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BOOK years of plenty, it was more difficult to get labourers and fervants.

THE scarcity of a dear year, by diminishing the demand for labour, tends to lower its price, as the high price of provifions tends to raise it. The plenty of a cheap year, on the contrary, by increafing the demand, tends to raise the price of labour, as the cheapnefs of provifions tends to lower it. In the ordinary variations of the price of provifions, those two oppofite caufes feem to counterbalance one another; which is probably in part the reason why the wages of labour are every-where fo much more steady and permanent than the price of provifions.

THE increase in the wages of labour neceffarily increases the price of many commodities, by increafing that part of it which refolves itself into wages, and fo far tends to diminish their confumption both at home and abroad. The fame caufe, however, which raises the wages of labour, the increase of ftock, tends to increase its productive powers, and to make a smaller quantity of labour produce a greater quantity of work. The owner of the ftock which employs a great number of labourers, neceffarily endeavours, for his own advantage, to make fuch a proper divifion and diftribution of employment, that they may be enabled to produce the greatest quantity of work poffible. For the fame reason, he endeavours to fupply them with the best machinery which either he or they can think of. What takes place among the labourers in a particular workhouse,

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VIII.

workhouse, takes place, for the fame reafon, CHA P. among thofe of a great fociety. The greater their number, the more they naturally divide themselves into different claffes and fubdivifions

of employment. More heads are occupied in inventing the most proper machinery for executing the work of each, and it is, therefore, more likely to be invented. There are many commodities, therefore, which, in confequence of these improvements, come to be produced by fo much lefs labour than before, that the increase of its price is more than compenfated by the diminution of its quantity.

CHA P. IX.

Of the Profits of Stock.

HE rife and fall in the profits of stock

THE

depend upon the fame caufes with the rife and fall in the wages of labour, the increafing or declining ftate of the wealth of the fociety; but those causes affect the one and the other very differently.

THE increase of stock, which raises wages, tends to lower profit. When the ftocks of many rich merchants are turned into the fame trade, their mutual competition naturally tends to lower its profit; and when there is a like increase of stock in all the different trades carried

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BOOK on in the fame fociety, the fame competition muft produce the fame effect in them all.

Harta IT is not eafy, it has already been obferved, to

Difficulty the avera rath of profils

afcertain what are the average wages of labour even in a particular place, and at a particular time. We can, even in this cafe, feldom determine more than what are the most usual wages. But even this can feldom be done with regard to the profits of stock. Profit is so very fluctuating, that the perfon who carries on a particular trade cannot always tell you himself what is the average of his annual profit. It is affected, not only by every variation of price in the commodities which he deals in, but by the good or bad fortune both of his rivals and of his cuftomers, and by a thousand other accidents to which goods when carried either by fea or by land, or even when stored in a warehouse, are liable. It varies, therefore, not only from year to year, but from day to day, and almost from hour to hour. To afcertain what is the average profit of all the different trades carried on in a great kingdom, must be much more difficult; and to judge of what it may have been formerly, or in remote periods of time, with any degree of precision, must be altogether impoffible.

BUT though it may be impoffible to determine with any degree of precifion, what are or were the average profits of ftock, either in the prefent, or in ancient times, fome notion may be formed of them from the intereft of money. It may be laid down as a maxim, that wherever a great deal can be made by the use of money. a great

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a great deal will commonly be given for the ufe CHAP.
of it; and that wherever little can be made by it,
lefs will commonly be given for it. According,
therefore, as the usual market rate of interest va-
ries in any country, we may be affured that the
ordinary profits of stock muft vary with it, must
fink as it finks, and rife as it rises. The progress
of interest, therefore, may lead us to form fome
notion of the progrefs of profit.

By the 37th of Henry VIII. all interest above ten per cent. was declared unlawful. More, it feems, had fometimes been taken before that. In the reign of Edward VI. religious zeal prohibited all intereft. This prohibition, however, like all others of the fame kind, is said to have produced no effect, and probably rather increased than diminished the evil of ufury. The ftatute of Henry VIII. was revived by the 13th of Elizabeth, cap. 8. and ten per cent continued to be the legal rate of intereft till the 21ft of James I. when it was restricted to eight per cent. It was reduced to fix per cent. soon after the restoration, and by the 12th of Queen Anne, to five per cent. All these different ftatutory regulations feem to have been made with great propriety. They feem to have followed and not to have gone before the market rate of intereft, or the rate at which people of good credit ufually borrowed. Since the time of Queen Anne, five per cent. seems to have been rather above than below the market rate. Before the late war, the government borrowed at three per cent.; and people of good credit in the capital, and in

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BOOK

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many other parts of the kingdom, at three and a half, four, and four and a half per cent.

SINCE the time of Henry VIII. the wealth and revenue of the country have been continually advancing, and, in the course of their progrefs, their pace feems rather to have been gradually accelerated than retarded. They feem, not only to have been going on, but to have been going on fafter and fafter. The wages of labour have been continually increafing during the fame period, and in the greater part of the different branches of trade and manufactures the profits of stock have been diminishing.

Ir generally requires a greater stock to carry on any fort of trade in a great town than in a country village. The great ftocks employed in every branch of trade, and the number of rich competitors, generally reduce the rate of profit in the former below what it is in the latter. But the wages of labour are generally higher in a great town than in a country village. In a thriving town the people who have great stocks to employ, frequently cannot get the number of workmen they want, and therefore bid against one another in order to get as many as they can, which raises the wages of labour, and lowers the profits of ftock. In the remote parts of the country there is frequently not stock fufficient to employ all the people, who therefore bid against one another in order to get employment, which lowers the wages of labour, and raises the profits of ftock.

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