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workhouse, takes place, for the fame reafon, CHAP 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 diminu tion of its quantity.



Of the Profits of Stock.


'HE rife and fall in the profits of stock CHA P. depend upon the fame caufes with the rife and fall in the wages of labour, the increafing or declining state of the wealth of the fociety; but thofe caufes affect the one and the other very differently.

The increase of ftock, which raifes 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

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


It is not eafy, it has already been obferved, to afcertain what are the average wages of labour even in a particular place, and at a particular time. We can, even in this case, seldom determine more than what are the moft ufual wages. But even this can seldom be done with regard to the profits of flock. Profit is fo very fluctuating, that the person who carries on a particular trade cannot always tell you himfelf 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 thoufand other accidents to which goods when carried either by fea or by land, or even when stored in a warehoufe, are liable. It varies, therefore, not only from year to year, but from day to day, and almoft 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 precifion, 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


a great deal will commonly be given for the ufe C HA P. of it; and that wherever little can be made by it, lefs will commonly be given for it. According, therefore, as the ufual market rate of intereft varies in any country, we may be affured that the ordinary profits of stock muft vary with it, muft fink as it finks, and rife as it rises. The progrefs 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 faid to have produced no effect, and probably rather increased than diminished the evil of ufury. The statute 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 reftricted to eight per cent. It was reduced to fix per cent. foon after the restoration, and by the 12th of Queen Anne, to five per cent. All thefe different ftatutory regulations seem 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. feems to have been rather above than below the market rate. Before the late the government borrowed at three per cent.; and people of good credit in the capital, and in

K 4



BOOK 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 progress, 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 ftock have been diminishing.

It 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 flocks 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 flock. 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 raifes the profits of stock.


In Scotland, though the legal rate of intereft CHA P is the fame as in England, the market rate is rather higher. People of the best credit there feldom borrow under five per cent.

Even pri

vate bankers in Edinburgh give four
per cent.
upon their promiffory notes, of which payment
either in whole or in part may be demanded at
pleasure. Private bankers in London give no
intereft for the money which is depofited with
them. There are few trades which cannot be
carried on with a smaller stock in Scotland than
in England. The common rate of profit, there-
fore, must be fomewhat greater. The wages of
labour, it has already been obferved, are lower
in Scotland than in England. The country too
is not only much poorer, but the steps by which
it advances to a better condition, for it is evi-
dently advancing, feem to be much flower and
more tardy.


The legal rate of intereft in France has not, during the courfe of the prefent century, been always regulated by the market rate*. In 1720 intereft was reduced from the twentieth to the fiftieth penny, or from five to two per cent. In it was raised to the thirtieth penny, or to 3 per cent. In 1725 it was again raised to the twentieth penny, or to five per cent. In 1766, during the administration of Mr. Laverdy, it was reduced to the twenty-fifth penny, or to four per cent. The Abbe Terray raised it afterwards to the old rate of five per cent. The fup

*See Denifart, Article Taux des Interets, tom. iii. p. 18.


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