of, how affected by circumstances, in cultivated and in
uncultivated countries, 233.
[Higgling of the market, 31.]
Highlands of Scotland, [could not support a nailer, 18; wages in, 76;] interesting
remarks on the population of, 79; [high mortality of children, ih.\ cattle of,
admitted to England by the Union, 149, 220-2; old families common in,
391;] military character of the Highlanders, 662.
Highways origmally maintained by sk days’ labour, 773.]
[Hippias, lived in splendour, 133; peripatetic, 730.]
[Hispaniola, 229.]
Hobbes, Mr., remarks on his definition of wealth, 31.
Hogs, circumstances which render their flesh cheap or dear, 225.
Holland, [water carriage afforded by the Maese, 20; ratio of silver to gold, 14 to
I, 43;] observations on the riches and trade of the republic of, 91; [richer
than England, wages high, profits low, gained carrying trade of France,
holds large amount in French and English funds, not decaying, ^6.;] not to
follow some business, unfashionable there, 96; [corn chiefly imported, 150;
spices burnt to keep up the price, 158, 491, 600;] cause of the dearness of
corn there, 190; [improved since the discovery of America, 202; expelled the
Portuguese from India, 204, 417; tea smuggled from, 205; houses supported
by Bank of England, 304; operation of carrying trade, 351, 352;] enjoys the
greatest share in the canyng trade of Europe, 354; [farmers not inferior to
those of England, 371; legislature attentive to commerce and manufactures,
393; exchange with, 401; East India Company’s tea smuggled into England,
405; imports lean cattle, 427; Dutch imdertaker of woollen manufacture at
Abbeville, 428;] how the Dutch were excluded from being the carriers to
Great Britain, 430; [supplied other nations with fish, ih.\ bad terms with
England, i6.;] is a country that prospers under the heaviest taxation, 433;
[French wme smuggled, 442; computation of state of credit and debit,
443-4;] account of the bank of Amsterdam, 447; [market price of bullion
INDEX 93S
above the mint price, 449;] this republic derives even its subsistence from
foreign trade, 464.
[Buys English corn cheaper and can sell manufactures cheaper in conse-
quence of the British corn bounty, 480; must carry on herring fishery in
decked vessels, 486; position in regard to the Methuen treaty, 513; no gold,
silver or diamonds in the American colonies, 531; attack on Brazil, 535;
settlements in 17th century, 536; Cura^oa and Eustatia free ports, 537; ex-
clusive company for colonial commerce, 542; naval power in 1660, 563; pos-
sessed New York and New Jersey, ih,\ tobacco imports, 569; linen exported
to America, 570, 591; maintains monopoly of trade to the spice islands, 595;
would send more ships to the East Indies if the trade were free, 596; settle-
ments at the Cape and Batavia the most considerable in Africa and the
East Indies, 599; destructive policy in East Indies, 601, 602; English duty
on yarn, 608; gum senega clandestinely exported from England, 622; t3^e
of mercantile state, 632; subsistence drawn from other countries, 641-2;
great cities the capitals of little republics, 760; respectable clergy, 762;
eminent men of letters often professors, 763-4; monopoly of madder owing
to existence of tithe elsewhere, 789;] tax paid on houses there, 797; [rate of
interest, ih ; 2 per cent, tax on capital paid voluntarily, 803; a tax intended
to fall on capital, 803; servants' tax, 809;] account of the tax upon succes-
sions, 810; stamp duties, 812; [tea and sugar luxuries of the poorest, 823;
taxes on bread and necessaries ruined manufactures, 826-7;] amount of
taxes in, ih.^ 857; [tea taxed by licence to drink, 829; expense of preserving
from the sea, 857;] its prosperity depends on the republican form of govern-
ment, ih.
Holstein, cattle of, exported to Holland, 642 ]
Holy Land, 380.]
Homer, quoted, 23, 676.]
Honoraries from pupils to teachers in colleges, tendency of, to quicken their dili-
gence, 717.
[Hop-garden, high profit of, 152.]
Hose, in the time of Edward IV. how made, 245.
Hospitality, ancient, the cause and effect of, 385, 859.
[Hottentots, 599,]
House, different acceptations of the term in England, and some other countries,
1 1 8, [163]; houses considered as part of the national stock, 264; houses pro-
duce no revenue, 264, 265.
The rent of, distinguished into two parts, 791; operation of a tax upon
house rent, payable by the tenant, 792; house rent the best test of the ten-
ant’s circumstances, 794; proper regulation of a tax on ih.\ how taxed in
Holland, 797; hearth money, ih.; window tax, ih.; [tax on sale of, 813.]
Hudson’s bay company, the nature of their establishment and trade, 701; their
profits not so high as has been reported, 702.
[Hume, quoted, 229, 309, 337, 385, 413, 742-3 ]
[Hungary, Danube little use to, 21; serfs still exist in, 365; industry encouraged
by colonisation of America, 557; mines worked by free men, 648.]
Hunters, war how supported by a nation of, 653; cannot be very numerous, 654;
no established administration of justice needful among them, 669; age the
sole foundation of rank and precedency among, 671; no considerable in-
equality of fortune, or subordination to be found among them, 672; no
hereditary honours in such a society, 673; [minds kept alive by absence of
division of labour, 735.]
Husbandmen, war how supported by a nation of, 655.
Husbandry, see Agriculture.
[Hutchinson, quoted, 893.]
[Hyder Ali, 711.]
Idleness, unfashionable in Holland, 96; [why greater among our ancestors, 319;
prevails where revenue predominates, 321.]
INDEX
936
[Iguana or Ivana, principal animal of St. Domingo, 527.]
Importation, why restraints have been imposed on, with the two kinds of, 418;
how restrained to secure a monopoly of the home market to domestic in-
dustry, 420; the true policy of these restraints doubtful, 420-1; the free im-
portation of foreign manufactures more dangerous than that of raw mate-
rials, 426; how far it may be proper to continue the free importation of
certain foreign goods, 434; how far it may be proper to restore the free im-
portation of goods, after it has been interrupted, 435; of the materials of
manufacture, review of the legal encouragements given to, 607; [statistics
of, untrustworthy, 833.]
Independents, the principles of that sect explained, 745.
India, Gulf of, 21 J
India stock, 605, note 119.]
Indian com, 527.]
Indian seas, 595.]
Indies, see East and West.
Indostan [violent police compels every man to follow the occupation of his
father, 62; country labourers better paid than most artificers, 127; labour-
ers’ real wages less than in Europe, 206; quantity of gold and silver affected
by American mines, 236; treasure commonly buried in, 268; wonderful
accounts of its ancient wealth and cultivation, 348; its wealth obtained
through exportation was in foreign hands, 360; more advanced than Mexico
and Peru, 416; operation of foreign commerce, 437.]
[Vasco de Gama arrived by the Cape in 1497, 526;] the several classes of
people there kept distinct, 645; the natives of, how prevented from under-
taking long sea voyages, 646; [revenue chiefly from land tax, 647; silk ex-
ports to Rome, 648; roads and canals, 688; land tax revenue stimulates the
sovereign’s interest in such works, ib,\ supposed necessity for forts to pro-
tect commerce, 690; silk should be admitted free to Britain, 837; see East
Indies and East India Company.]
Industry, the different kinds of, seldom dealt impartially with by any nation,
lix; the species of, frequently local, 17; naturally suited to the demand, 58;
is increased by the liberal reward of labour, 81; how affected by seasons of
plenty and scarcity, 82; is more advantageously exerted in towns than in the
country, 125; the average produce of, always suited to the average con-
sumption, 186-7; is promoted by the circulation of paper money, 278; three
requisites to putting industry in motion, 279-80; how the general character
of nations is estimated by, 319; and idleness, the proportion between, how
regulated, 320; is employed for subsistence, before it extends to con-
veniences and luxury, 357; whether the general industry of a society, is
promoted by commercial restraints on importation, 420-1; private interest
naturally points to that employinent most advantageous to the society, 42 1 ;
but without intending or knowing it, 423; legal regulations of private in-
dustry, dangerous assumptions of power, ib.\ domestic industry ought not
to be employed on what can be purchased cheaper from abroad, 424; of the
society, can augment only in proportion as its capital augments, 425; when
it may be necessary to impose some burden upon foreign industry, to favour
that at home, 429-30; the free exercise of industry ought to be allowed to
all, 437*
The natural effort of every individual to better his condition, will, if un-
restrained, result in the prosperity of the society, 508.
[Infanticide, Iviii; in China, 72.]
Insurance, from fire, and sea risks, the nature and profits of, examined, 108; the
trade of insurance may be successfully carried on by a joint stock company,
714.
Interest, landed, monied, and trading, distinguished, 334; [public, promoted by
private, 423, 594.]
Interest for the use of money, the foundation of that allowance explained, 52;
[varies with the rate of profit, 88;] historical view of the alterations of, in
INDEX
937
England, and other countries, 88[-98]; remarks on the high rates of, in
Bengal, 94; and in China, 95; may be raised by defective laws, independent
on the influence of wealth or poverty, ihr, the lowest ordinary rate of, must
somewhat more than compensate occasional losses, ih.) the common relative
proportion between interest and mercantile profits inquired into, 97; [stock
lent at, 333-40;] was not lowered in consequence of the discovery of the
American mines, 337; how the legal rate of, ought to be fixed, 339; conse-
quences of its being fixed too high or too low, 339-40; the market rate of,
regulates the price of land, 340.
[As a source of public revenue, 771; nominally subject to British land
tax, 774;] whether a proper object of taxation, 800; [fall in the rate of, 801,
868 .]
[Invisible hand, 423.]
[lonians colonised Asia Minor and the .assage to the East round the
Cape of Good Hope, 525-6; [settlement of Brazil, 535-6; exclusive companies
recently established for Pernambuco and Marannon, 542; prohibition of
import of tobacco except from the colonies, 549; banished Jews to Brazil,
555;] lost its manufactures by acquiring rich and fertile colonies, 575;
[trade with East Indies open, 595; and none the less prosperous, 598, 599;
African colonies resemble the American, though there is no exclusive com-
pany, 599; summary of effect of Methuen treaty, 625-6; slave trade un-
profitable, 703; see Spain and Portugal.]
[Postlethwayt, quoted, 302, note 24; 874.]
Post-office, [affords a revenue to the state, 682;] a mercantile project well calcu-
lated for being managed by a government, 770.
Potatoes, remarks on, as an article of food, 160; culture, and great produce of,
ih.\ the difficulty of preserving them the great obstacle to cultivating them
for general diet, 161.
[Potosi, mines of, 148, 191, 201,]
[Pots and pans, 408.]
Poultry, the cause of their cheapness, 224; is a more important article of rural
oeconomy in France than in England, 225.
[Pounds, various, 26-7; accounts kept in, 39.]
952 INDEX
Poverty sometimes urges nations to inhuman customs, Iviii; is no check to the
production of chhdren, 79; but very unfavourable to raising them, 79.
Pragmatic sanction in France, the object of, 756; is followed by the concordat,
ib.
Preferments, ecclesiastical, the means by which a national clergy ought to be
managed by the civil magistrate, 750; alterations in the mode of electing to
them, 751-2, 756.
Presbyterian church government, the nature of, described, 761; character of the
clergy of, 762, 765; [countries exempt from tithe, 789.]
[Present State of the Nation, quoted, 4ri.]
[Press-gang, 115.]
Prices, [natural, real, market, and nominal, 28, 30-46, 55-63;] real and nonainal,
of commodities distinguished, 33-4; [of labour, 35, 146, 200;] money price of
goods explained, 46; [component parts of, 47-54;] for land enters into
the price of the greater part of all commodities, 49; the component parts of
the prices of goods explained, 50; natural and market prices distinguished,
and how governed, 55-6, [62,] 86.
Though raised at first by an increase of demand, are always reduced by it
in the result, 706; [of necessaries and labour, 815-6, 836,]
Primogeniture, origin and motive of the law of succession by, under the feudal
government, 361-2; is contrary to the real interests of families, 362; [ob-
structs improvement in Europe, 392; none in Pennsylvania, and restricted
in New England, 539.]
Princes, why not well calculated to manage mercantile projects for the sake of a
revenue, 771.
Prodigality, the natural tendency of, both to the individual and to the public,
322; prodigal men enemies to their country, 324.
Produce of land and labour, the source of all revenue, 315-6; the value of, how to
be increased, 326.
[Production, consumption the sole object of, 625.]
[Productive, and useful labourers proportioned to stock, Iviii; and tmproduc-
tive, 314-32.]
Professors in universities, circumstances which determine their merit, 762-3.
Profit, [must be obtained by the undertaker who hazards his stock, 48; not mere-
ly a different name for wages of direction, ih.\ one of three original sources of
revenue, 52;] the various articles of gain that pass under the common idea
of, 53; [sometimes included in wages, «&.;] an average rate of, in all countries,
55; [how affected by fluctuations of prices, 59; name usually given to gains
resulting from possession of secrets in trade, 60; raised by monopolies and
corporation laws, 61; depends on price of provisions, 83; general theory of,
87-98;] averages of, extremely difficult to ascertain, 87; interest of money
the best standard of, 88; the diminution of, a natural consequence of pros-
perity, gi; clear and gross profit, distin^ished, 96; the nature of the highest
ordinary rate of, defined, ib.; double interest, deemed in Great Britain a
reasonable mercantile profit, 97; in thriving countries, low profit may com-
pensate the high wages of labour, ib.; the operation of high profits and high
wages, compared, ib.; [inequalities of, between different occupations, 99-
143;] compensates inconveniencies and disgrace, loi; of stock, how affected,
[by the five circumstances which cause differences of wages,] ib.; large
profits must be made from small capitals, 1 12; why goods are cheaper in the
metropolis than in country villages, ib.; great fortunes more frequently
made by trade in large towns than in small ones, 113; [high, a cause of high
prices, 146; a charge which comes before rent, 146; lower in remote country
than in great towns, 147;] is naturally low in rich, and high in poor coun-
tries, 249-50; how that of the different classes of traders is raised, 343;
private, the sole motive of employing capitals in any branch of business,
355 .
[Kept up in British trade by the colonial monopoly, 564; high, subjects a
country to a disadvantage in trade, ib.; and discourages improvement of
INDEX
953
land, 577;] when raised by monopolies, encourages luxury, [high rate every-
where destroys parsimony,] 578; small republics derive considerable revenue
from, 769; one of three sources of private revenue, 777; surplus over interest
not taxable, 798; taxes on, 798-803; taxes on particular, 803-9; custom
duties originally intended as a tax on, 829.]
[Progressive state best for the body of the people, 81.]
Projects, unsuccessful, in arts, injurious to a country, 324.
Property, [of a man in his own labour, the foundation of all other, 121; sacred
rights of, 170;] passions which prompt mankind to the invasion of, 670; civil
government necessary for the protection of, ih.\ wealth a source of author-
ity, 671, 673.
Proprietor, a great, seldom a great improver, 363.]
Prosperity, does not usually last more than 200 years, 394.]
Prostitutes, Irish, in London, 161.]
Protagoras, lived in splendour, 133; went from place to place, 730.]
Provence, taille in, 805.]
Proverbs of Solomon, 724.]
Provisions, how far the variations in the price of, affect labour and industry, 74,
83, 85; whether cheaper in the metropolis, or in country villages, 1 13; the
prices of, better regulated by competition than by law, 142; [parliamentary
inquiry into the causes of the high price of, 151;] a rise in the prices of, must
be uniform, to shew that it proceeds from a depreciation of the value of
silver, 240; [price of, and wages, 815-6, 836.]
Provisors, object of the statute of, in England, 756.
Prussia, [king of, accumulates treasure, 410, 861; acknowledged superiority of
troops, 661; troops veteran, 666;] mode of assessing the land-tax there, 786;
[survey and valuation, 786-7, 887.]
[Public good, not much good done by those who affect to trade for the, 423.]
[Public schools, the English, less corrupted than the universities, 721.]
Public works and institutions, how to be maintained, 681; equity of tolls for pas-
sage over roads, bridges, and canals, 683; why government ought not to
have the management of turnpikes, 685; nor of other public works, 689;
[deficiencies in the receipts from, must be made good from taxes, 768; six
days’ labour originally sufficient for all, 773.]
[Puritans founded New England, 555.]
Purveyance, a service still exacted in most parts of Europe, 370.
[Pythagoras, school of, established in a colony, 533.]
Quakers of Pennsylvania, inference from their resolution to emancipate all their
negro slaves, 366; [established the colony, 555; in a majority there, 745.]
Quesnai, M., view of his agricultural system of political oeconomy, 637; his
doctrine generally subscribed to, 643
[Quintilian, a teacher, 764.]
Quito, populousness of that city, 534.
Racked rent takes part of the farmer’s share, 630.]
Raleigh, his dream of an Eldorado, 530.]
Ramazzini, his book on the diseases of workmen, 82.]
Rates, the Book of, 505, 623, 831, 834.]
Raynal, quoted, 209.]
Recoinage, of gold, 41; of silver, under William III., 195, 864.]
Recovery, common, 368.]
Reformateur, Lc, quoted, 827.]
Reformation, rapid progress of the doctrines of, in Gerniany, 757; in Sweden and
Switzerland, 758; in England and Scotland, ih.) origin of the Lutheran and
Calvinistic sects, 759.
[Reformers found Greek and Hebrew versions more favourable than the Latin,
722 - 3 -]
954
INDEX
[Regiam majestatem, quoted, 183.]
[Registration, duties on, 810, 813, 814.]
Regulated companies, see Companies.
[Relief, a feudal casualty once a source of public revenue, 81 1.]
Religion, [corn laws resemble laws respecting, 507,* instruction in, 740-66;] the
object of instruction in, 740; advantage the teachers of a new religion enjoy
over those of one that is established, ib.\ origin of persecution for heretical
opinions, 741; how the zeal of the inferior clergy of the church of Rome is
kept alive, ib.) utility of ecclesiastical establishments, 743; how united with
the civil power, 744; [instruction in, may be paid from taxes without in-
justice, 768.]
Rent, reserved, ought not to consist of money, 34; but of corn, 35; of land,
constitutes a third part of the price of most lands of goods, 49; [sometimes
confounded with profit, 53;] an average rate of, in all countries, and how
regulated, 55; [less affected by fluctuations of prices than wages and profit,
59; of particular vineyards, 61; causes which regulate, 63;] makes the first
deduction from the produce of labour employed upon land, 65; [depends on
price of provisions, 83; highest rate of profit eats up, 97;] the terms of, how
adjusted between landlord and tenant, 144; is sometimes demanded for
what is altogether incapable of human improvement, 145; is paid for, and
produced by, land in almost all situations, 146; [varies with fertility, 147; of
rice lands, 159;] the general proportion paid for coal mines, 167; and metal
mines, 168; mines of precious stones frequently yield no rent, 172; [rent of
mines in proportion to relative, but land rent in proportion to absolute
fertility, 173;] how paid in ancient times, 181; is raised, either directly or
indirectly, by every mprovement in the circumstances of society, 247;
gross and neat rent distinguished, 270; how raised and paid under feudal
government, 318; present average proportion of, compared with the produce
of the land, w. ^
[In Great Britain, estimate of the amount of, 775; one third of the pro-
duce, ih.; revenue of the people not proportioned to, i6.;] of houses distin-
guished into two parts, 791; difference between rent of houses, and rent of
land, 794; rent of a house the best estimate of a tenant’s circumstances, ih,}
[house-rent taxable under the land-tax, 796.]
Rents (French rentes), 809.]
Representation unknown in ancient times, 588.]
Republican government supports the grandeur of Holland, 857-8.]
Retainers, under the feudal system of government, described, 385[-9i]; how the
connexion between them and their lords was broken, 388.
[Retaliation, whm expedient, 434.]
Revenue, iJbe original sources of, pointed out, 52; [777, 879;] of a country, of
what it consists, 270; the neat revenue of a society diminished by supporting
a circulating stock of money, 273; money no part of revenue, 274; is not to
be computed in money, but in what money will purchase, 275; how pro-
duced, and how appropriated, in the first instance, 316; produce of land, ih.;
produce of manufactures, ih,} must always replace capital, ih,} the propor-
tion between revenue and capital, regulates the proportion between idleness
and industry, 320-1; both the savings and the spendings of, annually con-
sumed, 321; of every society, equal to the exchangeable value of the whole
produce of its industry, 423.
Of the customs, increased by drawbacks, 470; [severity of the laws for the
security of the, 612;] why government ought not to take the management of
turnpikes, to derive a revenue from them, 685; public works of a local
nature, always better maintained by provincial revenues, than by the
general revenue of the state, 689; the abuses in provincial revenues trifling,
when compared with those in the revenue of a great empire, ih.} the greater
the revenue of the church, the smaller must be that of the state, 765; the
revenue of the state ought to be raised proportionably from the whole
society, 767; local expences ought to be defrayed by a local revenue, ih •
INDEX
955
inquiry into the sources of public revenue, 769; of the republic of Ham-
burgh, 769-70, 772; whether the government of Britain could undertake the
management of the Bank, to derive a revenue from it, 770; the Post-offi.ce a
mercantile project well calculated for being managed by government, ih . ;
princes not well qualified to improve their fortunes by trade, 771; the
English East India Company good traders before they became sovereigns,
but each character now spoils the other, 771; expedient of the government
of Pennsylvania to raise money, 772; rent of land, the most permanent fund,
773; feudal revenues, ih.; Great Britain, 774; revenue from land propor-
tioned, not to the rent, but to the produce, 775; reasons for selling the crown
lands, 775-6; an improved land-tax suggested, 782; the nature and effect of
tythes explained, 788; why a revenue cannot be raised in kind, 790; when
raised in money, how affected by different modes of valuation, ih.; a pro-
portionable tax on houses, the best source of revenue, 794; remedies for the
diminution of, according to their causes, 835; bad effects of farming out
public revenues, 853; the different sources of revenue in France, 855; how
expended, in the rude state of society, 859.
Revolution, the, of 1688, 864.]
Rhine, 20.]
Rhode Island expense of civil establishment, 540; representatives elected the
governor, 552.]
Rice, a very productive article of cultivation, 159; requires a soil unfit for raising
any other kind of food, ih.; rice countries more populous than corn coun-
tries, 205.
Riches, [measured by the necessaries, conveniences and amusements which can
be enjoyed, 30;] the chief enjoyment of, consists in the parade of, 172.
Rich man consumes no more food than the poor, 164.]
Riding school ineflficient because generally a public institution, 721.]
Riga. 35 °, 443J
Riquet, Languedoc Canal entmsted to, 684 ]
Risk, instances of the inattention mankind pay to it, 108.
[Rivers, earliest improvements of industry on the banks of, 18; benefit remote
parts of the country, 147.]
Roads, good, the public advantages of, 147; [anciently maintained by compul-
soiy labour, 370,]
How to be made and maintained, 682[-9;] the maintenance of, why im-
proper to be trusted to private interest, 684; general state of, in France, 687;
in China, 687-8; [may not unjustly be paid for from taxes, 767; anciently
maintained by six days’ labour, 773; good in ancient Bengal and Egypt,
7S9-]
[Robert Capet, 756.]
[Roman Catholic, see Rome, modern.]
[Roman law developed with respect to precedent, 732; position of emancipated
children, 81 1.]
Romans [had no coined money till the time of Servius Tullius, 24, 26;] why
copper became the standard of value among them, 39; [incorporated trades,
1 19; no apprentices, 122-3; Athenian philosophers, ambassadors to, 134;
corn chiefly imported, 150; cultivation discouraged by low price of corn, ih.;
silver mines worked by, 181;] the extravagant prices paid by them for
certain luxuries for the table, accounted for, 218; the value of silver higher
among them than at the present time, ib.; [fall of Western empire, 361; no
right of primogeniture, ih.; entails unknown among, 363; slavery harsher
than in mediaeval Europe, 364.]
[Colonisation by, 523-5;] the republic of, founded on a division of land
among the citizens, 523-4; the agrarian law only executed upon one or two
occasions, ih.; [cultivation by slaves, ih.i\ how the citizens who had no land,
subsisted, ih.; distinction between the Roman and Greek colonies, 525; the
improvement of the former slower than that of the latter, 533; [dependency
of the former on the mother state, 534; slaves more protected under the
956 INDEX
emperors, 554; colonies furnished both men and money, 559;] origin of the
social war, 587; the republic ruined by extending the privilege of Roman
citizens to the greater part of the inhabitants of Italy, [587,] 589; [wisdom of
the senate, 606; discouraged manufactures and foreign trade, 647; used
slave labour in manufactures, 648; the pound, 649;] when contributions
were first raised to maintain those who went to the wars, 656; [Campus
Martius, 658;] soldiers not a distinct profession there, ib.; [elevation of, the
second great historical revolution, 66 $) Carthaginian wars, 663-4;] improve-
ment of the Roman armies by discipline, 664; how that discipline was lost,
665; the fall of the Western empire, how effected, 666; [abandonment of
personal administration of justice by the consul, 680;] remarks on the edu-
cation of the ancient Romans, 729; their morals superior to those of the
Greeks, 729; [teachers of militaiy exercises not paid by the state, ib., 738;]
state of law and forms of justice, 731; [equal to any modern people in
ability, 732;] the martial spirit of the people, how supported, 738; [eminent
men of letters were teachers, 764; comfortable without linen, 821;] great
reductions of the coin practised by, at particular exigencies, 883-4; [poor
people in debt to the rich and demanded new tables, 884.]
Rome, modern [i.e. church of, pay of priests in England, 130; claims merit as to
the emancipation of serfs, 367.]
[Clergy obliged to study Greek and Hebrew, 722-3; demanded persecu-
tion of Protestants, 741;] how the zeal of the inferior clergy of, is kept alive,
ib.; [turbulent, 750;] the clergy of, one great spiritual army dispersed in
different quarters over Europe, 752; their power during the feudal monkish
ages similar to that of the temporal barons, 753; [most formidable combina-
tion against civil government, 754;] their power how reduced, 755; [richest
church in Christendom, 763.]
[Rome, modern city of, residence of a court and consequently idle, 319.]
Rouen, [statistics of silk and linen manufacture in the generality of, 84;] why a
town of great trade [though the seat of a parliament], 319.
Rouge, Cape, 696, 697, 698.]
Royal Caroline, 703.]
Royal Exchange Assurance Company, 714-5.]
Ruddiman, Mr., remarks on his account of the ancient price of wheat in Scot-
land, 183; [quoted, 213, 281.]
[Ruffhead, his edition of the statutes, 183.]
[Rum, and molasses expected to defray cost of sugar cultivation, 157; foreign
article of common use, 834; excise duties, 835; proper subject of taxation,
889, 892,]
Russia, [improvement since the discovery of America, 202; serfs still exist in,
365; peace with Turkey, 573; fleet in the Archipelago, ib,; soldiers not in-
ferior to the Prussian, 666;] was civilized under Peter I. by a standing army,
667; [early embassies to, 690.]
[Russian Company, 692-3.]
Sailors, why no sensible inconvenience felt by the great numbers disbanded at
the close of a war, 436.
[Saint Christopher island, half in possession of the French in 1660, 564; com-
pletely cultivated, 895.]
[Saint Domingo, mines abandoned, 168; Columbus in, 526, 528; stock accumu-
lated in, 554.]
^Saint Jameses Palace, land-tax on, 774.]
Saint-Maur, Dupr6 de, quoted, 180, 185, 198, 240.]
5aint Thomas island, Danish settlement, 537.]
Saint Vincent, new field for speculation, 895.]
Sallee, 697.]
Salmon fishery pays a rent, 51.]
Salt [currency in Abyssinia, 23; dearer on account of the tax, 78;] account of
foreign salt imported into Scotland, and of Scots salt delivered duty free,
INDEX 957
for the fishery, [485;] Append., 903; is an object of heavy taxation every-
where, 825; the collection of the duty on, expensive, 847; [the French tax
on, 852, 854.]
Sandi, quoted, 381.]
San Domingo, see Saint Domingo.]
Santa Cruz island, Danish settlement, 537,]
Saracens, 380.]
Sardinia, the land-tax how assessed there, 787, [805, 887.]
[Savoy surveyed, 786.]
Saxon lords, their authority and jurisdiction as great before conquest, as those of
the Normans were afterward, 387.
[Scandinavians, the ancient, practised music and dancing, 730.]
[Scarcity, effect of years of, on industry and wages, 82-3, 85-6 ]
[Scholarships, effect of, on earnings of labour, 129, 132.]
Schools, [English public, 721;] parochial, observations on, 737; [charity, ih]
Science, is the great antidote to the poison of enthusiasm and superstition, 748.
Scipio, his Spanish militia, rendered superior to the Carthaginian militia by
discipline and service, 664.
Scotland, [in the Highlands every farmer a butcher, etc., 17; village in, where
nails are currency, 23; reduction of value of the coin, 27, 35; wages in low
country vary less than in England, 75;] compared with England, as to the
prices of labour and provisions, 75-6; [grain dearer in 17th century, 76;
wages in 17th century sd. to 6d., ih.-, wages in different parts, ib.'] remarks
on the population of the Highlands, 79; [workmen less diligent than in Eng-
land, 81; linen manufacture, 84;] the market rate of interest, higher than
the legal rate, 90; [wages lower than in England, ih.', much poorer and ad-
vancing less rapidly than England, ib., 189; wages of colliers and common
labourers compared, 104;] the situation of cottagers there, described, 116;
[knitted stockings in many places cheaper than woven, 117; wages of spin-
ners, i6.;] apprenticeships and corporations, 12 1; [church, ^ respectable
though poorly paid, 13 1; easy migration of labour, 140; assize of bread
could not be fixed there, 142; incorporation of bakers in, ih.', rent for kelp
shores, 145; desert moors yield rent, 146; union with, opened English mar-
ket to cattle of, 149, 220-2; high rent of enclosed land, 150; land could not be
cultivated by factors, 157; oatmeal said to be better food than wheat flour,
160;] the common people of, why neither so strong nor so handsome as the
same class in England, ih.', [stone quarry affords no rent in some parts, 163;
bark the only part of wood sent to market in parts of the Highlands, 163;
rent for quarries of London paving stones, ih.', many coal mines yield no
rent, 165; sixth part a common rent of fertile lead mines, 168; conversion
prices, 181; wages higher than in France, 187; price of corn in England and
Scotland compared, 189;] cause of the frequent emigrations from, 189; [pro-
portion of gold and silver in the coinage, 212-3; price of cattle affected by
the union, 220-2;] progress of agriculture there before the union with Eng-
land, 222; present obstructions to better husbandry, ih.', [dairy farming,
227; calves formerly killed young, 232;] the price of wool reduced by the
union, 234, 616; operation of the several banking companies established
there, 281 [-301;] amount of the circulating money there before the union,
281; amount of the present circulating cash, 282; course of dealings in the
Scots bank, ib.', [cash accounts do not exclude bill discounting, 284; twenty-
shilling notes lowest paper money current, ih.'^ difficulties occasioned by
these banks issuing too much paper, 286-7; necessary caution for some time
observed by the banks in giving credit to their customers, with the good
effects of it, 289; [limit of paper money reached twenty-five years ago, 292;]
the scheme of drawing and redrawing adopted by traders, 293; its pernicious
tendency explained, 294; history of the Ayr bank, 297; Mr. Law*s scheme to
improve the country, 301; [issue of small notes extends the paper circulation
to retail trade, 306; and banishes gold and silver, 307;] the prices of goods in,
not altered by paper currency, 308-9; effect of the optional clauses in their
958
INDEX
notes, 309; [union caused nobility to cease residing in Edinburgh, 320; wool
manufactured in Yorkshire, 346; trade with London, 349; one fifth or one
third of the land entailed, 363; steel bow tenants, 367; long leases, 369; no
leasehold carries a parliamentary vote, ih.\ hospitality in the Highlands,
386; small rent for Highland farms, ihr, territorial jurisdictions in the High-
lands, 387; prohibition of ejsport of gold and silver, 400; manufacturing
wine in, 425; mountains destined for breeding grounds, 427 ]
[Herring fishery, 485-8, and Appendix; salt duty, 485; herrings an im-
portant part of food of common people, 487; English bounty on hemp im-
ported from, 609-10; judges’ salary from interest of money, 680; parish
schools, 737;] cause of the speedy establishment of the reformation there,
758; the disorders attending popular elections of the clergy there, occasion
the right of patronage to be established, 761; [respectable clergy, 762; emi-
nent men of letters professors, 763-4;] amount of the whole revenue of the
clergy, 765; [excellent character of church, foris-familiated children,
81 1 ; shoes not a necessary of life to women in, 822; linen subject to duty on
importation into England, 866; little malt liquor consumed, 891; more
smuggling than in England, ib.; redundant paper money the consequence of
enterprising spirit, 894; has banished gold and silver in, ib.; less spirit of
party than in England, 898.]
[Scythia, barbarous because inland, 20; overran Western Empire, 361; if united
could conquer Europe and Asia, 655; militia of Mithridates, 664-5; military
organisation preserved after fall of Western Empire, 666; administration of
justice a source of revenue, 675; not much beyond shepherd stage at fall of
Western Empire, 676.]
[Sea-coast, earlier civilisation of, 18.]
Sea service and military service by land, compared, 109.
[Secrets in trade, 60.]
Sects in religion, the more numerous, the better for society, 745; why they gener-
ally profess the austere system of morality, 746.
[Seignorage, none in England, 42, 286, 445; but some delay equivalent to one,
44; would increase the superiority of coin above bullion, 45; 8 per cent, in
France, 45, 445, 518; diminishes or removes the profit on melting new coin,
518-22.]
[Seius, 219.]
Self-love the governing principle in the intercourse of human society, 14.
[Senegal, 622, 697, 83 2. J
Servants, menial, distinguished from hired workmen, 314; the various orders of
men, who rank in the former class, in reference to their labours, 315; their
labour unproductive, 639; [see Menservants and Maidservants.]
[Servius Tullius, 24, 26.]
[Sestertius, silver coin estimated in copper, 39.]
Settlements of the poor, brief review of the English laws relating to, i35[-4i;] the
removals of the poor, a violation of natural liberty, 141; the law of, ought to
be repealed, 437.
(Seymour, 330.]
Sheep, frequently killed in Spain, for the sake of the fleece and the tallow, 229;
severe laws against the exportation of them and their wool, 612-3.
[Sheffield produces necessary articles, 115; master cutlers only allowed one ap-
prentice, 119; reduction in price of goods, 243* manufactures grown up
naturally, 383 ]
[Shells, currency on coast of India, 23.]
Shepherds, war how supported by a nation of, 653-4; [much leisure among, 659;]
inequality of fortune among, the source of great authority, 672; birth and
family highly honoured in nations of shepherds, 673; inequality of fortune
first began to take place in the age of shepherds, 674; and introduced civil
government, tb,; [every man exerts his capacity among, 735 ]
Shetland, [wages and price of stockings, 117;] how rents are estimated and i)aid
there, 145; [herring fishery, 4S6.]
INDEX
959
[Shilling, 26.]
[Shopkeepers, prejudice against, unfounded, 342; nation of, 579; navigation act
inspired by, 580; proposed tax on, 804.]
^Shropshire, 168,]
Siam, Gulf of, 21.]
Siberia barbarous because inland, 20; caravans through, 204.)
Sicily, price of wheat in ancient, 218; silk manufactures imported, 345; Venice
originally imported silk from, 381-2; colonised by Dorians, 523; greatness of
Greek colonies in, 533.]
[Silesia, lawns of, 440; land-tax, 786.]
Silk, [weavers in London allowed only two apprentices, 119;] manufacture, how
transferred from Lucca to Venice, 381 ; [ejqpensive in Greece and Rome, 648;
English manufacturers could undersell French and Italians if duty free, 837.]
Silver, [varies greatly from century to century but not from year to year, 36;
used for purchases of moderate value, 38;] the first standard coinage of the
northern subverters of the Roman empire, 39; its proportional value to gold
regulated by law, 40; is the measure of the value of gold, ih.; mint price of
silver in England, 42; inquiry into the difference between the mint and mar-
ket prices of bullion, 16.; how to preserve the silver coin from being melted
down for profit, 44; the mines of, in Europe, why generally abandoned, 168;
evidences of the small profit they 3deld to proprietors in Peru, ih.\ [seldom
found virgin like gold, and consequences thereof, 171;] qualities for which
this metal is valued, ib.; the most abundant mines of, would add little to the
wealth of the world, 173; but the increase in the quantity of, would depre-
ciate its own value, 176; circumstances that might counteract this effect,
ib.; historical view of the variations in the value of, during the four last
centuries, 176; remarks on its rise in value compared with corn, 180-1; cir-
cumstances that have misled writers in reviewing the value of silver, 181;
corn the best standard for judging of the real value of silver, 187; the price
of, how affected by the increase of quantity, 188; the value of, sunk by the
discovery of the American mines, 19 1; when the reduction of its value from
this cause appears to have been completed, 192; tax paid from the Peruvian
mines to the king of Spain, 201 ; the value of silver kept up by an extension
of the market, 202; is the most profitable commodity that can be sent to
China, 206; the value of, how proportioned to that of gold, before and after
the discovery of the American mines, 21 1; the quantity commonly in the
market in proportion to that of gold, probably greater than their relative
values indicate, 212; [a proper subject of taxation, 214;] the value of, prob-
ably rising, and why, ibr, the opinion of a depreciation of its value, not well
founded, 240.
The real value of, degraded by the bounty on the exportation of corn, 476;
[tax on, in America, 529; has not varied since the imposition of the English
land-tax, 781; not necessary to the Americans, 892-3; see Gold and Silver.]
Sinking fund in the British finances, explained, 868; is inadequate to the dis-
charge of former debts, and almost wholly applied to other purposes, 872-3;
motives to the misapplication of it, 873.
Slaves, the labour of, dearer to the masters than that of free men, 80; under
feudal lords, circumstances of their situation, 364; countries where this
order of men still remains, 365; why the service of slaves is preferred to that
of free men, ib.\ their labour why unprofitable, 366; causes of the abolishing
of slavery throughout the greater part of Europe, 366-7,
[Cultivation under the Romans by, 524;] receive more protection from the
magistrate in an arbitrary government, than in one that is free, 553; why
employed in manufactures by the ancient Grecians, 647-8; why no im-
provements are to be expected from them, 648; [domestic pedagogues usual-
ly slaves in Greece and Rome, 730.]
[Smith, Charles, Tracts on the Corn TradCf quoted, 199, 428, 473, 475.]
[Smith, John, Memoirs of Wool, quoted, 2^0, 616.J
Smuggling, a tempting, but generally a ruinous emplojnnent, in; [of lea, 203;
96o index
moderate tax does not encourage, 520; encouraged by Hgh duties, [779,]
832; remedies against, 835; [excise laws obstruct more than those of the
customs, 837;] the crime of, morally considered, 849; [more opportunities
for, in thinly peopled countries, 891.]
[Soap, dearer in consequence of taxes, 78; rendered necessary by the use of linen,
825.]
[Society, human, the first principles of, 14.]
Soldiers, remarks on their motives for engaging in the military line, 109; com-
parison between the land and sea service, ih.\ why no sensible inconvenience
felt by the disbanding of great numbers after a war is over, 436; reason of
their first serving for pay, 656; [possible proportion of, in civilised society,
657;] how they became a distinct class of the people, 660; how distinguished
from the militia, ih.\ alteration in their exercise produced by the invention
of fire-arms, 660-1.
Solomon, Proverbs of, 724 ]
Solon, laws of, 510, 730.]
Solorzano, quoted, 201J
Sou, 27.]
Sound, the, transit duty, 846.]
South Carolina, expenst of civil establishment, 540; duty on molasses, 888-9.]
South Sea company, amazing capital once enjoyed by, 700, [703;] mercantile
and stock-j'obbing proj'ects of, 703; assiento contract, ib.\ whale fishery, ib.;
the capital of, turned into annuity stock, 704, 866, [868.]
Sovereign and trader, inconsistent characters, 771.
Sovereign, three duties only, necessary for him to attend to, for supporting a
system of natural liberty, 651; how he is to protect the society from external
violence, 653, 668; and the members of it, from the injustice and oppression
of each other, 669; and to maintain public works and institutions, 681.
Spain [mark on ingots of gold, 25; tax of one fifth on Peruvian mines, 169, 201;
avidity for gold in St. Domingo, 174; declension not so great as is commonly
imagined, 202; saying of Charles V. that everything was wanting, ib.; colo-
nies, 203; sheep killed for fleece and tallow, 229;] one of the poorest countries
in Europe, notwithstanding its rich mines, 238-9; [wool, 244, 345, 382, 383,
616; ambassador gave Queen Elizabeth stockings, 245;] its commerce has
produced no considerable manufactures for distant sale, and the greater
part of the countiy remains uncultivated, 395; Spanish mode of estimating
their American discoveries, 399; [wealth according to the Spaniards con-
sisted in gold and silver, ib.; prohibition of English woollens in Flanders,
434; sober, though wine is cheap, 459.]
The value of gold and silver there, depreciated by laying a tax on the
exportation of them, 478; agriculture and manufactures there, discouraged
by the redundancy of gold and silver, 479; natural consequences that would
result from taking away this tax, ib.; [attempt to deprive Britain of Portu-
gal trade, 515; representations of Columbus to the court, 527;] the real and
pretended motives of the court of Castile for taking possession of the coun-
tries discovered by Columbus, 528; the tax on gold and silver, how reduced,
529; gold, the object of all the enterprises to the new world, 529[-3i; Crown
derived some revenue from colonies, 534;] the colonies of, less populous
than those of any other European nation, ib.; asserted an exclusive claim to
all America, until the miscarriage of their invincible armada, 536; policy of
the trade with the colonies, 543; the American establishments of, effected by
private adventurers, who received little beyond permission from the govern-
ment, 556; [Flota drained Germany of many commodities, 572;] lost its
manufactures by acquiring rich and fertile colonies, 575; [veterans equalled
by the American militia, 663; united with France by the British acquisition
of Gibraltar and Minorca, 698-9; transaction with South Sea Company,
703-4; Greek not taught in universities, 722;] the Alcavala tax there ex-
plained, 850; the ruin of the Spanish manufactures attributed to it, ib.;
[large national debt, 881; see Spain and Portugal]
INDEX
9O1
[Spain and Portugal, supposed to have gone backwards, 202; beggarly and mis-
governed countries though the value of gold and silver is low, 238-9; in-
effectual attempts to restrict exportation of gold and silver, 400, 404, 508;
quantity of gold and silver annually imported, 412.]
[Gold and silver naturally a little cheaper there than elsewhere, 478; ex-
ports of gold and silver nearly equal to the imports thereof, ih.) agriculture
discouraged by the cheapness of gold and silver, 479; would gain by aban-
doning the restrictions, 479-80; history of the American colonies, 534-6;
colonies have more good land than the British, 538; right of majorazao in
the colonies hinders improvement, 539; some revenue drawn from the
colonies, 541, 560; colonial commerce confined to one port and to licensed
ships, 543; American fish trade, 545; absolute government in colonies, 552;
benefited by colonisation of America, 557; colonial monopoly has not
maintained manufactures, 575; and its bad effects have nearly overbalanced
the good effects of the trade, ih.) capital not augmented by the exorbitant
profits of Cadi^ and Lisbon, 578; the colonies give greater encouragement
to the industry of other countries, 591; only the profits of the linen trade
with America spent in, ih.]
[Sparta, iron money at, 24.]
Speculation, a distinct employment in improved society, 10; speculative mer-
chants described, 114.
[Spices, Dutch are said to burn, in plentiful years, 158, 491, 600; imported into
Great Britain, 834.]
[Spirits, licence to retail, 804; wages not affected by taxes on, 823; taxes on,
paid by consumers, 828; policy of Great Britain to discourage consumption
of, 842.]
[Spitalfields, silk manufacture, 381-2.]
Stage, public performers on, paid for the contempt attending their profession,
107; the political use of dramatic representations, 748.
[Stallage, 374.]
[Stamp Act, the American, 84, 571.]
Stamp duties, [on proceedings in law courts might maintain the judges, 679-80;
loans taxed by, 810;] in England and Holland, remarks on, 812; [on wills in
Holland, ihr, in France, 813, 814; have become almost universal in Europe
in the course of a century, 813; often taxes on consumption, 815; one of
three principal branches of British taxes, 887- extension to the colonies
887.]
[Stamps on linen and woollen cloth, 25, 122 ]
[Standard money, 39, 40.]
[Statesman or politician, who attempts to direct the employment of private
capital, 423; insidious and crafty animal, 435; in barbarous societies every
man a, 735.J
Stecl-bow tenants in Scotland, what, 367,
[Stewart, House of, 751.]
Stock, [early state preceding accumulation of, 47;] the profits raised on, in manu-
factures, explained, 48; in trade, an increase of, raises wages, and diminishes
profit, 87; [profits of, 87-143;] must be larger in a great town than in a
country village, 89; natural consequences of a deficiency of stock in new
colonies, 92; the profits on, little affected by the easiness or difficulty of
learning a trade, 103; but by the risk, or disagreeablencss of the business,
iio-i; [circulation of, obstructed, 135;] stock employed for profit, sets into
motion the greater part of useful labour, 249; no accumulation of, necessary
in the rude state of society, 2^9; the accumulation of, necessary to the
division of labour, ih.) stock distinguished into two parts, 260-1; the general
stock of a countty or society, explained, 263; houses, ih.; improved land,
26s; personal abilities, ib.; money and provisions, 266; raw materials and
manufactured goods, ib.; stock of individuals, how employed, 268; is fre-
quently buried or concealed, in arbitrary countries, ib.; the profits on, de^
962 INDEX
crease, in proportion as the quantity increases, 318; on what principles
Stock is lent and borrowed at interest, 333.
' That of every society divided among different employments, in the propor-
tion most agreeable to the public interest, by the private views of indivi-
duals, 594; the natural distribution of, deranged by monopolizing systems,
596; every derangement of, injurious to the society, 597; mercantile, is
barren and unproductive, according to the French agricultural system of
political oeconomy, 631; how far the revenue from, is an object of taxation,
798; [easily removed, 800;] a tax on, intended under the land tax, 801.
Stockings, why cheaply manufactured in Scotland, 117; when first introduced
into England, 245.
[Stomach, desire of food bounded by narrow capacity of the, 164.]
Stone quarries, their value depends on situation, 163, 175.
Stones, precious, of no use but for ornament, and how the price of, is regulated,
172; the most abundant mines of, would add little to the wealth of the
world, 173.
[Stowe, 331.]
[Suabia, house of, 378.]
Subordination, how introduced into society, 670; personal qualifications, 671;
age and fortune, il.; birth, 672; birth and fortune two great sources of
personal distinction, 673.
Subsidy, old, in the English customs, the drawbacks upon, 466-7; origin and
import of the term, 830.
[Succession, laws of, 361.]
[Successions, tax on, in Holland, 810.]
Sugar, [currency in some West India Colonies, 23;] a very profitable article of
cultivation, 156, [157], 366.
Drawbacks on the exportation of, from England, 467; might be cultivated
by the drill plough, instead of all hand labour by slaves, 553; [tax on, does
not affect wages, 823; yields considerable customs revenue, 834; duty on,
falls chiefly on middle and upper ranks, 837; planters say the duty falls on
the producer, 844;] a proper subject for taxation, as an article sold at a
monopoly price, ibr, [nowhere a necessary of life, 889.]
Sumptuary laws superfluous restraints on the common people, 329; [resemblance
of taxes on luxuries to, 827.]
Surinam, present state of the Dutch colony there, 537.
Surmullet, high price paid for, 219.J
Sussex, restrictions on transport of wool, 614.]
Sweden, improved since the discovery of .^erica, 202; tea smuggled from, 205;
established exclusive company for East Indian trade, 417; settlements in
New, World, 536; pitch and tar company of, 547; without an exclusive
company would never have sent a ship to East Indies, 596; and would have
suffered no loss, 597; exempted from Eastland Company's exclusive privi-
lege, 693; Reformation in, 758; eminent men of letters professors, 763-4.)
[Swift, quoted, 832.]
Switzerland [farmers not inferior to the British, 371; cities became independent,
378; sometimes may be necessary to restrain export of corn, 507; militia
regimented, 660; militia defeated Austrian and Burgundian militia, 666;
whole people exercised in use of arms, 739;] establishment of the reforma-
tion in Berne and Zurich, 758; [many cities capitals of little republics, 760;
respectable clergy, 762; eminent men of letters professors in Protestant
cantons, 763;] the clergy there zealous and industrious, 765-6; [both reli-
gions established in some cantons, j&.;] taxes how paid there, 802, 81 r.
[S3nracuse a great colony, 533.]
[Syria, 664,]
Taille, in France, the nature of that tax, and its operation, explained, 370, 805;
[real or predial, 787; real and personal, 805; on the industry of workmen and
INDEX 963
day labourers a tax on wages, 817; not farmed, 855; should be abolished and
replaced by an increase of vingtUmeSj ih,]
[Tailors, the lowest order of artificers, wages in London, 104; wages in London
regulated by statute, 141-2.]
Talents, natural, not so various in different men as is supposed, 15,
Tallage, 370.]
Tallies, exchequer, 864.]
Tarentum a great colony, 533.]
Tartar Khan, history written by a, 391.]
Tartars, [barbarous because inland, 20; ignorant, 203; caravans passing through
204; taxes on travellera, 373; ancient families common among, 391; shep-
herds, with no regulations of law as to transmission of property, ih.\ wealth
considered to consist in cattle, 399; chiefs have treasures, 414.]
Their manner of conducting war, 653-4; their invasions dreadful, 655;
[militia serves under ordinary chieftains, 662; obedience in the field superior
to the Highlanders, ib.'; most formidable enemies to the Romans, 664-5;
conquests of civilised Asiatic countries, 667, 741; chiefs can only use surplus
revenue in maintaining more men, 671; Khans despotic, 672; justice a
source of revenue after fall of Western empire, 674-5; hungry, 741; chiefs
revenue profit, 769.]
Tavernier, his account of the diamond mines of Golconda and Visiapour, 172.
Taxes, [derivative revenue, 53; on gold and silver very proper, 214;] the origin of,
under the feudal government, 373-4.
[Moderation of, a cause of the prosperity of British American colonies,
540; ruinous, of private luxury and extravagance, 541; American, generally
insufficient to defray the cost of the colonies, 560; on exportation of wool
would cause little inconvenience, 618; imposed by means of a monopoly,
712; general discussion of, 777-852;] the sources from whence they must
arise, 777; unequal taxes, ih.\ ought to be clear and certain, ih.\ ought to be
levied at the times most convenient for payment, 778; ought to take as
little as possible out of the pockets of the people, more than is brought into
the public treasury, ih.\ how they may be made more burdensome to the
people than beneficial to the sovereign, 779; the land-tax of Great Britain,
780; land-tax at Venice, 782; improvements suggested for a land-tax, ib.^
mode of assessing the land-tax in Prussia, 787; tythes a very unequal tax,
and a discouragement to improvement, 789; operation of tax on house rent,
payable by the tenant, 792; a proportionable tax on houses, the best source
of revenue, 794; how far the revenue from stock is a proper object of taxa-
tion, 798; whether interest of money is proper for taxation, 799; how taxes
are paid at Hamburgh, 801; in Switzerland, 802; taxes upon particular em-
ployments, 803; poll taxes, 808; taxes, badges of liberty, ib.'; taxes upon the
transfer of property, 810; stamp duties, 812; on whom the several kinds of
taxes principally fall, 813; taxes upon the wages of labour, 815; capitations,
819; taxes upon consumable commodities, 821; upon necessaries, 822; upon
luxuries, 823; principal necessaries taxed, 824; absurdities in taxation,
825-6; different parts of Europe very highly taxed, 826; two different
methods of taxing consumable commodities, 827; Sir Matthew Deckeris
scheme of taxation considered, 828; excise and customs, 829; taxation some-
times not an instrument of revenue, but of monopoly, 833; improvements
of the customs suggested, 834; taxes paid in the price of a commodity little
adverted to, 846-7; on luxuries, the good and bad properties of, ib.; bad
effects of farming them out, 853; how the finances of France might be re-
formed, 855; French and English S3rstems of taxation compared, 856; new
taxes always generate discontent, 873; how far the British system of taxa-
tion might be applicable to all the different provinces of the empire, 886;
such a plan might speedily discharge the national debt, 890,
Tea, great importation and consumption of that drug in Britain, 205; [quantities
smuggle^ 405; tax on, does not affect wages, 823; Dutch licences to drink,
964 INDEX
829; affords large part of customs revenue, 834; duty falls on middle and
upper ranks, 837.]
Teachers [earnings of, 132-4;] in universities, tendency of endowments to dimin-
ish their application, 717; the jurisdictions to which they are subject, little
calculated to quicken their diligence, 718;^ are frequently obliged to gain
protection by servility, 719; defects in their establishments, 719; teachers
among the ancient Greeks and Romans, superior to those of modern times,
732; circumstances which draw good ones to, or drain them from, the uni-
versities, 762-3; their employment naturally renders them eminent in
letters, 764.
[Tenths and jBfteenths, 370.]
Tenures, feudal, general observations on, 318; described, 362.
Terra Firma, 527.]
Terray, Abb6, laised rate of interest in France, 90.]
Teutonic order, land-tax of, in Silesia, 786.]
Thales, school established in a colony, 533.]
Theocritus, quoted, 10 1.]
Theognis, 724.]
Theology, monkish, the complexion of, 726.
Thorn, William, quoted, 178.]
Thrasymenus, battle of, 664.]
Thucydides, quoted, 655, 656.]
Timaeus, quoted, 24.]
Timber, rent for land producing, 163.]
Tin, average rent of the mines of, in Cornwall, 168; yield a greater profit to the
proprietors than the silver mines of Peru, 169; regulations imder which tin-
mines are worked, 170.
Tobacco, [currency in Virginia, 23;] the culture of, why restrained in Europe,
157; not so profitable an article of cultivation in the West Indies as sugar,
ih.\ the amount and course of the British trade with, explained, 353; [pro-
fits of, can afford slave cultivation, 366; trade in, 458-9.]
The whole duty upon, drawn back on exportation, 467; consequences of
the exclusive trade Britain enjoys with Maryland and Virginia in this
article, 561; [tax on, does not raise wages, 823; contributes large amount to
customs revenue, 834; Walpole's scheme for lev^ng the tax on, 837; mono-
poly in France, 854-5; nowhere a necessary of life, but a proper subject of
taxation, 889.]
[Tobago, a new field for speculation, 895.]
Tolls, for passage over roads, bridges, and navigable canals, the equity of, shewn,
683; upon carriages of luxury, ought to be higher than upon carriages of
utility, il).\ the management of turnpikes often an object of just complaint,
684; why government ought not to have the management of turnpikes,
685, 845; [on carriages an unequal general tax, 686; lay expense of maintain-
ing roads on those who benefit, 767-8.]
Tonnage and poundage, origin of those duties, 830.
[Tonquin vessels at Batavia, 600.]
Tontine in the French finances, what, with the derivation of the name, 870.
[Toul treated as foreign by France, 852.]
Toulouse, salary paid to a counsellor or judge in the parliament of, 678.
Towns, the places where industry is most profitably exerted, i25[-8;] the spirit
of combination prevalent among manufacturers, 126, 128; according to
what circumstances the general character of the inhabitants, as to industry,
is formed, 319; the reciprocal nature of the trade between them and the
country, explained, 356; subsist on the surplus produce of the country, 357;
how first formed, 358; are continual fairs, ihr, [rise and progress of, 373-83;]
the original poverty and servile state of the inhabitants of, 373; their early
exemptions and privileges, how obtained, 374; the inhabitants of, obtained
liberty much earlier than the occupiers of land in the country, ih.\ origin of
free burghs, 375; origin of coiporations, ib.] why allowed to form imlitia,
INDEX
96s
378; how the increase and riches of commercial towns contributed to the
improvement of the countries to which they belonged, 384[-96; favoured by
Colbert at the expense of the country, 628.]
^Tracts on the Com Trade quoted, 199, 428, 473, 475.]
Trade, double interest deemed a reasonable mercantile profit in, 97; four general
classes of, equally necessary to, and dependent on, each other, 341; whole-
sale, three different sorts of, 348; the different returns of home and foreign
trade, 34^; the nature and operation of the carrying trade examined, 351;
the principles of foreign trade examined, 353; the trade between town and
country explained, 356; original poverty and servile state of the inhabi-
tants of towns, under feudal government, 373; exemptions and privileges
granted to them, 374; extension of commerce by rude nations selling their
own raw produce for the manufactures of more civilized countries, 380; its
salutary effects on the government and manners of a country, 385; subvert-
ed the feudal authority, 388; the independence of tradesmen and artisans,
explained, 390; the capitals acquired by, very precarious, until some part
has been realized by the cultivation and improvement of land, 395; over
trading, the cause of complaints of the scarcity of money, 406; the importa-
tion of gold and silver not the principal benefit derived from foreign trade,
41 5 ; effect produced in trade and manufactures by the discovery of America,
416; and by the discovery of a passage to the East Indies round the Cape
of Good Hope, ih.] error of commercial writers in estimating national
wealth by gold and silver, 418; inquiry into the cause and effect of restraints
upon trade, 418; individuals, by pursuing their own interest, unknowingly
promote that of the public, 423; legal regulations of trade, unsafe,
retaliatory regulations between nations, 434; measures for la3dng trade
open, ought to be carried into execution slowly, 438; policy of the restraints
on trade between France and Britain considered, 441; no certain criterion
to determine on which side the balance of trade between two countries
turns, 442; most of the regulations of, founded on a mistaken doctrine of the
balance of trade, 456; is generally founded on narrow principles of policy,
460.
Drawbacks of duties, 466; the dealer who employs his whole stock in one
single branch of business, has an advantage of the same kind with the work-
man who employs his whole labour on a single operation, 496; consequences
of drawing it from a number of small channels into one great channel, 570-1 ;
colony trade, and the monopoly of that trade, distinguished, 573; the inter-
est of the consumer constantly sacrificed to that of the producer, 625; ad-
vantages attending a perfect freedom of, to landed nations, according to the
present agricultural system of political oeconomy in France, 635; origin of
foreign trade, 635; consequences of high duties and prohibitions, in landed
nations, 636, 637; how trade augments the revenue of a country, 641;
[foreign, gives opportunity for improvement by example, 645;] nature of the
trading intercourse between the inhabitants of towns and those of the
country, 649-50.
[Trade, Board of, 695.]
Trades, cause and effect of the separation of, 5; origin of, 14, 15.
[Traites in France, divide the country into three parts, 852; are farmed, 855.]
[Transfer of property, taxes on, 810.]
Transit duties explained, 845.
Travelling for education, summary view of the effects of, 728.
Treasures, [of princes formerly a resource in war, 410; no longer accumulated
except by king of Prussia, i 5 .;] why formerly accumulated by princes, 414.
Treasure trove, the term explained, 268; why an important branch of revenqe
under the ancient feudal governments, 860.
Treaties of commerce, 511-16.]
Trebia, battle of, 664.]
Triclinaria, high price of, 649.] '
Troll, Archbishop of Upsal, 758 ]
INDEX
966
Troyes fair and weight, 26.]
Truck, 13, 14.]
Trust remunerated, 49.]
Tumbrel and Pillory, statute of, 183 J
’Turdi fed by the Romans, 224.]
Turkey, treeisure buried and concealed, 268; conquest of Egypt, 380, 525;
peace with Russia, 573.]
Turkey company, [commerce of, required an ambassador at Constantinople,
690;] short Idstorical view of, 693.
[Turnips reduced in price, 78.]
Turnpikes, [counties near London petitioned against, 147;] see Tolls.
Tuscany, commerce and manufactures diminished, 396.]
Tutors, private, lowest order of men of letters, 733.]
Twelve Tables, 731,]
Two and two in the arithmetic of the customs make one, 832.]
Tyrrell, quoted, 675.]
Tythes, [great hindrance to improvement, 367; none in British American colo-
nies, 541;] why an unequal tax, 788; the levying of, a great discouragement
to improvements, 789; [confined the cultivation of madder to Holland, i6.;]
the fijnng a modus for, a relief to the farmer, 791.
Ukraine, 203, 414.]
;Ulloa, quoted, 148, 168, 169, 170, 186, 204, 534, 543.]
Undertakers let the furniture of funerals, 265.]
Unfunded debt, 863.]
Universities, [seven years’ apprenticeship at, 120; proper name for any incor-
poration, ih.]
The emoluments of the teachers in, how far calculated to promote their
diligence, 717; the professors at Oxford have mostly given up teaching, 718;
those in France subject to incompetent jurisdictions, ih,] the privileges of
graduates improperly obtained, 719; abuse of lectureships, 719-20; the
discipline of, seldom calculated for the benefit of the students, 720; arc, in
England, more corrupted than the public schools, 721; original foundation
of, ih,\ how Latin became an essential article in academical education, 722;
how the study of the Greek language was introduced, ib.] the three great
branches of the Greek philosophy, 723; are now divided into five branches,
725; the monkish course of education in, 726; have not been very ready to
adopt improvements, 727; [improvements more easily introduced into the
poorer, ih.]\ are not well calculated to prepare men for the world, ih,] how
filled with good professors, or drained of them, 763; where the worst and
best professors are generally to be met with, ih,] see Colleges and Teachers.
Unproductive, see Productive.]
Unterwald, taxes publicly assessed by the contributor, 802; moderate tax, 803.]
Ustaritz, quoted, 850.]
Usury prohibited, 860; see Interest.]
Utopia, 437, 887.]
Utrecht, 453.]
Utrecht, Treaty of, 703, 874.]
[Vacations, French fees of court, 678.]
Value, the term defined, 28; [rules which determine the relative or exchangeable
value of goods, 28-62,]
[VaiTO quoted, 153, 224.]
Vedius PoUio, his cruelty to his slaves checked by the Roman emperor Augustus,
which could not have been done under the republican form of government,
, 554 -
[Veil, siege of, 656, 657.]
[Velvet, prohibition of importation of, would be unnecessary if raw silk were
free from duty, 837.]
INDEX 967
Venice, [history different from that of the other Italian republics, 378; shipping
encouraged by the crusades, 380;] origin of the silk manufacture in that
city, 381; [exchange with London, 445; bank of, 447.]
Traded in East India goods before the sea track round the Cape of Good
Hope was discovered, 525; [envied by the Portuguese, ib.] fleets kept within
the Mediterranean, 536; draws profit from a bank, 770;] nature of the land-
tax in that republic, 782, [783; enfeebled by public debt, 881.]
Venison, the price of, in Britain, does not compensate the expence of a deer
park, 224.
yera Cruz, South Sea Company’s trade at, 704.]
Verd, Cape de, islands, 525.]
yerdun treated as foreign by France, 852.]
Versailles, idle because the residence of a court, 319; an ornament to France,
33I-]
Vicesima haereditatum among the ancient Romans, the nature of, explained,
810.
[Vienna, small capital employed in, 320.]
Villages, how first formed, 358.
Villenage, probable cause of the wearing out of that tenure in Europe, 367;
[freedom obtained by a villain who resided a year in a town, 379; depend-
ence on proprietors, 386.]
Vineyard, [high rent of some land peculiarly suitable for, 61;] the most profitable
part of agriculture, both among the ancients and modems, 154; great ad-
vantages derived from peculiarities of soil in, 155.
[Vingti^me resembles English land-tax, 809; not farmed, 855; should be increased
in place of the taille and capitation, i&J
[Virginia, tobacco currency, 23; evidence of a merchant trading with, 15 1; to-
bacco more profitable than corn, 157; with Maryland, the chief source of
tobacco, ih.; stores and warehouses belong to residents in England, 347;
trade with, 350-1, 457; tobacco trade, 353, 467, 560-1, 568.]
[Expense of civil establishment, 540; progress unforeseen in 1660, 564; no
necessity for gold and silver money, 894.]
[Visiapour diamond mines, 172,]
[Voltaire, quoted, 763.]
[Vulgate, 722.]
Wages of labour [allowance made for hardship and ingenuity, 31; money, ac-
commodated to the average price of com, 36; value which workmen add to
materials pays their wages, 48; of inspection and direction, 48-9; one of
three original sources of revenue, 52, 777; sometimes confounded with
profit and rent, 53; ordinary, average or natural rate of, 55; how affected by
state of society, 63; general discussion of, 64-86;] how settled between
masters and workmen, 66; the workmen generally obliged to comply with
the terms of their employers, ib.\ the opposition of workmen outrageous,
and seldom successful, 67; circumstances which operate to raise wages, 68;
the extent of wages limited by the funds from which they arise, 68-9; why
higher in North America, than in England, 69-70; are low in countries that
are stationary, 71; not oppressively low in Great Britain, 74;^ a distinction
made here between the wages in summer and in winter, 74; if sufl&cient in
dear years, they must be ample in seasons of plenty, ib.\ different rates of,
in different places, 74-5; liberal wages encourage industry and propagation,
81; an advance of, necessarily raises the price of many commodities, 86; an
average of, not easily ascertained, 87; [continually increasing since the time
of Henry VIII., 89; higher in North American and West Indian colonies
than in England, 92; do not sink with profits there, ib.\ very low in a coun-
ty which could advance no further, 94;] the operation of high wages and
high profits compared, 97; causes of the variations of, in different employ-
ments, 99[-i43]; are generally higher in new, than in old trades, 114, 134;
968
INDEX
legal regulations of, destroy industry and ingenuity, 14 1; [high, a cause of
high prices, 146.]
[Merchants complain of high, but say nothing about profits, 565; reduced
by the colonial monopoly, 576;] natural effect of a direct tax upon, 81 $[-8,
822; connexion of, with price of provisions, 815.]
[Wales, stone quarries afford no rent, 163; old families common, 391; mountains
destined to be breeding ground of Great Britain, 427.]
Walpole, Sir Robert, his excise scheme defended, 837.
Wants of mankind, how supplied through the operation of labour, 22; how ex-
tended, in proportion to their supply, 163-4; the far greater part of them
supplied from the produce of other men’s labour, 259.
Wars, foreign, the funds for the maintenance of, in the present century, have
little dependence on the quantity of gold and silver in a nation, 409-10;
[expences abroad defrayed by export of commodities, 410-4.]
How supported by a nation of hunters, 653; by a nation of shepherds, ih.\
by a nation of husbandmen, 655; men of military age, what proportion they
bear to the whole society, 656; feudal wars, how supported, causes which
in 'ie advanced state of society, rendered it impossible for those who took
the field, to maintain themselves, 656-7; how the art of war became a dis-
tinct profession, 658; distinction between the militia and regular forces,
660; sdteration in the art of war produced by the invention of fire-arms,
660-1, 668; importance of discipline, 662; Macedonian army, 663; Cartha-
ginian army, 663-4; Roman army, 664; feudal armies, 666; a well-regulated
standing army, the only defence of a civilized country, and the only means
for speedily civilizing a barbarous county, 667; the want of parsimony
during peace, imposes on states the necessity of, contracting debts to carry
on war, 861, 872; why war is agreeable to those who live secure from the
immediate calamities of it, 872; advantages of raising the supplies for, with-
in the year, 878; [popularity of, and how it might be removed, ih]
[Warwick, the Earl of, his hospitality, 385-6.]
Watch movements, great reduction in the prices of, owing to mechanical im-
provements, 243.
[Waterworks a business suitable for a joint-stock company, 713, 714, 715.]
Wealth, [real, the annual produce, lx, 238, 241, 321, 329-30, 419; national, repre-
sented by one system of poUtical ceconomy as consisting in the abimdance
of gold and silver, 237-8; land the most important and durable part of, 241;
real, 247, 248; that of England much increased since 1660, 327;] and money,
synonymous terms, in popular language, 398, 418J Spanish and Tartarian
estimate of, compared, 398; [wealth of a neighbouring nation advantageous
in trade, 461; accumulated produce, 659; makes a nation obnoxious to
attack, ib.][ the great authority conferred by the possession of, 671.
Weavers, the profits of, why necessarily greater than those of spinners, 51.
[Weigh and pay, maxim of the port of London, 569.]
[Western Islands, wages in, 76.]
West Indies, [sugar currency, 23; planters farm their own estates, 53; wages
higher than in England, 92; British acquisitions in, raised profits, 93; sugar
colonies resemble esteemed vineyards, r56; interest fallen since the discov-
ery of, 337; carmng trade between, and Europe, 354; would have pro-
gressed less rapidly if no capital but their own had been employed in the
export trade, 360; slavery harsher than in mediaeval Europe, 364; high
profits of sugar and consequent greater number of slaves in sugar colonies,
366; importation of gold and silver from the Spanish, 405; expense of last
war l^gely laid out in, 410.]
[British monopoly in sugar of, 464; Madeira wine imported directly, 469;
interest which caused settlements in, 523; no necessity for settlements, 525;
discovered by Columbus, 526; how tbey obtained this name, 527; the origi-
nal native productions of, ih.*, the thirst of gold the object of all the Spanish
enterprises there, 529; and of those of every other European nation, 533;;
[plenty of good land, 533, 538;] the remoteness of, greatly in favour of the
INDEX 969
European colonies there, 534; [Dutch originally under an exclusive com-
pany, 537; St. Domingo the most important of the sugar colonies, 538;
price of European goods enormous in Spanish, 542; some most important
productions non-enumerated, 544; freedom of trade with British American
colonies, 547;] the sugar colonies of France better governed than those of
Britain, 552-3; [effects of colonial monopoly, 567; returns of trade with,
more irregular and uncertain than with any part of Europe, 568; expense of
preventing smuggling, 580; proposal for obtaining war contributions from,
585; natives not benefited by the European discovery of, 590; gum senega
treated like an enumerated commodity from, 622; colonial system sacrifices
consumer to producer, 625; slave trade a loss to the African Company, 701;
French and Portuguese companies ruined by slave trade, 703; South Sea
Company's trade to the Spanish, some productions of, yield large por-
tion of British customs revenue, 834; more able to pay land-tax than Great
Britain, 887.]
[Westminster lanitax, 774, 801.]
[Westminster Hall, Rufus’ dining-room, 385.]
[Westmorland, price of coal in, 168.]
Wheat, see Corn.
[Whitehall, palace of, land-tax, 774.]
[William Rufus dined in Westminster Hall, 385.]
[William III. unable to refuse anything to the country gentlemen, 197.]
[Wilton, ornament to England, 331.]
Window tax in Britain, how rated, 797; tends to reduce house-rent, 798.
Windsor market, chronological table of the prices of corn at, 256-8.
Wine, the cheapness of, would be a cause of sobriety, 459; the carrying trade in,
encouraged by English statutes, 468; [cellar, a public, a source of revenue to
Hamburg, 769; licences to sell, 804; tax on, paid by consumers, 828; tonnage
on, 830; forei^ article commonly used in Great Britain, 834; Walpole’s
scheme for levying the tax on, 837; duty on, falls on middle and upper
ranks, ib.]
[Witchcraft, fear of, compared to that of engrossing and forestalling, 500.]
[Wolverhampton, manufactures of, not within the statute of apprenticeship,
1 21; manufactures grown up naturally, 383.]
[Women’s education contains nothing fantastical, 734.]
Wood, the price of, rises in proportion as a country is cultivated, 165; the growth
of young trees prevented by cattle, ^'6.; when the planting of trees becomes a
profitable employment, 166.
[Woodcocks could not be much increased, 218.]
Wool, the produce of rude countries, commonly carried to a distant market, 229;
the price of, in England, has fallen considerably since the time of Edward
IIL, 230; causes of this diminution in price, ib.\ the price of, considerably
reduced in Scotland, by the union with England, 234.
Severity of the laws against the exportation of, 612-3; restraints upon the
inland commerce of, 614; restraints upon the coasting trade of, 615; pleas on
which these restraints are founded, 615-6; the price of wool depressed by
these regulations, 616; the exportation of, ought to be allowed, subject to a
duty, 618.
Woollen cloth, the present prices of, compared with those at the close of the
fifteenth century, 244; three mechanical improvements introduced in the
manufacture of, 246; [in ancient Rome much higher in price than now, 649,]
[Yeomanry, superior position of the English, 368, 371.]
[Yorkshire, woollen manufacture, 84; cloth fallen in price, 244, 245; small paper
currencies, 307, 310; Scotch wool manufactured there, 346.]
[Young men’s generosity to their teachers, 721, 731.]
[Yucatan, 203.]
[Zama, battle of, 664.]
970 INDEX
[Zealand, French wine smuggled from, 442; expense of protecting from the sea,
857.]
Zemindaries, 791.]
Zeno of Citta, the Portico assigned to, 731.]
Zeno of Elea, travelled from place to place, 730.]
Zurich, the reformation in, 758; tax on revenue assessed by the contributor,
802; moderate tax, 803.]
[Zwinglius, 760.]
INDEX II
AUTHORITIES
This index contains the names of aidhorities referred to in the editor^ s notes as well
as in the author^ s notes and the text,
Abulgasi, Histoire ginMogique des Tatars^ traduite du manuscript Tartar e D^Abid-
gasi Bayadur-chan, etc.^ par D., Leyden, 1726, 391.
Acts of the Parliaments of Scotland, 1822, 183, 761.
America, The Present State of Great Britain and North America with regard to
Agriculture, Population, Trade and Manufactures, 1767, 70.
Anderson, Adam, Historical and Chronological Deduction of the Origin of Cown
merce, 1764, 246, 281, 306, 431, 442, 454, 547, 548, 552, 609, 616, 622, 690,
693, 694, 700, 701, 702, 703, 704, 705, 706, 707, 714, 715, 868, 869, 873, 875.
Anderson, James, Selectus diplomatum et numismatum Scotiae thesaurus, ed.
Thos. Ruddiman, 1739, 183, 213, 281, 282.
Arbuthnot, Dr. John, Tables of Ancient Coins, Weights and Measures, 2nd ed.,
1754, i33» 649, 321.
Aristotle, Politics, 25, 365, 729.
Arts et MStiers, Description des,faites ou approuv 6 es par Messieurs de VAcadSmie
Royale des Sciences, 1761-88, 126.
Ayr Bank, see Douglas, Heron and Co.
Bacon, Matthew, New Abridgement of the Law, 1768, 120, 368.
Baretti, Joseph, Journey from London to Genoa, through England, Portugal, Spain
and France, 1770, 513.
Bazinghen, M. Abot de, Traiti des Monnoies et de la jurisdiction de la Cour des
Monnoies en forme de dictionnaire, 1764, 518.
Beaumont, Moreau de, M ^moires concernant les Impositions et Droits en Europe,
1768, 770, 772, 782, 786, 787, 797, 801, 802, 806, 810, 811, 812, 817, 82^1,
827, 850.
Bell, John, of Antermony, Travels from St. Petersburg in Russia to Diverse Parts
of Asia, Glasgow, 1763, 644.
Bergeron, N., Voyages f aits principalement en Asie dans les xU., xiii., xiv., et xv.
siicles, 173s, 399.
Berkeley, Dr. George, Bishop of Cloyne, Querist, 1752, 78, 80.
Bernier, Francois, Voyages, 1710, 688.
Bible, 25, 789.
Birch, Thos., D.D., The Life of Henry, Prince of Wales, 1760, 131.
Blackstone, William, Commentaries on the Laws of England, 1765-9, 35, 233, 368.
Bolts, William, Consider atio'ns on India Af airs, particularly respecting the present
stale of Bengal and its Dependencies, 1772, 604.
Borlase, William, Natural History of Cornwall, 1758, 168, 169, 170.
Bouchaud, Mathieu Antoine, De Vimpdt du Vingtieme sur les successions et dc
Vimpdt sur les marchandises chez les Romains; recherckes historiques, etc.y
1772, 8to.
Brady, Robert, Historical Treatise of Cities and Burghs or Boroughs, 1711, 374.
British Merchant, 1721, see King, Charles,
Buffon, Histoire Naturelle, 1755, 226, 527.
971
972 INDEX II
Burman, De vectigalibus populi RomafS dissertatio (in Utriusque thesauri anti-
quitatum Romanarum graecarumque nom supplemental congesta ab J. Po-
leno, 1737), 810.
Bum, Richard, Ecclesiastical Law, 1763, 130.
Justice of the Peace, 1764, 122, 136, 139.
History of the Poor-laws, 1764, 77, 139, 140, 141.
Byron, Hon. John, Narrative of the Hon. John Byron, containing an Account of
the Great Distresses suffered by himself and his companions on the Coast of
Patagonia from 1740 to 1746, 1768, 186.
Cantillon, Richard, Essai sur la Nature du Commerce en ginM, 1755, 23, 30
68, 80, 99, 102, 105, 106, 211, 336, 358.
Cato, De re rustica, 429.
Chambers, E., Cyclopaedia, 1738, 5.
Charlevoix, F. X. de, Histoire de VIsle Espagnole ou de S. Domingue, 1730, 526,
527-
Histoire et description g&ntrale de la nouvelle France, avec le journal historique
d^un voyage dans VAmirique Septentrionnale, 17^, 538.
Child, Sir Josiah, New Discourse of Trade, 401, 692, 693, 695.
Churchill, Awnsham and John, Voyages and Travels, 1704, 535.
Cicero, Ad Atticum, 94.
De Divinatione, 827.
De Officiis, 150.
In Verrem, 218.
Columella, De re rustica, 153, 154, 224, 365.
Commons, Journals of the House of, 297, 711.
Considerations on the Trade and Finances of this Kingdom and on the measures of
administralion with respect to those great national objects since the conclusion
of the peace (attributed to Thos. Whately), 1766, 875.
Daniel, Gabriel, Histoire de France, 1755, 377, 378, 756.
Davenant, Dr. Charles, Works, 1771, 70, 77, 196, 842.
Decker, Sir Matthew, Essay on the Causes of the Decline of the Foreign Trade,
consequently of the Value of the Lands of Britain, and on the means to restore
both, 2nd ed., 1750, 480, 563, 825, 828.
De Lange, see Bell.
Denisart, J.-B., Collection de decisions nouvelles et de notions relatives d la juris-
prudence actuelle, 1771, 90.
Desaguliers, J. T., Course of Experimental Philosophy, 1744, 10.
Dion Cassius, History, 810.
Dion3rsius of Halicarnassus, Roman Antiquities, 729, 732.
Dobbs, Arthur, An Account of the Countries Adjoining to Ihidson^s Bay . , ,
with an Abstract of Captain Middleton^ s Journal, and Observations upon his
Behaviour, 1744, 701, 702.
Douglas, Heron and Co., The Precipitation and Fall of Messrs. Douglas, Heron
and Company, late Bankers in Air, with the Ca^uses of their Distress and
Ruin investigated and considered by a Committee of Inquiry appointed by the
Proprietors, Edinburgh, 1778, 297.
Douglass, Dr. William, A Summary, Historical and Political, of the First Plant-
ing, Progressive Improvements and Present State of the British Settlements in
North America, 1760, 23, 158, 310.
Du Cange, Glossarium, 378, 885.
Du Halde, J.-B., Description g^ographique, historique, chronologique, politique et
physique de V empire de la Chine et de la Tartarie chinoise, 1735, 7^, 644.
Du Pont de Nemours, P.-S-, Physiocratie, ou constitulion naturelle du gouverne-
ment le plus avantageux cm genre humain, 1768, 629.
Dupr6 de St. Maur, N,-F., Essai sur les Monnoies, ou riflexions sur le rapport
entre Vargent et les denries, 1746, 180, 198, 240.
INDEX II 973
Recherches sur la udeur des Monnoies et sur les prix des grains avant et
apris le concile de Francfortj 1762, 180.
Du Tot, Rijlexions politiques sur les Finances et le Commerce^ ou Von examine
qudles ont iti sur les reoenuSy les denrees^ le change stranger et consiquemment
sur notre commerce^ les influences des augmentations et des diminutions des
valeurs numeraires des monnoyes, 1754, 302, 864.
Du Verney, J. Paris, Examen du livre intiUde ^Rejlexions politiqim sur les
Finances et le Commerce^ 1740, 302, 864.
Encyclopedic, 1755, S> 367*
Expilly, Jean Joseph, Dictionnaire geographique, historique et politique des Gaules
et de la France, 1768, 856.
Fleetwood, William, Bishop of Ely, Chronicon Freciosum, 1707, 27, 34, 177, 178,
182, 184, 232, 251, 252, 255.
Folkes, Martin, Table of English Silver Coins, 1745, 26, 177, 251.
Frewin, R., see Sims and Frewin.
Fr6zier, Am6d^e-F., Voyage to the South Sea and along the Coasts of Chili and
Peru in the years 1712, 1713 and 1714, with a Postscript by Dr. Edmund
Halley, 1717, 169, 170, 204.
Fuller, Dr. Thomas, History of the University of Cambridge, 1655, 34.
Gee, Joshua, Trade and Navigation of Great Britain considered, 1729, 96.
Gentleman^ s Magazine, Aug., 1764, 208.
Gilbert, Sir Geoffrey, Chief Baron of the Exchequer, Treatise of Tenures, 1757,
368.
Treatise on the Court of Exchequer, 1758, 831.
Grotius, Dejure belli et pads, 1624, 23.
Guicciardini, F., Della Jstoria dPtalia, 1738, 395.
Gumilla, P. Jos6, Histoire naturelle civile et gtographique de VOrinoque, etc.
trans. (from the Spanish) by M. Eidous, 1758, 530.
Hale, Sir Matthew, Discourse touching Provision for the Poor, 1683, 77.
Hansard, Parliamentary History, 199.
Hanway, Jonas, Historical Account of the British Trade over the Caspian Sea,
with a Journal of Travels from London through Russia into Persia, and back
through Russia, Germany and Holland, 1753, 330.
Harris, Joseph, Essay upon Money and Coins, 1757, 3, 12, 15, 23, 26, 27, 28,
40, 4X, 44-
Harte, Walter, Essays on Husbandry, 1764, 371.
Hawkins, William, Treatise of the Pleas of the Crown, 1762, 613.
Hay, William, Remarks on Laws relating to the Poor, 1735, 141.
Hinault, C. J. F., Nouvd AbrSgd chromlogique de V histoire de France, 1768,
394-S, s88, 7 S 7 -
Herbert, C. J., Essai sur la police genirale des grains, sur leur pnx et sur les
effetsdeV agriculture, 1755, 180, 198.
Hobbes, Thomas, Leviathan, 1651, 31.
Homer, Iliad, 23, 676, 730. ^
Odyssey, 730.
Horsley, William, see Magens.
Hume, David, Essays, Moral and Political, 1748, 15, 833.
History of England, 1773, 26, 27, 77, 105, 132, 229, 374, 378, 380, 385, 386,
3877 388, 389, 4 i 3 » 669, 743.
Political Discourses, 1752, 30, 78, 309, 337, 385.
Hutcheson, Francis, System of Moral Philosophy, 1755, 23.
Hutchinson, Col., History of the Colony of MassachusetVs Bay, 1765, 893.
James, R , see Ramazzini.
974 INDEX II
Juan, Don G., and Don Ant, UUoa, Voyage historique de VAmirique wiridionalef
1752, 148, 169, 170, 186, 203, 204, 229, 534, 541, 543-
Kalm, Peter, Travels into North America, containing its natural history and a
circumstantial account of Us Plantations and Agriculture in general, etc,,
1770, 223.
Karnes, Henry Home, Lord, Sketches of the History of Man, 1774, 779, 802,
833 j 851.
Eling, Charles, British Merchant, 1721, 428, 512.
King, Gregory, Natural and Political Observations and Conclusions upon the
Stale and Condition of England, 1688, 196, 280.
La Riviere, Mercier de, VOrdre nalurel et essentid des SocieUs politiques, 1767,
264, 629, 643.
Law, John, Money and Trade, Considered with a Proposal for Supplying the
Nation with Money, 1705, 23, 28, 301, 302, 336.
Livy, History, 656.
Locke, John, Civil Government, 12, 399, 674.
Some Considerations of the Consequences of the Lowering of Interest and
Raising the Value of Money, 1696, Ivii, 23, 37, 336, 340, 399.
Further Considerations Concerning Raising the Value of Money, 1695, 43.
Lowndes, William, Report containing an Essay for the Amendment of the Silver
Coins, 1695, 26, 194.
Lucian, Eunuchus, 731.
Machiavelli, Niccold, History of Florence, 771.
Discourses on the First Decade of Titus Livius, 742.
Madox, Thomas, Firma Burgi, 1720, 120, 123, 124, 374, 375, 376, 377.
History and Antiquities of the Exchequer, 1711, 374.
Magens, N,, Universal Merchant, ed. Horsley, 1753, 43, 91, 207, 208, 304, 454.
Farther Explanations of subjects . . . contained in the Universal Merchant,
1756, 208, 211.
Mandeville, Bernard de, Fahle of the Bees, 1723, 3, 10, 12, 14, 102.
Martin-Leake, Stephen, Historical Account of English Money, 1745, 23.
INleggens, see Magens.
Melon, J. F., Essai Politique sur le Commerce, 1761, 877, 879, 885.
Mtmoires concernant les Droits, etc., see Beaumont, Moreau de.
Messance, Recherches sur la poptdation des g^n^aliUs d^ Auvergne, de Lyon, de
Rouen et de quelques provinces et villes du royaume, avec des reflexions sur la
valeur du bled tant en France qvden Angleterre depuis 1674 jusquden 1764,
1766, 84, 198, 240.
Mirabeau,^ Viet. Riquetti, Marquis de, Philosophic rurale, ou economic ginerale
et politique de V agriculture, pour servir de suite d V Ami des Hommes, 1766,
644.
Montesquieu, Esprit des Loix, 1748, 23, 96, 336, 348, 648, 729, 730, 808.
Morellet, Abb6 Andr^, Examen de la rSponse de M. N** [Necker] au Mimoire de
M, VAbbe Morellet, sur la Compagnie des Indes, 1769, 713.
Mun, Thomas, England's Treasure by Forraign Trade, or the Ballance of our
Forraign Trade is the Rule of our Treasure, 1664, 400, 401.
Necker, Jacques, Sur la legislation et le commerce des Grains, 1775, 856.
Newton, Sir Isaac, Representation to the Lords of the Treasury, 1717 (in Universed
Merchant, see Magens), 207.
Palladius, De re rustica, 153.
Percy, Henry Algernon, the fifth Earl of Northumberland, The Regulations and
Establishment of the Household of, at his castles of Wresill and Lekinfield in
Yorkshire, begun anno domini MDXII., 1770, 179.
Petty, Sir William, Political Arithmetic, 1699, 70.
975
INDEX II
Verhum Sapienti^ 1691, 280.
Pfeffel von Kriegelstein, C. F., Notcod Abrig^ chronologique de Vhistoire et du
droi-puUique d^Alkmagne, 1776, 376, 378.
Philosophical and Political History of the Establishment of the Europeans in the
two Indies j see Raynal.
Pinto, Isaac de, TraiU de la Circulation et du Cridit, 1771, 877.
Plato y Euthydemus, 28.
Republic, 729.
Pliny, Natural History, 23, 24, 27, 39, 133, 219, 365, 649.
Plutarch, Alexander, 133.
Demosthenes, 133.
Isocrates, 133.
Solon, 730.
Pococke, Dr. Richard, Bishop of Meath, Description of the East, 1743, 386.
Poivre, Pierre, Voyages d^un Philosophe, on observations sur les mceurs et les arts
des peuples de VAfrique, de VAsie, et de VAmirique, 176S, 156.
Police of Grain, see Herbert.
Polybius, History, 729, 732.
Postlethwayt, James, History of the Public Revenue from 1688 to 1753, with an
Appendix to 1758, 1759, 302, 303, 864, 86$, 866, 867, 868, 874.
Postlethwayt, Malachi, Dictionary of Commerce, 1757, 91.
Present State of Great Britain and North America with regard to Agriculture,
Population, Trade and Manufactures, 1767, see America.
Present State of the Nation, particularly with respect to its Trade, Finances, etc,
(attributed to William Knox), 1768, 410, 411, 874.
Price, Richard, Observations on Reversionary Payments, etc., 1771, 70.
Provisions, A Report from the Committee who, upon the Sth day of February, 1764,
were appointed to inquire into the Causes of the High Price of, with the Pro-
ceedings of the House thereupon, 1764, 151, 152.
Pufendorf, Dejure naturae et gentium, 23, 25, 28.
Quesnay, Francois, (Euvres, ed. Oncken, 1888, 72, 367, 637, 645.
Ralegh, Sir Walter, Works, ed. by Thos. Birch, 1751, 530.
Ramazzini, Bernard, De morbis artificum diatriba, trans. by R. James, 1746, 82.
Raynal, G. T. F., Histoire philosophique et politique des dablissemens et du com^
merce des EuropSens dans les deux Indes, Amsterdam ed., 1773, 203, 208,
209, 366, 367, 478, 5^3, 536, 542, 555, 590-
Reformateur, Le, 1756 827.
Ruddiman, Thomas, An Introduction to Mr. James Anderson^ s Diplomata
Scotiae, see Anderson, James.
Rymer, Thomas, Foedera, 77.
Sandi, Vettor, Principj di storia civile della Repubblica di Venezia, 1755, 381.
Saxby, Henry, The British Customs, containing an Historical and Practical Ac-
count of each branch of that part of the Revenue, 1757, 467, 468, 504, 608,
621, 626, 826, 834,
Seneca, De Ira, 554.
Sims, W., and R. Frewin, Rates of Merchandise, 1782, 626.
Smith, Adam, Lectures on Justice, Police, Revenue and Arms, 1896, 5, 7, 8, 9,
10, 12, 13, 14, 15, 16, 18, 21, 23, 28, 55, 62, 81, 95, ro2, 106, 121, 127, 150,
164, 243, 259, 301, 302, 309, 320, 334, 336, 361, 362, 363, 364, 365, 366,
367, 368, 369, 370, 371, 372, 373, 376, 379, 386, 388, 399, 410, 454, 460,
464, 554, 648, 653, 655, 667, 668, 669, 672, 674, 679, 764, 822, 877.
Smith, Charles, Three Tracts on the Corn Trade and Corn Laws, 1766, 192, 194,
199, 256, 428, 473, 475 , 501, 503, 504, 506. ^
Smith, John, Chronicon Rusticum-Commerciale, or Memoirs of Wool, 1747, 25,
231, 234, 428, 616.
Solorzano-Pereira, De Indiarum Jure, 1777, 201.
INDEX II
976
Steuart, Sir James, Inquiry into the Principles of Political Economy ^ 1767, 208.
Strype, John, Life of the learned Sir Thomas Smithy 1698, 34.
Swift, Dr. Jonathan, Answer to a Paper Called a Memorid of the Poor Inhabi-
tants, Tradesmen and Labourers of the Kingdom of Ireland, 832.
Tavernier, John Baptista, Six Voyages through Turkey into Persia and the East
Indies, 1678, 173.
Theocritus, Idylls, loi.
Thucydides, History, 655, 656.
Tracts upon the Corn Trade, see Smith, Charles.
Treaties of Peace, Alliance and Commerce between Great Britain and other Powers
from the Revolution in 1688 to the Present Time, 1772, 512.
Tyrrell, James, General History of England both Ecclesiastical and Civil, 1700,
675*
UUoa, Voyage historique de VAmirique rnSridionale, see Juan.
Uztariz, J6r6me, Theory and Practice of Commerce and Maritime Ajfairs, trans.
by John Kippax, 1751, 204, 851.
Varro, De re rustica, 153, 224.
Virgil, Georgies, 173-4, 556.
Voltaire, Sikle de Louis XIV., 454, 763.
Xenophon, Anabasis, 559.
Hdlenica, 415.
