John Locke

Some Considerations of the Consequences of the Lowering of Interest and the Raising the Value of Money

In a letter sent to a Member of Parliament, November 7 1691 London
Printed for Awnsham and John Churchill, at the Black Swan in Pater-Noster-Row,


These Notions, concerning Coinage, having for the main, as you know, been put into Writing above Twelve Months since; as those other concerning Interest, a great deal above to many Years: I put them now again into your Hands with a Liberty (since you will have it so) to communicate them further, as you please. If, upon a Review, you continue your favourable Opinion of them, and nothing less than Publishing will satisfie you, I must desire you to remember, That you must be answerable to the World for the Stile; which is such as a man writes carelesly to his Friend, when he seeks Truth, not Ornament; and studies only to be right, and to be understood. I have since you saw them last Year, met with some new Objections in Print, which I have endeavoured to remove; and particularly, I have taken into Consideration a Printed Sheet, entituled, Remarks upon a Paper given in to the Lords, &c. Because one may naturally suppose, That he that was so much a Patron of that Cause would omit nothing that could be said in favour of it. To this I must here add, That I am just now told from Holland, That the States, finding themselves abused by Coining a vast quantity of their base [Schillings] Money, made of their own Ducatoons, and other finer Silver, melted down; have put a stop to the Minting of any but fine Silver Coin, till they should settle their Mint upon a new Foot.

I know the sincere Love and Concern you have for your Country, puts you constantly upon casting about on all hands for any means to serve it; and will not suffer you to overlook any thing you conceive may be of any the least use, though offer'd you from the meanest Capacities: You could not else have put me upon looking out my old Papers concerning the reducing of Interest to 4 per Cent. which have so long lain by forgotten, Upon this new Survey of them I find not my thought now to differ from those I have near Twenty years since: They have to me still the Appearance of Truth; nor should I otherwise venture them so much as to your sight. If my Notions are wrong, my Intention, I am sure, is right: And whatever I have failed in, I shall at least let you see with what Obedience I am,


Your most humble Servant.


I HAVE so little Concern in Paying or Receiving of Interest, that were I in no more Danger to be misled by Inability and Ignorance, than I am to be biassed by Interest and Inclination, I might hope to give you a very perfect and clear Account of the Consequences of a Law, to reduce Interest to Four per Cent. But since you are pleased to ask my Opinion, I shall endeavour fairly to state this Matter of Use with the best of my Skill.

The first thing to be consider'd, is, Whether the Price of the Hire of Money can be regulated by Law. And to that I think, generally speaking, one may say, 'tis manifest it cannot. For since it's impossible, to make a Law that shall hinder a Man from giving away his Money or Estate to whom he pleases, it will be impossible, by any Contrivance of Law, to hinder Men, skill'd in the Power they have over their own Goods, and the ways of Conveying them to others, to purchase Money to be Lent them at what Rate soever their Occasions shall make it necessary for them to have it. For it is to be Remembred, That no Man borrows Money, or pays Use, out of mere Pleasure: 'Tis the want of Money drives Men to that Trouble and Charge of Borrowing: And proportionably to this Want, so will every one have it, whatever Price it cost him. Wherein the Skilful, I say, will always so manage it, as to avoid the Prohibition of your Law, and keep out of its Penalty, do what you can.

What then will be the unavoidable Consequences of such a Law?

1. It will make the Difficulty of Borrowing and Lending much greater; whereby Trade (the Foundation of Riches) will be obstructed.

2. It will be a Prejudice to none but those who most need Assistance and Help, I mean Widows and Orphans, and others uninstructed in the Arts and Managements of more skilful Men; whose Estates lying in Money, they will be sure, especially Orphans, to have no more Profit of their Money, than what Interest the Law barely allows.

3. It will mightily encrease the Advantage of Bankers and Scriveners, and other such expert Brokers: Who skilled in the Arts of putting out Money according to the true and natural Value, which the present State of Trade, Money and Debts, shall always raise Interest to, they will infallibly get, what the true Value of Interest shall be, above the Legal. For Men finding the Convenience of Lodging their Money in Hands, where they can be sure of it at short Warning, the Ignorant and Lazy will be forwardest to put it into these Mens hands, who are known willingly to receive it, and where they can readily have the whole, or a part, upon any sudden Occasion, that may call for it.

4. I fear I may reckon it as one of the probable Consequences of such a Law, That it is likely to cause great Perjury in the Nation; a Crime, than which nothing is more carefully to be prevented by Lawmakers, not only by Penalties, that shall attend apparent and proved Perjury; but by avoiding and lessening, as much as may be, the Temptations to it. For where those are strong, (as they are where Men shall Swear for their own Advantage) there the fear of Penalties to follow will have little Restraint; especially if the Crime be hard to be proved. All which I suppose will happen in this Case, where ways will be found out to receive Money upon other Pretences than for Use, to evade the Rule and Rigour of the Law: And there will be secret Trusts and Collusions amongst Men, that though they may be suspected, can never be proved without their own Confession. I have heard very sober and observing Persons complain of the Danger Mens Lives and Properties are in, by the frequency and fashionableness of Perjury amongst us. Faith and Truth, especially in all Occasions of attesting it upon the solemn Appeal to Heaven by an Oath, is the great Bond of Society: This it becomes the Wisdom of Magistrates carefully to support, and render as sacred and awful in the Minds of the People as they can. But if ever Frequency of Oaths shall make them be looked on as Formalities of Law, or the Custom of straining of Truth (which Mens Swearing in their own Cases is apt to lead them to) has once dipt Men in Perjury, and the Guilt with the Temptation has spread it self very wide, and made it almost fashionable in some Cases, it will be impossible for the Society (these Bonds being dissolved) to subsist: All must break in Pieces, and run to Confusion. That Swearing in their own Case is apt, by degrees to lead Men into as little Regard of such Oaths, as they have of their ordinary Talk, I think there is reason to suspect, from what has been observed in something of that kind, Masters of. Ships are a sort of Men generally Industrious and Sober, and I suppose may be thought, for their Number and Rank, to be equally Honest to any other sort of Men: And yet, by the Discourse I have had with Merchants in other Countries, I find, That they think in those Parts, they take a great Liberty in their Custom-house Oaths, to that degree, that I remember I was once told, in a Trading Town beyond Sea, of a Master of a Vessel, there esteemed a sober and fair Man, who yet could not hold saying, God forbid that a Custom-house Oath should be a Sin. I say not this, to make any Reflection upon a sort of Men, that I think as uncorrupt as any other; and who, I am sure, ought in England to be cherished and esteem'd as the most industrious and most beneficial of any of its Subjects. But I could not forbear to give this here as an Instance, how dangerous a Temptation it is, to bring Men customarily to Swear, where they may have any Concernment of their own. And it will always be worthy the Care and Consideration of Law-makers, to keep up the Opinion of an Oath High and Sacred, as it ought to be, in the Minds of the People; which can never be done, where frequency of Oaths, biassed by Interest, has establisht a neglect of them; and Fashion (which it seldom fails to do) has given Countenance to what Profit rewards.

But that Law cannot keep Men from taking more Use than you set (the want of Money being that alone which regulates its Price) will perhaps appear, if we consider how hard it is to set a Price upon Wine or Silks, or other unnecessary Commodities; but how impossible it is to set a Rate upon Victuals in a time of Famine. For Money being an universal Commodity, and as necessary to Trade, as Food is to Life, every body must have it, at what Rate they can get it; and unavoidably pay dear when it is scarce, and Debts, no less than Trade, have made Borrowing in Fashion. The Bankers are a clear Instance of this: For some Years since, the Scarcity of Money having made it in England worth really more than Six per Cent. most of those that had not the Skill to let it for more than Six per Cent. and secure themselves from the Penalty of the Law, put it in the Bankers Hands, where it was ready at their Call, when they had an Opportunity of greater Improvement. So that the Rate you set, profits not the Lenders, and very few of the Borrowers, who are fain to pay the Price for Money, that Commodity would bear, were it left free; and the Gain is only to the Banker. And should you lessen the Use to Four Per Cent. the Merchant, or Tradesman, that Borrows, would not have it one jot cheaper, than he has now; but probably these two ill effects would follow. First, That he would pay dearer; and Secondly, That there would be less Money left in the Country to drive the Trade. For the Bankers paying at most but Four per Cent. and receiving from Six to Ten Per Cent. or more, at that low Rate could be content to have more Money lye dead by them, than now when it is higher: By which means there would be less Money stirring in Trade, and a greater Scarcity; which would raise it upon the Borrower by this Monopoly. And what a part of our Treasure their skill and management, joined with others laziness or want of skill, is apt to draw into their Hands, is to be known by those vast Sums of Money, they were found to owe at the shutting up of the Exchequer. And though it be very true, yet it is almost beyond Belief, That one private Goldsmith of London should have Credit upon his single Security, (being usually nothing but a Note under one of his Servants Hands) for above Eleven hundred thousand Pounds at once. The same Reasons, I suppose, will still keep on the same Trade: And when you have taken it down by Law to that Rate, no body will think of having more than Four per Cent. of the Banker, though those who have need of Money, to employ it in Trade, will not then, any more than now, get it under Five or Six, or as some pay, Seven or Eight. And if they had then, when the Law permitted Men to make more Profit of their Money, so large a Proportion of the Cash of the Nation in their Hands, who can think, but that by this Law it should be more driven into Lombard-street now? there being many now who lend them at Four or Five Per Cent. who will not Lend to others at Six. It would therefore perhaps, bring down the Rate of Money to the Borrower, and certainly distribute it better to the Advantage of Trade in the Country, if the legal Use were kept pretty near to the natural; (by natural Use, I mean that Rate of Money which the present Scarcity of it makes it naturally at, upon an equal Distribution of it) for then Men being Licensed by the Law to take near the full natural Use, will not be forward to carry it to London, to put it into the Bankers Hands; but will Lend it to their Neighbours in the Country, where it is convenient for Trade it should be. But if you lessen the Rate of Use, the Lender, whose Interest it is to keep up the Rate of Money, will rather lend it to the Banker, at the legal Interest, than to the Tradesman or Gentleman, who when the Law is broken, shall be sure to pay the full natural Interest, or more; because of the ingrossing by the Banker, as well as the Risque in transgressing the Law. Whereas were the natural Use suppose Seven per Cent. and the legal Six; First, the Owner would not venture the Penalty of the Law for the gaining one in Seven, that being the utmost his Money would yield: Nor would the Banker venture to Borrow, where his Gains would be but One Per Cent. nor the Money'd Man lend him, what he could make better Profit of legally at Home. All the Danger lies in this, That your Trade should suffer if your being behind-hand has made the natural Use so high, that your Tradesman cannot live upon his Labour, but that your Rich Neighbours will so undersell you, that the Return you make will not amount to pay the Use and afford a Livelihood. There is no way to recover from this, but by a general Frugality and Industry; or by being Masters of the Trade of some Commodity, which the World must have from you at your Rate, because it cannot be other where supplied.

Now I think the Natural Interest of Money is raised two ways: First, When the Money of a Country is but little in proportion to the Debts of the Inhabitants one amongst another. For suppose Ten thousand pounds were sufficient to manage the Trade of Bermudas, and that the Ten first Planters carried over Twenty thousand pound, which they Lent to the several Tradesmen and Inhabitants of the Country, who living above their Gains had spent Ten thousand pound of this Money, and it were gone out of the Island. 'Tis evident, that should all the Creditors at once call in their Money, there would be a great scarcity of Money, when that employed in Trade must be taken out of the Tradesmens Hands to pay Debts; or else the Debtors want Money, and be exposed to their Creditors, and so Interest will be high. But this seldom happening, that all, or the greatest part of the Creditors do at once call for their Money, unless it be in some great and general Danger, is less and seldomer felt, than the following, unless where the Debts of the People are grown to a greater proportion, for that constantly causing more Borrowers, than there can be Lenders, will make Money scarce, and consequently Interest high. Secondly, That which constancy raises the Natural Interest of Money, is, when Money is little in proportion to the Trade of a Country. For in Trade every Body calls for Money according as he wants it, and this disproportion is always felt. For if Englishmen owed in all but One Million, and there were a Million of Money in England, the Money would be well enough proportioned to the Debts: But if Two Millions were necessary to carry on the Trade, there would be a Million wanting, and the price of Money would be raised, as it is of any other Commodity in a Market, where the Merchandize will not serve half the Customers, and there are two Buyers for one Seller.

'Tis in vain therefore to go about effectually to reduce the price of Interest by a Law; and you may as rationally hope to set a fixt Rate upon the Hire of Houses, or Ships, as of Money. He that wants a Vessel, rather than lose his Market, will not stick to have it at the Market Rate, and find ways to do it, with security to the Owner, though the Rate were limited by a Law: And he that wants Money, rather than lose his Voyage, or his Trade, will pay the Natural Interest for it; and submit to such ways of Conveyance, as shall keep the Lender out of the reach of the Law. So that your Act, at best, will serve only to increase the Arts of Lending, but not at all lessen the Charge of the Borrower: He 'tis likely shall with more trouble, and going farther about, pay also the more for his Money; unless you intend to break in only upon Mortgages and Contracts already made, and (which is not to be supposed) by a Law, postfactum, void Bargains lawfully made, and give to Richard what is Peters Due, for no other Reason, but because one was Borrower, and the other Lender.

But supposing the Law reach'd the intention of the Promoters of it; and that this Act be so contrived, that it forced the Natural price of Money, and hindred its being by any Body Lent at a higher Use, than Four Pound Per Cent. which is plain it cannot.

Let us in the next place see, what will be the Consequences of it.

1. It will be a loss to Widows, Orphans, and all those who have their Estate in Money, one third of their Estates: which will be a very hard case upon a great number of People, and it is warily to be consider'd by the Wisdom of the Nation, whether they will thus at one blow, fine and impoverish a great and innocent part of the People, who having their Estates in Money, have as much Right to make as much of their Money, as it is worth, (for more they cannot) as the Landlord has to let his Land for as much as it will yield. To Fine Men one Third of their Estates, without any Crime or Offence committed, seems very hard.

2. As it will be a considerable Loss and Injury to the mony'd Man, so it will be no Advantage at all to the Kingdom. For so Trade be not Cramp'd, and the Exportation of our Native Commodities and Manufactures not hindred, it will be no matter to the Kingdom, who amongst our selves Gets or Loses: only common Charity teaches, that those should be most taken care ofby the Law, who are least capable of taking care for themselves.

3. It will be a Gain to the Borrowing Merchant, For if he Borrow at Four per Cent. and his Returns be Twelve per Cent. he will have Eight Per Cent. and the Lender Four: Whereas now they divide the profit equally at Six Per Cent. But this neither Gets nor Loses the Kingdom in your Trade, supposing the Merchant and Lender to be both Englishmen: only it will as I have said, transfer a third part of the Mony'd Mans Estate, who has nothing else to live on, into the Merchants Pocket; and that without any Merit in the one, or Transgression in the other. Private mens interests ought not thus to be neglected, nor sacrificed to any thing but the manifest advantage of the Publick. But in this case it will be quite the contrary. This loss to the mony'd Men will be a prejudice to Trade: Since it will discourage Lending at such a disproportion of Profit, to Risque; as we shall see more by and by, when we come to consider of what consequence it is to encourage Lending, that so none of the Money of the Nation may lie dead, and thereby prejudice Trade.

4. It will hinder Trade. For there being a certain proportion of Money necessary for driving such a proportion of Trade, so much Money of this as lies still, lessens so much of the Trade. Now it cannot be rationally expected, but that where the Venture is great, and the Gains small, (as it is in Lending in England upon low Interest) many will choose rather to hoard up their Money, than venture it abroad on such Terms. This will be a loss to the Kingdom, and such a loss, as here in England ought chiefly to be looked after: For we having no Mines, nor any other way of getting, or keeping of Riches amongst us but by Trade, so much of our Trade as is lost, so much of our Riches must necessarily go with it; and the over-ballancing of Trade between us and our Neighbours, must inevitably carry away our Money, and quickly leave us Poor, and exposed. Gold and Silver though they serve for few yet they command all the conveniencies of life; and therefore in a plenty of them consists Riches.

Every one knows that Mines alone furnish these: But withal 'tis observable that most Counties stored with them by Nature are poor. The digging and refining of these Metals taking up the Labour, and wasting the Number of the People. For which reason the wise Policy of the Chineses will not suffer the Mines they have to be wrought. Nor indeed, things rightly considered, do Gold and Silver drawn out of the Mine equally Enrich, with what is got by Trade. He that would make the lighter Scale preponderate to the opposite, will not so soon do it, by adding encrease of new Weight to the emprier, as if he took out of the heavier what he adds to the lighter, for then half so much will do it. Riches do not consist in having more Gold and Silver, but in having more in proportion, than the rest of the World, or than our Neighbours, whereby we are enabled to procure to our selves a greater Plenty of the Conveniencies of Life than comes within the reach of Neighbouring kingdoms and States, who, sharing the Gold and Silver of the World in a less proportion, want the means of Plenty and Power, and so are Poorer. Nor would they be one jot the Richer, if by the discovery of new Mines the quantity of Gold and Silver in the World becoming twice as much as it is, their shares of them should be doubled. By Gold and Silver in the World I must be understood to mean, not what lies hid in the Earth; but what is already out of the Mine in the Hands and Possessions of Men. This, if well considered, would be no small encouragement to Trade, which is a surer and shorter way to Riches than any other, where it is managed with Skill and Industry.

In a Country not furnished with Mines there are but two ways of growing Rich, either Conquest, or Commerce. By the first the Romans made themselves Masters of the Riches of the World; but I think that in our present circumstances, no Body is vain enough to entertain a Thought of our reaping the Profits of the World with our Swords, and making the Spoil and Tribute of Vanquished Nations, the Fund for the supply of the Charges of the Government, with an overplus for the wants, and equally craving Luxury, and fashionable Vanity of the People.

Commerce therefore is the only way left to us, either for Riches or Subsistence, for this the advantages of our Situation, as well as the Industry and Inclination of our People, bold and skilful at Sea, do Naturally fit us: By this the Nation of England has been hitherto Supported, and Trade left almost to it self, and assisted only by the Natural Advantages above-mentioned, brought us in Plenty and Riches, and always set this kingdom in a rank equal, if not superior to any of its Neighbours: And would no doubt without any difficulty have continued it so, if the more enlarged, and better understood Interest of Trade, since the Improvement of Navigation, had not raised us many Rivals; and the amazing Politicks of some late Reigns, let in other Competitors with us for the Sea, who will be sure to seize to themselves whatever parts of Trade our is management, or want of Money, shall let slip out of our Hands: And when it is once lost, 'will be too late to hope, by a mistim'd Care, easily to retrieve it again. For the Currents of trade, like those of Waters, make themselves Channels, out of which they are afterwards as hard to be diverted, as Rivers that have worn themselves deep within their Banks.

Trade then is necessary to the producing of Riches, and Money necessary to the carrying on of Trade. This is principally to be looked after and taken Care of. For if this be neglected, we shall in vain, by Contrivances amongst our selves, and shuffling the little Money we have from one anothers Hands, endeavour to prevent our Wants: Decay of Trade will quickly waste all the Remainder; and then the Landed-Man, who thinks perhaps by the fall of Interest to raise the Value of his Land, will find himself cruelly mistaken, when the Money being gone, (as it will be if our Trade be not kept up) he can get neither Farmer to Rent, nor Purchaser to Buy his Land. Whatsoever therefore hinders the Lending of Money, injures Trade: And so the reducing of Money, to Four per Cent. which will discourage Men from Lending, will be a Loss to the Kingdom, in stopping so much of the Current of Money, which turns the Wheels of Trade. But all this upon a Supposition, that the Lender and Borrower are both English Men.

If the Lender be a Foreigner, by lessening Interest from Six to Four you get to the Kingdom one third part of the Interest we pay Yearly to Foreigners: Which let any one if he please think considerable. But then upon lessening Interest to Four per Cent. it is likely one of these things will happen. That either you fall the Price of your Native Commodities; Or lessen your Trade; Or else prevent not the high Use as you intended. For at the time of lessening your Interest, you want Money for your Trade, or you do not. If you do not, there is no need to prevent Borrowing at a high Rate of your Neighbours. For no Country borrows of its Neighbours but where there is need of Money for Trade: No body will borrow more of a Foreigner to let it lye still. And if you do want Money, Necessity will still make you borrow where you can, and at the Rates your Necessity, not your Laws, shall set: or else, if there be scarcity of Money, it must hinder the Merchant's Buying and Exportation, and the Artisan's Manufacture. Now the kingdom gets or loses by this (for no question the Merchant by low Interest gets all the while) only proportionably (allowing the Consumption of Foreign Commodities to be still the same) as the paying of Use to Foreigners carries away more or less of our Money, than want of Money and stopping our Trade keeps us from bringing in, by hindring our Gains, which can be only estimated by those, who know how much Money we borrow of Foreigners, and at what Rate; and too, what Profit in Trade we make of that Money.

Borrowing of Foreigners upon Interest it's true carries away some of our Gain: But yet upon Examination it will be found, that our growing Rich or Poor depends not at all upon our borrowing upon Interest or not; but only which is greater or less, our Importation or Exportation of consumable Commodities. For supposing Two Millions of Money will drive the Trade of England, and that we have Money enough of our own to do it; if we consume of our own Product and Manufacture, and what we Purchase by it of Foreign Commodities, one Million, but of the other Million consume nothing, but make a return of Ten per Cent. per An. we must then every Year be One hundred thousand pounds Richer, and our Stock be so much encreast: But if we Import more consumable Commodities than we Export, our Money must go out to pay for them, and we grow poorer. Suppose therefore ill Husbandry hath brought us to one Million Stock, and we borrow the other Million (as we must, or lose half our Trade) at Six per Cent. If we consume one moyety, and make still Ten per Cent. per An. Return of the other Million, the Kingdom gets Forty thousand pounds per An. though it pay Sixty thousand pound per An. Use. So that if the Merchant's Return be more than his Use, (which 'tis certain it is, or else he will not Trade) and all that is so Traded for on borrowed Money be but the over-ballance of our Exportation to our Importation, the kingdom gets by this Borrowing so much as the Merchant's Gain is above his Use. But if we borrow only for our own Expences, we grow doubly poor, by paying Money for the Commodity we consume, and Use for that Money; though the Merchant gets all this while, by making Returns greater than his Use. And therefore Borrowing of Foreigners in it self makes not the Kingdom rich or poor; for it may do either: But spending more than our Fruits or Manufactures will pay for, brings in Poverty, and Poverty Borrowing.

For Money, as necessary to Trade, may be doubly considered. First, as in his Hands that pays the Labourer and Landholder, (for here its motion terminates, and through whose Hands soever it passes between these, he is but a Broker) and if this Man want Money, (as for Example, the Clothier) the Manufacture is not made; and so the Trade stops, and is lost. Or Secondly, Money may be considered as in the Hands of the Consumer, under which Name I here reckon the Merchant who buys the Commodity when made, to Export: And if he want Money, the value of the Commodity when made is lessened, and so the Kingdom loses in the Price. If therefore Use be lessened, and you cannot tye Foreigners to your Terms, then the ill effects fall only upon your Landholders and Artisans: If Foreigners can be forc'd by your Law to Lend you Money only at your own Rate, or not Lend at all, is it not more likely they will rather take it home, and think it safer in their own Country at Four per Cent. than abroad in a decaying. Country? Nor can their over-plus of Money bring them to Lend to you, on your Terms: For when your Merchants want of Money shall have sunk the price of your Market, a Dutchman will find it more gains to buy your Commodity himself, than Lend his Money at Four per Cent. to an English Merchant to Trade with. Nor will the Act of Navigation hinder their coming, by making them come empty, since even already there are those who think, that many, who go for English Merchants, are but Dutch Factors, and Trade for others in their own Names. The Kingdom therefore will lose by this lowering of Interest, if it makes Foreigners withdraw any of their Money, as well as if it hinders any of your People from Lending theirs, where Trade has need of it.

In a Treatise writ on purpose for the bringing down of Interest, I find this Argument of Foreigners calling away their Money to the prejudice of our Trade, thus Answer'd, That the Money of Foreigners is not brought into the Land by ready Coin or Bullion, but by Goods or Bills of Exchange; and when it is paid must be returned by Goods or Bills of Exchange; and there will not be the less Money in the Land. I could not but wonder to see a Man, who undertook to write of Money and Interest, talk so directly besides the matter in the business of Trade. Foreigners Money, he says, is not brought into the Land by ready Coin or Bullion, but by Goods, or Bills of Exchange. How then do we come by Bullion or Money? For Gold grows not, that I know, in our Country, and Silver so little, that One hundred thousandth part of the Silver we have now in England, was not drawn out of any Mines in this Island. If he means that the Monied Man in Holland, who puts out his Money at Interest here, did not send it over in Bullion or Specie hither: That may be true or false; but either way helps not that Authors purpose. For if he paid his Money to a Merchant his Neighbour, and took his Bills for it here in England, he did the same thing as if he had sent over that Money, since he does but make that Merchant leave in England the Money which he has Due to him there, and otherwise would carry away. No, says our Author, he cannot carry it away, for, says he, when it is paid it must be returned by Goods, Or Bills of Exchange. It must not be paid and exported in ready Money, so says our Law indeed, but that is a Law to hedge in the Cookoe, and serves to no purpose. For if we Export not Goods, for which our Merchants have Money due to them in Holland, How can it be paid by Bills of Exchange? And for Goods, One hundred pounds worth of Goods can no where pay Two hundred pounds in Money. This being that which I find many Men deceive themselves with in Trade, it may be worth while to make it a little plainer.

Let us suppose England Peopled as it is now. and its Woollen Manufacture in the same State and Perfection, that it is at present; and that we, having no Money at all, trade with this our Woollen Manufacture for the value of Two hundred thousand pounds Yearly to Spain, where there actually is a Million in Money: Further let us suppose that we bring back from Spain Yearly in Oyl, Wine, and Fruit, to the value of One hundred thousand pounds, and continue to do this Ten Years together: 'Tis plain we have had for our two Millions value in Woollen Manufacture carried thither, one Million returned in Wine, Oyl, and Fruit: But what is become of t'other Million? Will the Merchants be content to lose it? That you may be sure they would not, nor have Traded on, if they had not every Year Returns made answering their Exportation. How then were the [ Returns made? In Money it is evident. For the Spaniards having in such a Trade, no Debts, nor the possibility of any Debts in England, cannot pay one Farthing of that other Million by Bills of Exchange: And having no Commodities that we will take off above the value of One hundred thousand pounds Per Annum, they cannot pay us in Commodities. From whence it necessarily follows, that the Hundred thousand pounds per Ann. wherein we over-ballance them in Trade, must be paid us in Money; and so at the Ten years end, their Million of Money, (though their Law make it Death to export it) will be all brought into England; as in truth, by this over-ballance of Trade, the greatest part of our Money hath been brought into England out of Spain.

Let us suppose our selves now possessed of this Million of Money; and Exporting Yearly out of England, to the several parts of the World, consumable Commodities to the value of a Million, but Importing Yearly in Commodities, which we consume amongst us to the value of Eleven hundred thousand pounds. If such a Trade as this be managed amongst us, and continue Ten Years, it is evident, that our Million of Money will at the end of the Ten Years be inevitably all gone from us to them, by the same way that it came to us; that is, by their overballance of Trade. For we Importing every Year One hundred thousand pounds worth of Commodities more than we Export, and there being no Foreigners that will give us One hundred thousand pounds every year for nothing, it is unavoidable, that One hundred thousand Pounds of our Money must go out every Year to pay for that over-plus, which our Commodities do not pay for. 'Tis ridiculous to say, that Bills of Exchange shall pay our Debts abroad: That cannot be, till Scrips of Paper can be made current Coin. The English Merchant, who has no Money owing him abroad, cannot expect to have his Bills paid there. Or if he has Credit enough with a Correspondent, to have his Bills answered: This pays none of the Debt of England, but only changes the Creditor. And if upon the general ballance of Trade, English Merchants owe to Foreigners One hundred thousand pounds, or a Million, if Commodities do not, our Money must go out to pay it, or else our Credit be lost, and our Trade stop, and be lost too.

A kingdom grows Rich, or Poor just as a Farmer doth, and no otherwise. Let us suppose the whole Isle of Portland one Farm; and that the Owner, besides what serves his Family, carries to Market to Weymouth and Dorchester, &c. Cattle, Corn, Butter, Cheese, Wooll, or Cloth, Lead and Tin, all Commodities produced and wrought within his Farm of Portland, to the value of a Thousand Pounds; yearly; and for this, brings whome in Salt, Wine, Oyl, Spice, Linnen and Silks, to the value of Nine hundred Pounds, and the remaining Hundred Pounds in Money. 'Tis evident he grows every year a hundred Pounds Richer, and so at the end often years will have clearly got a Thousand Pounds. If the Owner be a better Husband, and contenting himself with his Native Commodities, buy less Wine, Spice, and Silk, at Market, and so bring home Five hundred Pounds in Money yearly, instead of a Thousand Pounds, at the end of ten years he will have Five thousand pounds by him, and be so much Richer. He Dies, and his Son succeeds, a fashionable young Gentleman, that cannot Dine without Champane and Burgundy, nor Sleep but in a Damask Bed; whose Wife must spread a long Train of Brocard, and his Children be always in the newest French cut and Stuff. He being come to the Estate, keeps on a very busie Family. the Markets are weekly frequented, and the Commodities of his Farm carried out, and Sold, as formerly, but the Returns are made something different; the fashionable way of Eating, Drinking, Furniture and Clothing for himself and Family, requires more Sugar and Spice, Wine and Fruit, Silk and Ribons, than in his Fathers time; so that instead of Nine hundred Pounds per Annum, he now brings home of consumable Commodities, to the value of Eleven hundred Pounds yearly. What comes of this? He lives in Splendor, 'tis true, but this unavoidably carries away the Money his Father got, and he is every year an Hundred Pounds Poorer. To his Expences, beyond his Income, add Debauchery, Idleness, and Quarrels amongst his Servants, whereby his Manufactures are disturbed, and his Business neglected, and a general Disorder and Confusion through his whole Family and Farm: This will tumble him down the Hill the faster, and the Stock, which the Industry, Frugality, and good Order of his Father had laid up, will be quickly brought to an end, and he fast in Prison. A Farm and a kingdom in this respect differ no more than as greater and less. We may Trade, and be busie, and grow Poor by it, unless we regulate our Expences; If to this we are Idle, Negligent, Dishonest, Malitious, and disturb the Sober and Industrious in their Business, let it be upon what pretence it will, we shall Ruine the faster.

So that whatever this Author, or any one else may say, Money is brought into England by nothing but spending here less of Foreign Commodities, than what we carry to Market can pay for; Nor can Debts we owe to Foreigners be paid by Bills of Exchange, till our Commodities Exported, and Sold beyond Sea, have produced Money or Debts due there, to some of our Merchants. For nothing will pay Debts but Money or Moneys worth, which three or four Lines writ in Paper cannot be. If such Bills have an intrinsick value, and can serve instead of Money, why do we not send them to Market instead of our Cloth, Lead and Tin, and at an easier rate purchase the Commodities we want? All that a Bill of Exchange can do, is to direct to whom Money due, or taken up upon Credit in a Foreign Country, shall be paid: And if we trace it, we shall find, that what is owing already became so, for Commodities, or Money, carried from hence: And if it be taken up upon Credit, it must (let the Debt be shifted from one Creditor to another as often as you will) at last be paid by Money or Goods, carried from hence, or else the Merchant here must turn Bankrupt.

We have seen how Riches and Money are got, kept, or lost, in any Country; and that is by consuming less of Foreign Commodities than what, by Commodities or Labour is paid for. This is in the ordinary course of things: But where great Armies and Alliances are to be maintained abroad by Supplies sent out of any Country, there often, by a shorter and more sensible way, the Treasure is diminished. But this since the holy War, or at least since the Improvement of Navigation and Trade, seldom happening to England, whose Princes have found the enlarging their Power by Sea, and the securing our Navigation and Trade, more the Interest of this Kingdom than Wars or Conquests on the Continent, Expences in Arms beyond Sea have had little Influence on our Riches or Poverty. The next thing to be considered, is, how Money is necessary to Trade.

The Necessity of a certain Proportion of Money to Trade, (I conceive) lyes in this, That Money in its Circulation driving the several Wheels of Trade, whilst it keeps in that Channel (for some of it will unavoidably be dreined into standing Pools) is all shared between the Landholder, whose Land affords the Materials; The Labourer, who works them; The Broker, (i.e.) Merchant and Shopkeeper, who distributes them to those, that want them; And the Consumer, who spends them. Now Money is necessary to all these sorts of Men, as serving both for Counters and for Pledges, and so carrying with it even Reckoning, and Security, that he, that receives it, shall have the same Value for it again, of other things that he wants, whenever he pleases. The one of these it does by its Stamp and Denomination; the other by its intrinsick Value, which is its Quantity.

For Mankind, having consented to put an imaginary Value upon Gold and Silver by reason of their Durableness, Scarcity, and not being very liable to be Counterfeited, have made them by general consent the common Pledges, whereby Men are assured, in Exchange for them to receive equally valuable things to those they parted with for any quantity of these Metals. By which means it comes to pass, that the intrinsick Value regarded in these Metals made the common Barter, is nothing but the quantity which Men give or receive of them. For they having as Money no other Value, but as Pledges to procure, what one wants or desires; and they procuring what we want or desire, only by their quantity, 'tis evident, that the intrinsick Value of Silver and Gold used in Commerce is nothing but their quantity.

The Necessity therefore of a Proportion of Money to Trade, depends on Money not as Counters, for the Reckoning may be kept, or transferred by Writing; but on Money as a Pledge, which Writing cannot supply the place of: Since the Bill, Bond, or other Note of Debt, I receive from one Man will not be accepted as Security by another, he not knowing that the Bill or Bond is true or legal, or that the Man bound to me is honest or responsible; and so is not valuable enough to become a current Pledge, nor can by publick Authority be well made so, as in the Case of Assigning of Bills. Because a Law cannot give to Bills that intrinsick Value, which the universal Consent of Mankind has annexed to Silver and Gold. And hence Foreigners can never be brought to take your Bills, or Writings for any part of Payment, though perhaps they might pass as valuable Considerations among your own People, did not this very much hinder it, viz. That they are liable to unavoidable Doubt, Dispute, and Counterfeiting, and require other Proofs to assure us that they are true and good Security, than our Eyes or a Touchstone. And at best this Course, if practicable, will not hinder us from being Poor; but may be suspected to help to make us so, by keeping us from feeling our Poverty, which in Distress will be sure to find us with greater disadvantage. Though it be certain it is better than letting any part of our Trade fall for want of current Pledges; and better too than borrowing Money of our Neighbours upon Use, if this way of Assigning Bills can be made so easie, safe and universal at home, as to hinder it.

To return to the business in hand, and shew the necessity of a Proportion of Money to Trade. Every Man must have at least so much Money, or so timely Recruits, as may in hand, or in a short distance of time, satisfie his Creditor who supplies him with the necessaries of Life, or of his Trade. For no body has any longer these necessary Supplies, than he has Money, or Credit, which is nothing else but an Assurance of Money in some short time. So that it is requisite to Trade that there should be so much Money, as to keep up the Landholders, Labourers and Brokers Credit: And therefore ready Money must be constantly exchang'd for Wares and Labour, or follow within a short time after.

This shews the necessity of some Proportion of Money to Trade: But what Proportion that is, is hard to determine; because it depends not barely on the quantity of Money, but the quickness of its Circulation. The very same Shilling may at one time pay Twenty Men in Twenty days, at another, rest in the same Hands One hundred days together. This makes it impossible exactly to Estimate the quantity of Money needful in Trade: But to make some probable guess, we are to consider, how much Money it is necessary to suppose must rest constantly in each Man's Hands, as requisite to the carrying on of Trade.

First therefore the Labourers, living generally but from hand to mouth, and indeed, considered as Labourers in order to Trade, may well enough carry on their part, if they have but Money enough to buy Victuals, Cloaths, and Tools: All which may very well be provided, without any great Sum of Money lying still in their Hands. The Labourers therefore, being usually paid once a Week, (if the times of Payment be seldomer, there must be more Money for the carrying on this part of Trade) we may suppose there is constantly amongst them, one with another, or those who are to pay them, always one Weeks Wages in ready Money. For it cannot be thought, that all, or most of the Labourers pay away all their Wages constancy, as soon as they receive it, and live upon Trust till next Pay Day. This the Farmer and Tradesman could not well bear, were it every Labourer's Case, and every one to be trusted: And therefore they must of necessity keep some Money in their Hands, to go to Market for Victuals, and to other Tradesmen as poor as themselves, for Tools; and lay up Money too to buy Cloaths, or pay for those they bought upon Credit. Which Money thus necessarily resting in their Hands, we cannot imagine to be, one with another, much less than a Weeks Wages, that must be in their Pockets, or ready in the Farmer's Hands. For he who employs a Labourer at a Shilling per Day, and pays him on Saturday Nights, cannot be supposed constancy to receive that six Shillings just the same Saturday: It must ordinarily be in his Hands one time with another, if not a whole Week, yet several Days before.

This was the ordinary Course, whil'st we had Money running in the several Channels of Commerce: But that now very much failing, and the Farmer not having Money to pay the Labourer, supplies him with Corn, which in this great Plenty the Labourer will have at his own Rate, or else not take it of fhis Hands for Wages. And as for the Workmen, who are employed in our Manufactures, especially the Woollen one, these the Clothier, not having ready Money to pay, furnishes with the necessaries of Life, and so trucks Commodities for Work, which, such as they are, good or bad, the Workman must take at his Master's Rate, or sit still and starve: Whil'st by this means, this new sort of Ingrossers or Forestallers, having the feeding and supplying this numerous Body of Workmen out of their Warehouses, (for they have now Magazines of all sorts of Wares) set the Price upon the poor Landholder. So that the Markets now being destroyed, and the Farmer not finding vent there for his Butter, Cheese, Bacon, and Corn, &c. for which he was wont to bring home ready Money, must sell it to these Ingrossers, on their own Terms of Time and Rate; and allow it to their own Day-Labourers under the true Market-price. What kind of Influence this is like to have upon Land, and how this way Rents are like to be paid at Quarter-day, is easie to apprehend: And 'tis no wonder to hear every day of Farmers breaking, and running away. For if they cannot receive Money for their Goods at Market, 'will be impossible for them, to pay their Landlord's Rent. If any one doubt whether this be so, I desire him to enquire, how many Farmers in the West are broke and gone since Michaelmass last. Want of Money being to this degree, works both ways upon the Landholder. For first, the ingrossing Forestaller lets not the Money come to Market; but supplying the Workman, who is employed by him in Manufacture, with Necessaries, imposes his Price, and Forbearance on the Farmer, who cannot sell to the others. And the Labourer, who is employed by the Landholder in Husbandry, imposes also his Rate on him, for the Commodities he takes. For there being a want of Day Labourers in the Country, they must be humoured, or else they will neither work for you, nor take your Commodities for their Labour.

Secondly, as for the Landholder, since his Tenants cannot Coin their Rent just at quarter-day, but must gather it up by degrees, and lodge it with them till Pay-day; or borrow it of those, who have it lying by them, or do gather it up by degrees, which is the same thing, and must be necessarily so much Money for some time lying still. For all, that is paid in great Sums, must somewhere be gathered up by the Retail Incomes of a Trade, or else lie still too in great Sums, which is the same stop of Money, or a greater. Add to this, That to pay the Creditor, that lent him his Rent, he must gather up Money by degrees, as the Sale of his Commodities shall bring it in, and so makes a greater stop, and greater want of Money: Since the borowed Money that paid the Landholder the 25th of March, must be supposed to lye still some time in the Creditor's hand, before he lent it the Tenant; and the Money, that pays the Creditor three Months after, must lye still some time in the Tenant's. Nor does the Landlord pay away his Rent usually, as soon as he receives it, but by degrees, as his occasions call for it. All this consider'd we cannot but suppose, that between the Landlord and Tenant there must necessarily be at least a quarter of the Yearly Revenue of the Land constantly in their hands. Indeed considering, that most part of the Rents of England are paid at our Lady-day and Michaelmas, and that the same Money, which pays me my Rent from my Tenant the 25th of March, or thereabouts, cannot pay my next Neighbour his Rent from his Tenant at the same time, much less one more remote in another Country, it might seem requisite to suppose half the yearly Revenue of the Land to be necessarily employed in paying of Rent. For to say that some Tenants break and pay not their Rent at all, and others pay not till two, three, four, five, six, &c. Months after quarter-day, and so the Rent is not all paid at one time, is no more than to say, That there is Money wanting to the Trade. For if the Tenant fail the Landlord, he must fail his Creditor, and he his, and so on, till somebody break, and so Trade decay for want of Money. But since a considerable part of the Land of England is in the Owners Hands, who neither pay nor receive great Sums for it at a certain Day; and because too, (which is the chief Reason) we are not to consider here how much Money is in any one man's, or any one sort of mens hands at one time; for that at other times may be distributed into other hands, and serve other parts of Trade; but how much Money is necessary to be in each man's hands all the Year round, taking one time with another, (i.e.) having Three hundred pounds in his Hand one month, is to be reckoned as One hundred pound in his Hand three months, (and so proportionably) I think we may well suppose a quarter of the Yearly Revenue to be constancy in the Landlords or Tenants Hands.

Here, by the by, we may observe, That it were better for Trade, and consequently for everybody, (for more Money would be stirring, and less would do the business) if Rents were paid by shorter intervals than six months. For supposing I let a Farm at Fifty two pounds per An. if my Rent be paid half Yearly, there is required Twenty six pounds to be employed in the Payment ofit in one entire Sum, (if it be paid well, and if it be not paid well, for want of so much Money to be spared to that purpose, there is so much want of Money, and Trade is still endamag'd by it) a great part whereof must necessarily lie still before it come out of my Tenants Chest to my Hands: If it be paid once a quarter Thirteen pound alone will do it, and less Money is laid up for it, and stop'd a less while in its course: But should it be paid every Week, one single twenty Shillings will pay the Rent of Fifty two pounds per Annum, whence would follow this double benefit. First, That a great deal less Money would serve for the Trade of a Country. And Secondly, That less of the Money would lie still, the contrary whereof must needs happen, where growing Debts are to be paid at larger distances, and in greater Sums.

Thirdly, As for the Brokers, since they too must lay up the Money coming in by Retail, either to go to Market, and buy Wares, or to pay at the day appointed, which is often six Months, for those Wares which they have already, we cannot suppose them to have less by them, one with another, than One twentieth part of their yearly Returns. Whether the Money be their own, or they be Indebted so much or more, it matters not, if it be necessary they should have constancy by them, comparing one time with another, at least One twentieth part of their yearly Return.

Indeed in some great Towns, where the Bankers are ready at hand to buy Bills, or any other way to lend Money, for short time at great Interest, there perhaps the Merchant is not forced to keep so much Money by him, as in other places, where they have not such a Supply: But if you consider, what Money to do this must necessarily be constantly lodged in the Bankers Hands the case will be much the same.

To these Sums, if you add, what part of the Money of a Country Scholars of all sorts, Women, Gamesters, and great Mens menial Servants, and all such that do not contribute at all to Trade, either as Landholders, Labourers, or Brokers, will unavoidably have constantly in their Hands, it cannot well be thought, that less than One Fiftieth part of the Labourers Wages, One Fourth part of the Landholders yearly Revenue, and one Twentieth part of the Brokers yearly Returns in ready Money, will be enough to drive the Trade of any Country. At least, to put it beyond exception low enough, it cannot be imagin'd that less than one moiety of this, i.e. less than One hundredth part of the Labourers yearly Wages, One Eighth part of the Landholders yearly Revenue, and One Fortieth part of the Brokers yearly Returns, in ready Money, can be enough to move the several Wheels of Trade, and keep up Commerce in that Life and Thriving posture it should be; and how much the ready Cash of any Country is short. of this proportion, so much must the Trade be impair'd and hindred for want of Money.

But however these measures may be mistaken, this is evident, that the multiplying of Brokers hinders the Trade of any Country, by making the Circuit, which the Money goes, larger, and in that Circuit more stops, so that the Returns must necessarily be slower and scantier, to the prejudice of Trade: Besides that, they Eat up too great a share of the Gains of Trade, by that means Starving the Labourer, and impoverishing the Landholder, whose Interest is chiefly to be taken care of, it being a settled unmoveable Concernment in the Commonwealth.

If this be so, it is past question, that all Encouragement should be given to Artificers; and things so order'd, as much as might be, that those who make, should also Vend and Retail out their own Commodities, and they be hindred as much as possible from passing here at home, through divers Hands to the last Buyer. Lazy and Unworking Shopkeepers in this being worse than Gamesters, that they do not only keep so much of the Money of a Country constantly in their Hands, but also make the publick pay them for their keeping of it. Though Gaming too, upon the account of Trade (as well as other Reasons) may well deserve to be restrain'd: Since Gamesters, in order to their Play, keep great Sums of Money by them, which there lies Dead. For though Gamesters Money shift Masters oftener than any, and is tumbled up and down with every cast of a Die, yet as to the publick it lies perfectly still, and no more of it comes into Trade, than they spend in Eating or Wearing.

Here too we may observe, how much Manufacture deserves to be incourag'd: Since that part of Trade, though the most considerable, is driven with the least Money, especially if the Workmanship be more worth than the Materials. For to the Trade that is driven by Labour, and Handicrafts Men, One two and fiftieth part of the yearly Money paid them will be sufficient: But to a Trade of Commodities of our bare Native growth, much greater proportion of Money is requir'd.

Perhaps it will be wondred, why having given some estimate (how wide I know not) of the Money necessary in the Hands of the Landholder, Labourer, and Broker, to carry on Trade, I have said nothing of the Consumer, whom I had mentioned before. To this I Answer, There are so few Consumers, who are not either Labourers, Brokers, or Landholders, that they make a very inconsiderable part in the account. For those who immediately depend on the Landholder, as his Children and Servants, come in under that title, being maintain'd by the Rent of his Lands; and so of the rest.

By what has been said, we may see what Injury the Lowering of Interest is like to do us by hindering Trade, when it shall either make the Foreigner call home his Money, or your own People backward to Lend, the Reward not being judged proportionable to the risque.

There is another seeming Consequence, of the reducing of Money to a low Price, which at first sight has such an appearance of truth in it, that I have known it impose upon very able Men, and I guess it has no small Influence, at this time, in the promoting this alteration, and that is, That the lowering of Interest will raise the value of all other Things in proportion. For Money being the Counter-ballance to all other Things purchasable by it, and lying, as it were, in the opposite Scale of Commerce, it looks like a natural Consequence, that as much as you take off from the value of Money, so much you add to the price of other Things, which are exchang'd for it; the raising of the price of any thing being no more but the addition to its value in respect of Money, or, which is all one, lessening the value of Money. For Example: Should the value of Gold be brought down to that of Silver, One hundred Guineas would purchase little more Corn, Wool, or Land, than One hundred shillings, and so the Value of Money being brought lower, say they, the price of other Things will rise; and the falling of Interest from Six pound to Four pound per Cent. is taking away so much of the price of Money, and so consequently the lessening its value.

The mistake of this plausible way of Reasoning will be easily discovered, when we consider that the measure of the value of Money, in proportion to any thing purchasable by it, is the quantity of the ready Money we have, in Comparison with the quantity of that thing and its Vent; or which amounts to the same thing, The price of any Commodity rises or falls, by the proportion of the number of Buyers and Sellers; This rule holds Universally in all Things that are to be bought and Sold, bateing now and then an extravagant Phancy of some particular Person, which never amounts to so considerable a part of Trade as to make any thing in the account worthy to be thought an Exception to this Rule.

The Vent of any Thing depends upon its Necessity or Usefulness, as Convenience, or Opinion guided by Phancy or fashion shall determine.

The Vent of any Commodity comes to be increased or decreased as a greater part of the Running Cash of the Nation is designed to be laid out by several People at the same time rather in that, than another, as we see in the change of Fashions.

I shall begin first with the Necessaries or Conveniencies of Life, and the Consumable Commodities subservient thereunto; and shew, That the Value of Money in respect of those depends only on the Plenty or Scarcity of Money in proportion to the Plenty and Scarcity of those things, and not on what Interest shall by Necessity, Law, or Contract be at that time laid on the borrowing of Money: and then afterwards I shall shew that the same holds in Land.

There is nothing more confirmed by daily Experience, than that Men give any Portion of Money for whatsoever is absolutely necessary, rather than go without it. And in such things, the Scarcity of them alone makes their Prices. As for Example. Let us suppose half an Ounce of Silver, or half a Crown now in England, is worth a Bushel of Wheat: But should there be next Year a great scarcity of Wheat in England, and a proportionable want of all other Food, five Ounces of Silver would perhaps in Exchange purchase but one Bushel of Wheat: So that Money would be then nine Tenths less worth in respect of Food, though at the same value it was before, in respect of other Things, that kept their former proportion, in their quantity and Consumption.

By the like proportions of Increase and Decrease, does the value of Things, more or less convenient, rise and fall in respect of Money, only with this difference, that things absolutely necessary for Life must be had at any Rate; but Things convenient will be had only as they stand in preference with other Conveniencies: And therefore in any one of these Commodities, the value rises only as its quantity is less, and vent greater, which depends upon its being preferr'd to other Things in its Consumption. For supposing that at the same time that there is a great scarcity of Wheat, and other Grain, there were a considerable quantity of Oats, Men no question would give far more for Wheat than Oats, as being the healthier, pleasanter, and more convenient Food: But since Oats would serve to supply that absolute necessity of sustaining Life, Men would not rob themselves of all other Conveniencies of Life, by paying all their Money for Wheat, when Oats, that are cheaper, though with some inconvenience, would supply that Defect. It may then so happen at the same time, that half an Ounce of Silver, that the Year before would buy one Bushel of Wheat, will this Year buy but one Tenth of a Bushel: Half an Ounce of Silver, that the Year before would have bought three Bushels of Oats, will this year still buy one Bushel: And at the same time half an Ounce of Silver, that would the Year before have bought Fifteen pounds of Lead, will still buy the same quantity. So that at the same time Silver, in respect of Wheat, is nine Tenths less worth than it was, in respect of Oats two Thirds less worth, and in respect of Lead, as much worth as before.

The fall therefore or rise of Interest, making immediately by its change neither more nor less Land, Money, or any sort of Commodity in England, than there was before, alters not at all the Value of Money, in reference to Commodities. Because the measure of that is only the Quantity and Vent, which are not immediately chang'd by the Change of Interest. So far as the Change of Interest conduces in Trade to the bringing in or carrying out Money or Commodities, and so in time to the varying their Proportions here in England from what it was before, so far the change of Interest as all other things that promote or hinder Trade may alter the Value of Money in reference to Commodities. But that is not in this place to be considered.

This is perfectly the Value of Money in respect of Consumable Commodities. But the better to understand it in its full latitude, in respect both of consumable Commodities, and Land too, we must consider, First, That the Value of Land consists in this, That by its constant production of saleable Commodities it brings in a certain yearly Income. Secondly, the Value of Commodities consists in this, That as portable and useful things, they by their Exchange or Consumption, supply the Necessaries or Conveniencies of Life. Thirdly, In Money there is a double Value, answering to both of these, first as it is capable by its Interest to yield us such a yearly Income: and in this it has the Nature of Land, (the Income of one being called Rent, of the other Use) only with this difference, That the Land in its Soil being different, as some fertile, some barren; and the Products of it very various, both in their Sorts, goodness and vent, is not capable of any fixed estimate by its quantity: But Money, being constantly the same, and by its Interest giving the same sort of Product through the whole Country, is capable of having a fixed yearly Rate set upon it by the Magistrate; but Land is not. But though in the Uniformity of its legal Worth, One hundred pound of lawful Money being all through England equal in its current Value to any other One hundred pounds of lawful Money, (because by vertue of the Law it will every where pass for as much Ware or Debt, as any other Hundred pounds) is capable to have its yearly Hire valued better than Land: Yet in respect of the varying need, and necessity of Money, (which changes with the increase or decay of Money or Trade in a Country) it is as little capable to have its yearly Hire fixed by Law, as Land it self. For were all the Land in Rumney-Marsh, Acre for Acre, equally good, that is, did constantly produce the same quantity of equally good Hay or Grass, one as another, the Rent of it, under that Consideration of every Acre being of an equal Worth, would be capable of being regulated by Law; and one might as well Enact, That no Acre of Land in Rumney-Marsh shall be let for above Forty Shillings per An. as that no Hundred pound, shall be let for above Four pounds per An. But no body can think it fit (since by reason of the equal Value of that Land it can) that therefore the Rent of the Land in Rumney-Marsh should be Regulated by Law. For supposing all the Land in Rumney-Marsh, or in England, were all of so equal a Worth, that any one Acre, compared at the same time to any one other, were equally good in respect of its Product, yet the same Acre, compar'd with it self in different times, would not in respect of Rent be of equal Value. And therefore it would have been an unreasonable thing, if in the time of Henry 7. the Rent of Land in Rumney-Marsh had been settled by a Law, according to the judg'd Value of it at that time, and the same Law, limiting the Rent perhaps to 5 s. per Acre, have continued still. The Absurdity and Impracticableness of this every one sees at the first Proposal, and readily concludes within himself, that things must be left to find their own Price; and it is impossible in this their constant mutability for Human Foresight to set Rules and Bounds to their constantly-varying Proportion and Use, which will always regulate their Value.

They who consider things beyond their Names, will find, That Money, as well as all other Commodities, is liable to the same Changes and Inequalities: Nay in this respect of the Variety of its Value, brought in by time in the Succession of Affairs, the Rate of Money is less capable of being regulated by a Law in any Country than the Rent of Land. Because to the quick Changes, that happen in Trade, this too must be added, That Money may be brought in, or carried out of the kingdom, which Land cannot; and so that be truly worth 6 or 8 per Cent. this Year, which would yield but 4 the last.

2. Money has a Value, as it is capable by Exchange to procure us the Necessaries or Conveniencies of Life, and in this it has the Nature of a Commodity; only with this difference, That it serves us commonly by its Exchange, never almost by its Consumption. But though the use Men make of Money be not in its Consumption, yet it has not at all a more standing settled Value in Exchange with any other thing, than any other Commodity has, but a more known one, and better fitted by Name, Number, and Weight, to enable us to reckon what the Proportion of Scarcity and Vent of one Commodity is to another. For supposing, as before, that half an Ounce of Silver would last Year exchange for one Bushel of Wheat, or for 15 l. weight of Lead; if this Year Wheat be Ten times scarcer, and Lead in the same quantity to its Vent as it was, is it not evident that half an Ounce of Silver will still exchange for 15 l. of Lead, though it will exchange but for One Tenth of a Bushel of Wheat; and he that has use of Lead will as soon take 15 l. weight of Lead, as half an Ounce of Silver, for One Tenth of a Bushel of Wheat, and no more. So that if you say, that Money now is Nine Tenths less worth, than it was the former Year, you must say so of Lead too, and all other things, that keep the same Proportion to Money which they had before. The variation indeed is first and most taken notice {of} in Money: Because that is the universal measure by which People reckon, and used by every body in the valuing of all Things. For calling that half Ounce of Silver Half a Crown, they speak properly, and are readily understood when they say, Half a Crown, or two Shillings and six Pence, will now buy One Tenth of a Bushel of Wheat, but do not say, That 15 l. of Lead will now buy One Tenth of a Bushel of Wheat, because it is not generally used to this sort of Reckoning: nor do they say Lead is less worth than it was, though in respect of Wheat Lead be Nine Tenths worse than it was, as well as Silver: only by the Tale of Shillings we are better enabled to judge of it: Because these are measures whose Ideas by constant use are setled in every English Man's mind.

This I suppose is the true Value of Money when it passes from one to another in Buying and Selling; where it runs the same Changes of higher and lower, as any other Commodity doth: For one equal quantity whereof you shall receive in Exchange more, or less of another Commodity at one time, than you do at another. For a Farmer that carries a Bushel of Wheat to Market, and a Labourer that carries Half a Crown, shall find that the Money of one, as well as Corn of the other, shall at some times purchase him more or less Leather or Salt, according as they are in greater Plenty and Scarcity one to another. So that in Exchanging Coin'd Silver for any other Commodity, (which is buying and selling) the same measure governs the Proportion you receive, as if you exchang'd Lead, or Wheat, or any other Commodity. That which regulates the Price, i.e. the quantity given for Money (which is called buying and selling) for an other Commodity, (which is called Bartring) is nothing else but their quantity in Proportion to their vent. If then lowering of Use makes not your Silver more in Specie, or your Wheat or other Commodities less, it will not have any Influence at all to make it exchange for less of Wheat, or any other Commodity, than it will have on Lead, to make it exchange for less Wheat, or any other Commodity.

Money therefore in buying and selling being perfectly in the same Condition with other Commodities, and subject to all the same Laws of Value, let us next see how it comes to be of the same Nature with Land, by yielding a certain yearly Income, which we call Use or Interest. For Land produces naturally something new and profitable, and of Value to Mankind; but Money is a barren thing, and produces nothing, but by Compact transfers that Profit that was the Reward of one Man's Labour into another Man's Pocket. That which occasions this, is the unequal Distribution of Money; which Inequality has the same effect too upon Land, that it has upon Money. For my having more Money in my Hand than I can, or am disposed to use in buying and selling, makes me able to lend: And another's want of so much Money as he could employ in Trade, makes him willing to borrow. But why then, and for what Consideration doth he pay Use? For the same Reason, and upon as good Consideration, as the Tenant pays Rent for your Land. For as the unequal Distribution of Land, (you having more than you can or will manure, and another less) brings you a Tenant for your Land; and the same unequal Distribution of Money, (I having more than I can or will employ, and another less) brings me a Tenant for my Money: So my Money is apt in Trade, by the Industry of the Borrower, to produce more than Six per Cent. to the Borrower, as well as your Land, by the Labour of the Tenant, is apt to produce more Fruits, than his Rent comes to; and therefore deserves to be paid for, as well as Land, by a Yearly Rent. For though the Usurer's Money would bring him in no Yearly profit, if he did not lend it, (supposing he employs it not himself) and so his Six per Cent. may seem to be the Fruit of another Man's Labour, yet he shares not near so much of the profit of another Man's Labour, as he that lets Land to a Tenant. For without the Tenants Industry (supposing as before, the owner would not manage it himself) his Land would yield him little or no Profit. So that the Rent he receives is a greater Portion of the Fruit of his Tenants Labour, than the Use is at Six per Cent. For generally he that borrows One thousand pounds at Six per Cent. and so pays Sixty pounds per Annum Use, gets more above his Use in one Year, by his Industry, than he that Rents a Farm of Sixty pounds per Annum gets in two, above his Rent, though his Labour be harder.

It being evident therefore, that he that has skill in Traffick, but has not Money enough to Exercise it, has not only reason to borrow Money to drive his Trade, and get a livelihood; but as much Reason to pay Use for that Money; as he, who having skill in Husbandry but no Land of his own to employ it in, has not only reason to Rent Land, but to pay Money for the Use of it; It follows, that Borrowing Money upon Use is not only by the necessity of Affairs, and the Constitution of Humane Society, unavoidable to some Men, but that also to receive Profit for the Loan of Money, is as equitable and lawful, as receiving Rent for Land, and more tolerable to the Borrower, notwithstanding the Opinion of some over-scrupulous Men.

This being so, one would expect, that the rate of Interest should be the Measure of the value of Land in number of Years Purchase, for which the Fee is sold: For 100 l. per Annum being equal to 100 l. per Annum, and so on to peretuity; and 100 l. per Annum being the Product

of 1000 l. when Interest is at 10 per Cent.

of 1250 l. when Interest is at 8 per Cent.

of 1666 l. or thereabouts, when Interest is at 6 per Cent.

of 2000 l. when Money is at 5 per Cent.

of 2500 l. when Money is at 4 per Cent. One would conclude, I say, that Land should Sell in proportion to Use, according to these following Rates, viz. When Money is at 10 per Cent. for 10 years purchase.

8 12 1/2

6 16 2/3

5 20

4 25

But Experience tells us, that neither in queen Elizabeth, nor king James the First Reigns, when Interest was at Ten per Cent. was Land Sold for Ten; or when it was at Eight per Cent. for twelve and an half years purchase, or any thing near the low rate that high Use required (if it were true, that the rate of Interest govern'd the price of Land) any more than Land, now yields Twenty Five Years Purchase, because a great part of the Monied Men will now let their Money upon good Security at Four per Cent. Thus we see in fact how little this Rule has held at home: And he that will look into Holland, will find, that the Purchase of Land was not raised there, when their Interest fell. This is certain, and past doubt, that the legal Interest can never regulate the price of Land, since it is plain, that the price of Land has never changed with it in the several Changes have been made in the rate of Interest by Law: Nor now that the rate of Interest is by Law the same through all England, is the price of Land every where the same, it being in some parts constancy sold for four or five Years Purchase more than in others. Whether you or I can tell the Reason of this, it matters not to the question in hand: but it being really so, this is plain Demonstration against those, who pretend to advance and regulate the price of Land by a Law, concerning the Interest of Money.

But yet I will give you some of my Guesses, why the price of Land is not regulated (as at first sight it seems it should be) by the Interest of Money. Why it is not regulated by the legal Use is manifest, Because the rate of Money does not follow the Standard of the Law, but the price of the Market; and Men not observing the legal and forced, but the Natural and Current Interest of Money, regulate their Affairs by that. But why the rate of Land does not follow the Current Interest of Money requires a farther Consideration.

All Things that are Bought and Sold, raise and fall their price in proportion, as there are more Buyers or Sellers. Where there are a great many Sellers to a few Buyers, there use what Art you will, the thing to be Sold will be cheap. On the other side, turn the Tables, and raise up a great many Buyers for a few Sellers, and the same thing will immediately grow dear. This Rule holds in Land as well as all other Commodities, and is the Reason, why in England at the same time, that Land in some places is at seventeen or eighteen Years Purchase, it is about others, where there are profitable Manufactures, at two or three and wenty Years Purchase: Because there (Men thriving and getting Money by their Industry, and willing to leave their Estates to their Children in Land, as the surest, and most lasting Provision, and not so liable to Casualties as Money in untrading or unskilful Hands) there are many Buyers ready always to Purchase, but few Sellers. For the Land thereabout being already possessed by that sort of Industrious and Thriving Men, they have neither need, nor will, to Sell. In such places of Manufacture, the Riches of the one not arising from the squandring and waste of another, (as it doth in other places where Men live lazily upon the product of the Land) the Industry of the People bringing in increase of Wealth from remote Parts, makes plenty of Money there without the impoverishing of their Neighbours. And when the thriving Tradesman has got more, than he can well employ in Trade, his next Thoughts are to look out for a Purchase, but it must be a Purchase in the Neighbourhood, where the Estate may be under his Eye, and within convenient distance, that the Care and Pleasure of his Farm may not take him off from the Engagements of his Calling, nor remove his Children too far from him, or the Trade he breeds them up in. This seems to me the Reason, why in places, wherein thriving Manufactures have erected themselves, Land has been observed to Sell quicker, and for more Years Purchase than in other places, as about Hallifax in the North, Taunton and Exeter in the West.

This is that then, which makes Land, as well as other Things dear; plenty of Buyers, and but few Sellers: And so by the Rule of Contraries, plenty of Sellers and few Buyers makes Land cheap.

He that will justly estimate the value of any thing, must consider its quantity in proportion to its vent, for this alone regulates the Price. The value of any thing, compar'd with its self, or with a standing Measure, is greater, as its quantity is less in proportion to its vent: But in comparing it, or exchanging it with any other thing, the quantity and vent of that thing too must be allowed for in the computation of their Value. But because the desire of Money is constantly, almost every where the same, its vent varies very little, but as its greater scarcity enhanses its Price, and increases the scramble, there being nothing else that does easily supply the want of it. The lessening its quantity, therefore, always increases its Price, and makes an equal portion of it exchange for a greater of any other thing. Thus it comes to pass, that there is no manner of settled proportion between the value of an Ounce of Silver, and any other Commodity: For either varying its quantity in that Country, or the Commodity changing its quantity in proportion to its vent, their respective values change, i.e. less of one will barter for more of the other: Though in the ordinary way of speaking, 'tis only said, that the price of the Comnmodity, not of the Money is changed. For example, half an Ounce of Silver in England, will exchange sometimes for a whole Bushel of Wheat, sometimes for half, sometimes but a quarter, and this it does equally, whether by Use it be apt to bring in to the Owner Six in the Hundred of its own Weight per Annum, or nothing at all: It being only the change of the quantity of Wheat to its Vent, supposing we have still the same Summ of Money in the Kingdom; or else the change of the quantity of our Money in the Kingdom, supposing the quantity of Wheat, in respect to its Vent be the same too, that makes the change in the Price of Wheat. For if you alter the quantity or vent on either side, you presently alter the Price, but no other way in the World.

For it is not the Being, Adding, Increasing or Diminishing of any good quality in any Commodity, that makes its Price greater or less, but only as it makes its quantity or vent greater of less, in proportion one to another.

This will easily appear by Two or Three Instances.

1. The Being of any good, and useful quality in any thing neither increases its Price, nor indeed makes it have any Price at all, but only as it lessens its quantity or increases its vent, each of these in proportion to one another. What more useful or necessary things are there to the Being or Well-being of Men, than Air and Water, and yet these have generally no Price at all, nor yield any Money: Because their quantity is immensly greater than their vent in most places of the World. But, as soon as ever Water (for Air still offers it self every where, without restraint or inclosure, and therefore is no where of any Price) comes any where to be reduced into any proportion to its consumption, it begins presently to have a Price, and is sometimes sold dearer than Wine. Hence it is, that the best, and most useful things are commonly the cheapest; because, though their Consumption be great, yet the Bounty of Providence has made, their production large, and suitable to it.

2. Nor does the Adding an excellency to any Commodity, raise its Price, unless it increase its Consumption. For suppose there should be taught a way (which should be published to the knowledge of every one) to make a Medicine of Wheat alone, that should infallibly Cure the Stone: 'Tis certain the discovery of this quality in that Grain, would give it an excellency very considerable: And yet this would not increase the Price of it one Farthing in Twenty Bushels, because its quantity or vent would not hereby, to any sensible degree, be alter'd.

3. Neither does the Increasing of any good quality, in any sort of things make it yield more. For though Teasels be much better this Year, than they were last, they are not one jot dearer, unless they be fewer too, or the consumption of them greater.

4. Nor does the lessening the good qualities of any sort of Commodity lessen its Price; which is evident in Hops, that are usually dearest those Years they are worst. But if it happen to be a Species of Commodity, whose defects may be supplyed by some other, the making of it worse does lessen its Price; because it hinders its Vent. For if Rye should any Year prove generally smutty or grown, no question it would yield less Money than otherwise, because the deficiency of that might be, in some measure, made up by Wheat, and other Grain. But if it be a sort of Commodity whose use no other known thing can supply, 'tis not its being better or worse, but its quantity and vent is that alone which regulates, and determines its value.