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BOOK pofed purpofe of many of thofe violent reductions


of intereft was to prepare the way for reducing that of the public debts; a purpose which has fometimes been executed. France is perhaps in the prefent times not fo rich a country as England; and though the legal rate of intereft has in France frequently been lower than in England, the market rate has generally been higher; for there, as in other countries, they have feveral very fafe and eafy methods of evading the law. The profits of trade, I have been affured by British merchants who have traded in both countries, are higher in France than in England; and it is no doubt upon this account that many British fubjects chufe rather to employ their capitals in a country where trade is in difgrace, than in one where it is highly refpected. The wages of labour are lower in France than in England. When you go from Scotland to England, the difference which you may remark between the dress and countenance of the common people in the one country and in the other, fufficiently indicates the difference in their condition. The contraft is ftill greater when you return from France. France, though no doubt a richer country than Scotland, feems not to be going forward fo faft. It is a common and even a popular opinion in the country, that it is going backwards; an opinion which, I apprehend, is ill-founded even with regard to France, but which nobody can poffibly entertain with regard to Scotland, who fees the country now, and who faw it twenty or thirty years ago.



The province of Holland, on the other hand, CHA P. in proportion to the extent of its territory and the number of its people, is a richer country than England. The government there borrow at two per cent., and private people of good credit at three. The wages of labour are said to be higher in Holland than in England, and the Dutch, it is well known, trade upon lower profits than any people in Europe. The trade of Holland, it has been pretended by fome people, is decaying, and it may perhaps be true that fome particular branches of it are fo. But thefe fymptoms feem to indicate fufficiently that there is no general decay. When profit diminishes, merchants are very apt to complain that trade decays; though the diminution of profit is the natural effect of its profperity, or of a greater ftock being employed in it than before. During the late war the Dutch gained the whole carrying trade of France, of which they still retain a very large fhare. The great property which they poffefs both in the French and English funds, about forty millions, it is faid, in the latter (in which I fufpect, however, there is a confiderable exaggeration); the great fums which they lend to private people in countries where the rate of intereft is higher than in their own, are circumstances which no doubt demonftrate the redundancy of their ftock, or that it has increafed beyond what they can employ with tolerable profit in the proper business of their own country; but they do not demonstrate that that bufinefs has decreased.

As the capital of a


BOOK private man, though acquired by a particular I. trade, may increase beyond what he can employ in it, and yet that trade continue to increase too; fo may likewise the capital of a great nation.

In our North American and West Indian colonies, not only the wages of labour, but the interest of money, and confequently the profits of stock, are higher than in England. In the different colonies both the legal and the market rate of intereft run from fix to eight per cent. High wages of labour and high profits of flock, however, are things, perhaps, which scarce ever go together, except in the peculiar circumstances of new colonies. A new colony must always for fome time be more under-stocked in proportion to the extent of its territory, and more under-peopled in proportion to the extent of its stock, than the greater part of other countries. They have more land than they have ftock to cultivate. What they have, therefore, is applied to the cultivation only of what is moft fertile and most favourably fituated, the land near the fea fhore, and along the banks of navigable rivers. Such land too is frequently purchased at a price below the value even of its natural produce. Stock employed in the purchase and improvement of fuch lands muft yield a very large profit, and confequently afford to pay a very large intereft. Its rapid accumulation in fo profitable an employment enables the planter to increase the number of his hands fafter than he can find them in a new fettlement. Thofe whom he can find, therefore, are very liberally rewarded.


As the colony increases, the profits of stock gra- CHAP. dually diminish. When the most fertile and best fituated lands have been all occupied, lefs profit can be made by the cultivation of what is inferior both in foil and fituation, and less interest can be afforded for the stock which is fo employ." ed. In the greater part of our colonies, accordingly, both the legal and the market rate of interest have been confiderably reduced during the courfe of the prefent century. As riches, improvement, and population have increafed, intereft has declined. The wages of labour do not fink with the profits of ftock. The demand for labour increases with the increase of stock whatever be its profits; and after thefe are diminished, stock may not only continue to increase, but to increase much fafter than before. It is with induftrious nations who are advancing in the acquifition of riches, as with industrious individuals. A great ftock, though with fmall profits, generally increases fafter than a small ftock with great profits. Money, fays the proverb, makes money. When you have got a little, it is often eafy to get more. The great difficulty is to get that little. The connection between the increase of ftock and that of induftry, or of the demand for ufeful labour, has partly been explained already, but will be explained more fully hereafter in treating of the accumulation of stock.

The acquifition of new territory, or of new branches of trade, may fometimes raise the profits of ftock, and with them the intereft of money,


BOOK even in a country which is faft advancing in the acquifition of riches. The flock of the country not being fufficient for the whole acceffion of bufinefs, which fuch acquifitions prefent to the different people among whom it is divided, is applied to those particular branches only which afford the greatest profit. Part of what had before been employed in other trades, is neceffarily withdrawn from them, and turned into fome of the new and more profitable ones. In all thofe old trades, therefore, the competition comes to be lefs than before. The market comes to be lefs fully fupplied with many different forts of goods. Their price neceffarily rifes more or lefs, and yields a greater profit to those who deal in them, who can, therefore, afford to borrow at a higher intereft. For fome time after the conclufion of the late war, not only private people of the best credit, but fome of the greatest companies in London, commonly borrowed at five per cent. who before that had not been used to pay more than four, and four and a half per cent. The great acceffion both of territory and trade, by our acquifitions in North America and the Weft Indies, will fufficiently account for this, without fuppofing any diminution in the capital ftock of the fociety. So great an acceffion of new business to be carried on by the old ftock, muft neceffarily have diminished the quantity employed in a great number of particular branches, in which the competition being lefs, the profits must have been greater. I fhall hereafter have occafion to mention the reasons which


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