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I.

BOOK don. If a London merchant, however, can buy at Canton for half an ounce of filver, a commodity which he can afterwards fell at London for an ounce, he gains a hundred per cent. by the bargain, juft as much as if an ounce of filver was at London exactly of the fame value as at Canton. It is of no importance to him that half an ounce of filver at Canton would have given him the command of more labour and of a greater quantity of the neceffaries and conveniences of life than an ounce can do at London. An ounce at London'will always give him the command of double the quantity of all these, which half an ounce could have done there, and this is precisely what he wants,

As it is the nominal or money price of goods, therefore, which finally determines the prudence or imprudence of all purchases and fales, and thereby regulates almost the whole bufinefs of common life in which price is concerned, we cannot wonder that it should have been fo much more attended to than the real price.

In fuch a work as this, however, it may fometimes be of ufe to compare the different real values of a particular commodity at different times and places, or the different degrees of power over the labour of other people which it may, upon different occafions, have given to those who poffeffed it. We must in this cafe compare, not fo much the different quantities of filver for which it was commonly fold, as the different quantities of labour which thofe different quantities of filver could have purchased,

But

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But the current prices of labour at diftant times CHA P. and places can scarce ever be known with any degree of exactness. Those of corn, though they have in few places been regularly recorded, are in general better known and have been more frequently taken notice of by hiftorians and other writers. We must generally, therefore, content ourselves with them, not as being always exactly in the fame proportion as the current prices of labour, but as being the nearest approximation which can commonly be had to that proportion. I fhall hereafter have occafion to make feveral comparisons of this kind.

In the progrefs of industry, commercial nations have found it convenient to coin feveral different metals into money; gold for larger payments, filver for purchases of moderate value, and copper, or fome other coarfe metal, for those of still fmaller confideration. They have always, however, confidered one of thofe metals as more peculiarly the measure of value than any of the other two; and this preference feems generally to have been given to the metal which they happened firft to make ufe of as the inftrument of commerce. Having once began to use it as their standard, which they must have done when they had no other money, they have generally continued to do so even when the neceffity was not the fame.

The Romans are faid to have had nothing but copper money till within five years before the

BOOK first Punic war*, when they firft began to coin I. filver. Copper, therefore, appears to have con

tinued always the measure of value in that republic. At Rome all accounts appear to have been kept, and the value of all eftates to have been computed, either in Affes or in Seftertii. The As was always the denomination of a copper coin. The word Seftertius fignifies two Affes and a half. Though the Seftertius, therefore, was originally a filver coin, its value was estimated in copper. At Rome, one who owed a great deal of money, was faid to have a great deal of other people's copper.

The northern nations who established themfelves upon the ruins of the Roman empire, feem to have had filver money from the first beginning of their fettlements, and not to have known either gold or copper coins for feveral ages thereafter. There were filver coins in England in the time of the Saxons; but there was little gold coined till the time of Edward III. nor any copper till that of James I. of Great Britain, England, therefore, and for the fame reason, I believe, in all other modern nations of Europe, all accounts are kept, and the value of all goods and of all eftates is generally computed in filver :and when we mean to exprefs the amount of a perfon's fortune, we feldom mention the number. of guineas, but the number of pounds fterling which we fuppofe would be given for it.

* Pliny, lib, xxxiii. c.

In

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Originally, in all countries, I believe, a legal C HA P. tender of payment could be made only in the coin of that metal, which was peculiarly confidered as the ftandard or meafure of value. In England, gold was not confidered as a legal tender for a long time after it was coined into money. The proportion between the values of gold and filver money was not fixed by any public law or proclamation; but was left to be fettled by the market. If a debtor offered payment in gold, the creditor might either reject fuch payment altogether, or accept of it at fuch a valuation of the gold as he and his debtor could agree upon. Copper is not at prefent a legal tender, except in the change of the finaller filver coins. In this ftate of things the diftinction between the metal which was the ftandard, and that which was not the standard, was something more than a nominal diftinction.

In process of time, and as people became gradually more familiar with the use of the dif ferent metals in coin, and confequently better acquainted with the proportion between their refpective values, it has in moft countries, I be lieve, been found convenient to afcertain this proportion, and to declare by a public law that a guinea, for example, of fuch a weight and fineness, fhould exchange for one-and-twenty fhillings, or be a legal tender for a debt of that amount. In this ftate of things, and during the continuance of any one regulated proportion of this kind, the diftinction between the inetal which is the ftandard, and that which is not the

ftandard

BOOK standard, becomes little more than a nominal

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diftinction.

In confequence of any change, however, in this regulated proportion, this diftinction becomes, or at least feems to become, fomething more than nominal again. If the regulated value of a guinea, for example, was either reduced to twenty, or raised to two-and-twenty fhillings, all accounts being kept and almost all obligations for debt being expreffed in filver money, the greater part of payments could in either cafe be made with the fame quantity of filver money as before; but would require very different quantities of gold money; a greater in the one cafe, and a fmaller in the other. Silver would appear to be more invariable in its value than gold. Silver would appear to measure the value of gold, and gold would not appear to measure the value of filver. The value of gold would seem to depend upon the quantity of filver which it would exchange for; and the value of filver would not feem to depend upon the quantity of gold which it would exchange for. This difference, however, would be altogether owing to the custom of keeping accounts, and of expreffing the amount of all great and fmall fums rather in filver than in gold money. One of Mr. Drummond's notes for five-and-twenty or fifty guineas would, after an alteration of this kind, be ftill payable with five-and-twenty or fifty guineas in the fame manner as before. It would, after fuch an alteration, be payable with the fame quantity of gold as before, but with

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