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ftates of Bavaria, Auftria and Hungary, in com- C H A P.
Of the Origin and Ufe of Money.
WHEN the divifion of labour has been once C HAP.
thoroughly established, it is but a very
small part of a man's wants which the produce of his own labour can fupply. He fupplies the far greater part of them by exchanging that furplus part of the produce of his own labour, which is over and above his own confumption, for fuch parts of the produce of other men's labour as he has occafion for. Every man thus lives by exchanging, or becomes in fome meafure a merchant, and the fociety itself grows to be what is properly a commercial fociety.
But when the divifion of labour firft began to take place, this power of exchanging muft frequently have been very much clogged and embarraffed in its operations. One man, we fhali suppose, has more of a certain commodity than he himself has occafion for, while another has lefs. The former confequently would be glad to difpofe of, and the latter to purchase, a part of this fuperfluity. But if this latter fhould chance to have nothing that the former ftands in need of, no exchange can be made between them.
BOOK The butcher has more meat in his shop than he himself can confume, and the brewer and the baker would each of them be willing to purchase a part of it. But they have nothing to offer in exchange, except the different productions of their respective trades, and the butcher is already provided with all the bread and beer which he has immediate occafion for. No exchange can, in this cafe, be made between them. He cannot be their merchant, nor they his customers; and they are all of them thus mutually lefs ferviceable to one another. In order to avoid the inconveniency of fuch fituations, every prudent man in every period of fociety, after the firft establishment of the divifion of labour, muft naturally have endeavoured to manage his affairs in fuch a manner, as to have at all times by him, befides the peculiar produce of his own induftry, a certain quantity of fome one commodity or other, fuch as he imagined few people would be likely to refuse in exchange for the produce of their industry.
Many different commodities, it is probable, were fucceffively both thought of and employed for this purpose. In the rude ages of fociety, cattle are faid to have been the common inftrument of commerce; and, though they must have been a moft inconvenient one, yet in old times we find things were frequently valued according to the number of cattle which had been given in exchange for them. The armour of Diomede, fays Homer, coft only nine oxen; but that of Glaucus coft an hundred oxen. Salt is faid to be
be the common inftrument of commerce and ex- CHA P. changes in Abyffinia; a fpecies of shells in fome parts of the coaft of India; dried cod at Newfoundland; tobacco in Virginia; fugar in fome of our West India colonies; hides or dreffed leather in fome other countries; and there is at this day a village in Scotland where it is not uncommon, I am told, for a workman to carry nails instead of money to the baker's fhop or the ale houfe.
In all countries, however, men feem at laft to have been determined by irresistible reasons to give the preference, for this employment, to metals above every other commodity. Metals can not only be kept with as little lofs as any other commodity, fcarce any thing being lefs perishable than they are, but they can likewise, without any lofs, be divided into any number of parts, as by fufion those parts can easily be reunited again; a quality which no other equally durable commodities poffefs, and which more than any other quality renders them fit to be the inftruments of commerce and circulation. The man who wanted to buy falt, for example, and had nothing but cattle to give in exchange for it, must have been obliged to buy falt to the value of a whole ox, or a whole sheep, at a time. He could feldom buy lefs than this, because what he was to give for it could feldom be divided without lofs; and if he had a mind to buy more, he muft, for the fame reafons, have been obliged to buy double or triple the quantity, the value, to wit, of two or three oxen, or
BOOK of two or three fheep. If, on the contrary, inftead of sheep or oxen, he had metals to give in exchange for it, he could easily proportion the quantity of the metal to the precife quantity of the commodity which he had immediate occafion for.
Different metals have been made ufe of by different nations for this purpose. Iron was the common inftrument of commerce among the an tient Spartans; copper among the antient Romans; and gold and filver among all rich and commercial nations.
Thofe metals feem originally to have been made ufe of for this purpofe in rude bars, without any ftamp or coinage. Thus we are told by Pliny*, upon the authority of Timæus, an antient hiftorian, that, till the time of Servius Tullius, the Romans had no coined money, but made ufe of unftamped bars of copper, to purchafe whatever they had occafion for. These rude bars, therefore, performed at this time the function of money.
The use of metals in this rude ftate was attended with two very confiderable inconveniencies; firft, with the trouble of weighing; and, fecondly, with that of affaying them. In the precious metals, where a fmall difference in the quantity makes a great difference in the value, even the business of weighing, with proper exactnefs, requires at leaft very accurate weights and fcales. The weighing of gold in particular is an
*Plin. Hift. Nat. lib. 33. cap. 3.
operation of fome nicety. In the coarfer metals, CHA P. indeed, where a fmall error would be of little confequence, lefs accuracy would, no doubt, be neceffary. Yet we fhould find it exceffively troublesome, if every time a poor man had occafion either to buy or fell a farthing's worth of goods, he was obliged to weigh the farthing. The operation of affaying is still more difficult, ftill more tedious, and, unless a part of the metal is fairly melted in the crucible, with proper diffolvents, any conclufion that can be drawn from it, is extremely uncertain. Before the inftitution of coined money, however, unless they went through this tedious and difficult operation, people must always have been liable to the groffeft frauds and impofitions, and inftead of a pound weight of pure filver, or pure copper, might receive in exchange for their goods, an adulterated compofition of the coarseft and cheapest materials, which had, however, in their outward appearance, been made to resemble those metals. To prevent fuch abuses, to facilitate exchanges, and thereby to encourage all forts of industry and commerce, it has been found neceffary, in all countries that have made any confiderable advances towards improvement, to affix a public ftamp upon certain quantities of fuch particular metals, as were in thofe countries commonly made use of to purchafe goods. Hence the origin of coined money, and of those public offices called mints; inftitutions exactly of the fame nature with those of the aulnagers and ftampmafters of woollen