An Inquiry into the Principles of Political Oeconomy (Vol. 1 of 2) / Being an essay on the science of domestic policy in free nations. In which are particularly considered population, agriculture, trade, industry, money, coin, interest, circulation, banks, exchange, public credit, and taxes

by Sir James Steuart

ERRATA.

Page.	Line.
3.	[32].		* advantages, r. disadvantages
73.	[27].		were, r. from
85.	[28].		* This is the, r. This is not the
89.	[12].		* supposed to come, r. subsisted
116.	[12].		productions, r. spontaneous productions
145.	[9].		* trial, r. Tirol
147.	[30].		its, r. their
172.	[1].		* earth, r. cart
208.	[29].		third, r. fourth
210.	[6].		lands, r. hands
214.	[4].		moving, r. removing.
217.	[2].		turns, r. terms
229.	[8].		* usefulness, r. uselesness
236.	[19].		* management, r. mismanagement
266.	[21], 22.		they correspond, r. it corresponds
290.	[2].		easily bred, r. bred early
339.	[21].		* preventing, r. promoting
382.	[10].		* work, r. worth
391.	[8].		* next, r. net
425.	[27].		discovering, r. discoursing
430.	[29].		eiò, r. ciò
Ditto	[30].		misuro, r. misura
501.	[3].		* physical, r. political
Ditto	[27].		competition, r. composition.
515.	[17].		proportions, r. propositions
552.	[12].		* bringing, r. coining
601.	[9].		* diminution, r. denomination
626.	[31].		* revolution, r. institution
637. 638.	ult. [prim].	}	formally, r. formerly

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CONTENTS
OF THE
FIRST VOLUME.

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BOOK I.
Of Population and Agriculture.
Introduction,	Page [1]
Chap. I. Of the government of mankind,	[6]
Chap. II. Of the spirit of a people,	[8]
Chap. III. Upon what principles, and from what natural causes, do mankind multiply; and what are the effects of procreation in countries where numbers are not found to increase?	[17]
Chap. IV. Continuation of the same subject, with regard to the natural and immediate effects of agriculture, as to population,	[21]
Chap. V. In what manner, and according to what principles and political causes does agriculture augment population?	[26]
Chap. VI. How the wants of mankind promote their multiplication,	[31]
Chap. VII. The effects of slavery upon the multiplication and employment of mankind,	[36]
Chap. VIII. What proportion of inhabitants is necessary for agriculture, and what proportion may be usefully employed in every other occupation?	[41]
Chap. IX. What are the principles which regulate the distribution of inhabitants into farms, hamlets, villages, towns, and cities?	[46]
Chap. X. Of the consequences which result from the reparation of the two principal classes of a people, the farmers and the free hands, with regard to their dwelling,	[50]
Chap. XI. Of the distribution of inhabitants into classes; of the employments, and multiplication of them,	[59]
Chap. XII. Of the great advantage of combining a well digested theory, and a perfect knowledge[knowledge] of facts, with the practical part of government, in order to make a people multiply,	[67]
Chap. XIII. Continuation of the same subject, with regard to the necessity of having exact lists of births, deaths, and marriages, for every class of inhabitants in a modern society,	[75]
Chap. XIV. Of the abuse of agriculture and population,	[82]
Chap. XV. Application of the above principles to the state of population in Great Britain,	[95]
Chap. XVI. Why are some countries found very populous, in respect of others, equally well calculated for improvement?	[101]
Chap. XVII. In what manner, and according to what proportion, do plenty and scarcity affect a people?	[109]
Chap. XVIII. Of the causes and consequences of a country being fully peopled,	[114]
Chap. XIX. Is the introduction of machines into manufactures prejudicial to the interest of a state, or hurtful to population?	[119]
Chap. XX. Miscellaneous observations upon agriculture and population,	[124]
Chap. XXI. Recapitulation of the first book,	[149]

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BOOK II.
Of Trade and Industry.
Introduction,	[161]
Chap. I. Of the reciprocal connections between trade and industry,	[166]
Chap. II. Of Demand,	[172]
Chap. III. Of the first principles of bartering, and how this grows into trade,	[175]
Chap. IV. How the prices of goods come to be determined by trade,	[181]
Chap. V. How foreign trade opens to an industrious people, and the consequences of it to the merchants who set it on foot,	[184]
Chap. VI. Consequences of the introduction of a passive foreign trade among a people who live in simplicity and idleness,	[190]
Chap. VII. Of double competition,	[196]
Chap. VIII. Of what is called expence, profit, and loss,	[205]
Chap. IX. The general consequences resulting to a trading nation, upon the opening of an active foreign commerce,	[206]
Chap. X. Of the balance of work and demand,	[216]
Chap. XI. Why in time this balance is destroyed,	[225]
Chap. XII. Of the competition between nations,	[232]
Chap. XIII. How far the form of government of a particular country may be favourable or unfavourable to a competition with other nations, in matters of commerce,	[237]
Chap. XIV. Security, ease, and happiness, no inseparable concomitants of trade and industry,	[250]
Chap. XV. A general view of the principles to be attended to by a statesman, who resolves to establish trade and industry upon a lasting footing,	[261]
Chap. XVI. Illustration of some principles laid down in the former chapter, relative to the advancement and support of foreign trade,	[272]
Chap. XVII. Symptoms of decay in foreign trade,	[278]
Chap. XVIII. Methods of lowering the price of manufactures, in order to make them vendible in foreign markets,	[283]
Chap. XIX. Of infant, foreign and domestic trade, with respect to the several principles which influence them,	[301]
Chap. XX. Of luxury,	[306]
Chap. XXI. Of physical and political necessaries,	[311]
Chap. XXII. Preliminary reflections upon inland commerce,	[319]
Chap. XXIII. When a nation, which has enriched herself by a reciprocal commerce in manufactures with other nations, finds the balance of trade turn against her, it is her interest to put a stop to it altogether,	[328]
Chap. XXIV. What is the proper method to put a stop to a foreign trade in manufactures, when the balance of it turns against a nation?	[336]
Chap. XXV. When a rich nation finds her foreign trade reduced to the articles of natural produce, what is the best plan to be followed? And what are the consequences of such a change of circumstances?	[343]
Chap. XXVI. Of the vibration of the balance of wealth between the subjects of a modern state,	[359]
Chap. XXVII. Circulation, and the balance of wealth, objects worthy of the attention of a modern statesman,	[374]
Chap. XXVIII. Circulation considered with regard to the rise and fall of the price of subsistence and manufactures,	[394]
Chap. XXIX. Circulation with foreign nations, the same thing as the balance of trade,	[414]
Chap. XXX. Miscellaneous questions and observations relative to trade and industry,	[426]
Chap. XXXI. Recapitulation of the second book,	[482]

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BOOK III.
OF MONEY AND COIN.
PART I.
The principles of money deduced, and applied to the coin of Great Britain.
Introduction,		[523]
Chap. I. Of money of accompt,		[526]
	What money is	[——]
	Definitions	[——]
	Money a scale for measuring value,	[——]
	Principles which determine the value of things	[527]
	Prices not regulated by the quantity of money,	[——]
	But by the relative proportion between commodities and the wants of mankind,	[528]
	Necessity of distinguishing between money and price,	[529]
	Money of accompt what, and how contrived,	[——]
	Examples of it,	[531]
	Bank money,	[——]
	Angola money,	[——]
Chap. II. Of artificial or material money,		[——]
	Usefulness of the precious metals for the making money,	[532]
	Adjusting a standard, what?	[533]
	Debasing and raising a standard, what?	[534]
	The alteration of a standard, how to be discovered?	[——]
	Of alloy,	[——]
Chap. III. Incapacities of the metals to perform the office of an invariable measure of value,		[535]
	1. They vary in their relative value to one another,	[——]
	All measures ought to be invariable,	[——]
	Consequences when they vary,	[536]
	Defects of a silver standard,	[537]
	Arguments in favour of it,	[——]
	Answers to these arguments,	[538]
	Usefulness of an universal measure,	[539]
	They have two values, one as coin, and one as metals,	[540]
	Smaller inconveniences attending material money,	[——]
	It wears in circulation,	[——]
	It is inaccurately coined,	[541]
	The coinage adds to its value, without adding to its weight,	[——]
	The value of it may be arbitrarily changed,	[——]
	Trade profits of the smallest defects in the coin,	[——]
Chap. IV. Methods which may be proposed for lessening the several inconveniences to which material money is liable,		[542]
	Use of theory in political matters,	[——]
	Five remedies against the effects of the variation between the value of the metals,	[——]
	Remedies against the other inconveniences,	[544]
	Against the wearing of the coin,	[——]
	Against inaccuracy of coinage,	[——]
	Against the expence of coinage,	[——]
	Against arbitrary changes in the value of coin,	[545]
Chap. V. Variations to which the value of the money-unit is exposed from every disorder in the coin,		[——]
	How the market price of the metals is made to vary,	[——]
	The variation ought to be referred to the rising metal, and never to the sinking,	[546]
	How the money-unit of accompt is made to vary in its value from the variation of the metals,	[547]
	Consequences of this,	[——]
	The true unit is the mean proportional between the value of the metals,	[——]
	The unit to be attached to the mean proportion upon a new coinage, not after the metals have varied,	[548]
	It is better to affix the unit to one, than to both metals,	[549]
	Variation to which the money-unit is exposed from the wearing of the coin,	[——]
	Variations to which the money-unit is exposed, from the inaccuracy in the fabrication of the money,	[550]
	Variation to which the money-unit is exposed from the imposition of coinage,	[551]
	When coinage is imposed, bullion must be cheaper than coin,	[——]
	Exception from this rule,	[552]
	Variation to which the money-unit is exposed by the arbitrary operations of Princes in raising and debasing the coin,	[——]
Chap. VI. How the variations in the intrinsic value of the unit of money must affect all the domestic interests of a nation,		[553]
	How this variation affects the interests of debtors and creditors,	[——]
	A mistake of Mr. Locke,	[555]
	When the value of the unit is diminished, creditors lose; when it is augmented, debtors lose,	[556]
Chap. VII. Of the disorder in the British coin, so far as it occasions the melting down or the exporting of the specie,		[558]
	Defects in the British coin,	[——]
	Of the standard of the English coin and money-unit,	[——]
	A pound sterling by statute contains 1718.7 grains troy fine silver,	[559]
	The guinea 118.644 grains fine gold,	[——]
	Coinage in England free,	[——]
	The standard not attached to the gold coin till the year 1728,	[560]
	Consequences of this regulation to debase the standard,	[——]
	That debtors will not pay in silver but in gold,	[——]
	That some people consider coin as money of accompt,	[561]
	Others consider it as a metal,	[——]
	Operations of money-jobbers, when the coin deviates from the market proportion of the metals, or from the legal weight,	[562]
	They melt down when the metals in it are wrong proportioned,	[——]
	And when the coin is of unequal weight,	[——]
	Why silver bullion is dearer than coin,	[——]
	Because that species has risen in the market price as bullion, and not as coin,	[563]
	What regulates the price of bullion?	[564]
	1. The intrinsic value of the currency,	[——]
	2. A demand for exporting bullion,	[565]
	3. Or for making of plate,	[——]
	Exchange raises, and the mint price brings down bullion,	[——]
	Continuation of the operations of money-jobbers: their rule for melting the coin,	[566]
	The price in guineas equal to the price of shillings of 65 in the pound troy,	[——]
	When guineas may be melted down with profit,	[——]
	Silver is exported preferably to gold,	[567]
	This hurtful, when done by foreigners,	[——]
Chap. VIII. Of the disorder in the British coin, so far as it affects the value of the pound sterling currency,		[568]
	Two legal pounds sterling in England,	[——]
	And several others, in consequence of the wearing of the coin,	[569]
	Why any silver coin remains in England,	[——]
	Value of a pound sterling current determined by the operations of trade,	[——]
	To the mean value of all the currencies,	[570]
	Exchange a good measure for the value of a pound sterling,	[——]
	The use of paper money not hurtful in debasing the standard,	[571]
	The pound sterling not regulated by statute, but by the mean value of the current money,	[——]
	Why exchange appears so commonly against England,	[——]
	How the market price of bullion shews the value of the pound sterling,	[——]
	Shillings at present weigh no more than 1⁄65 of a pound troy,	[572]
	And are worn 4.29 troy grains lighter than their standard weight,	[——]
	A pound sterling worth, at present, no more than 1638 grains troy fine silver, according to the price of bullion,	[573]
	And according to the course of exchange,	[——]
	Shillings coined at 65 in the pound troy, would be in proportion with the gold,	[574]
	Which shews that the standard has been debased,	[——]
	And that the preserving it where it is, is no new debasement,	[——]
	Proof that the standard has been debased by law,	[575]
	And is at present reduced to the value of the gold,	[——]
Chap. IX. Historical account of the variations of the British coin,		[576]
	Purport of this treatise not to dictate, but to inquire,	[——]
	How the disorder in the coin may be remedied without inconveniences,	[——]
	By making the nation itself choose the remedy,	[577]
	If the present standard is departed from, every other that might be pitched on is arbitrary,	[——]
	People imagine the present standard is the same with that of Queen Elizabeth,	[578]
	Debasements of the standard during the reformation,	[——]
	Raised by Edward VI.	[——]
	Debased by Elizabeth,	[——]
	Supported by her successors,	[——]
	Until it was debased by the clipping, after the revolution,	[579]
	Lowndes’s scheme refuted by Locke: the standard raised to that of Elizabeth, and the consequences of that measure,	[580]
	Silver has been rising from the beginning of this century,	[——]
	The English standard has been debased by law, since 1726,	[——]
	The trading interest chiefly to be blamed for this neglect,	[581]
	Debasing the standard chiefly affects permanent contracts,	[——]
	And prevents prices from rising as they should do,	[——]
Chap. X. Of the disorder of the British coin, so far as it affects the circulation of gold and silver coin, and of the consequences of reducing guineas to twenty shillings,		[582]
	Why silver coin is so scarce,	[583]
	Consequences of fixing the guineas at 20 shillings, with regard to circulation,	[——]
	Will make coin disappear altogether,	[584]
	How light shillings are bought by weight,	[——]
	Consequences as to the circulation with merchants and bankers,	[585]
	That guineas would still pass current for 21 shillings,	[——]
	That the standard would be affixed to the light silver, as it was in the year 1695,	[——]
	That merchants would gain by it,	[586]
	Debtors would be ruined,	[——]
	Consequences as to the bank,	[——]
	Reducing guineas to 20 shillings is the same as making them a commodity,	[587]
Chap. XI. Method of restoring the money-unit to the standard of Elizabeth, and the consequences of that revolution,		[——]
	How to fix the pound sterling at the standard of Queen Elizabeth,	[——]
	The consequences of this reformation will be to raise the standard 5 per cent.	[588]
	Every interest in a nation equally intitled to protection,	[589]
	Those who suffer by the debasement of the standard,	[——]
	Ought only to benefit by the restitution,	[590]
	And not the whole class of creditors,	[——]
	Whose claim ought to be liable to a conversion,	[591]
	According to justice and impartiality,	[——]
Chap. XII. Objections stated against the principles laid down in this inquiry, and answers to them,		[592]
	That a pound will always be considered as a pound,	[593]
	That the standard is not debased at present, being fixed to the statute, not to the coin,	[——]
	That the pound sterling is virtually worth 1718.7 grains fine silver,	[——]
	That these principles imply a progressive debasement of the standard every new coinage,	[594]
	That the same argument holds for debasing the standard measures of weights, capacity, &c.	[——]
	That the wearing of the coin falls on them who possess it at the crying down, but does not debase the standard,	[——]
	That inland dealings, not the price of bullion, or course of exchange, regulate the standard,	[——]
	That public currency supports the value of the coin,	[——]
	That this scheme is the same with that of Lowndes,	[——]
	Answers to these objections,	[595]
	That a pound will be considered at its worth by all debtors, and by those who buy,	[——]
	If the standard was affixed to the statute, people would be obliged to pay by weight,	[——]
	No body can be obliged to pay 1718.7 grains fine silver for a pound sterling,	[596]
	That it is not the regulation of the mint, but the disorder of the coin which must debase the standard,	[——]
	That people are obliged to measure by the standard weight, but are not obliged to pay by the standard pound,	[597]
	That the loss upon light money when called in, does not fall upon the possessors,	[——]
	That inland dealings cannot support the standard where there are money-jobbers or foreign commerce,	[599]
	That public currency supports the authority of the coin, not the value of the pound sterling,	[601]
	That the scheme is similar, though not the same with that of Lowndes,	[602]
	Lowndes reasoned upon wrong principles,	[——]
	Locke attended to supporting the standard, without attending to the consequences,	[——]
	Political circumstances are greatly changed,	[604]
	Reconciliation of the two opinions,	[606]
	The question in dispute is not understood,	[607]
	The true characteristic of a change upon the standard is not attended to,	[——]
	Principles will not operate their effects without the assistance of the state,	[608]
	When people understand one another, they soon agree,	[——]
	Permanent contracts are confounded with sale in the dispute,	[609]
	The interest of creditors is always the predominant, and determines the opinion of a nation,	[611]
	Application of principles to the operation the Dutch have lately made upon their coin,	[612]
	All decisions in political questions depend upon circumstances,	[613]
Chap. XIII. In what sense the standard may be said to have been debased by law; and in what sense it may be said to have suffered a gradual debasement by the operation of political causes,		[614]
	These proportions appear contradictory,	[——]
	Debased by law, when affixed to the gold,	[615]
	Effects which the changing the proportion of the metals has upon melting the coin, and regulating payments,	[——]
	Payments made by bankers regulate all others,	[——]
	The standard gradually debased by the rising of the silver,	[616]
	The proportion of the metals in 1728, supposed to have been as 15.21 is to 1.,	[——]
	By what progression the silver standard has been debased,	[——]
	The standard of Elizabeth, for the pound sterling, was 1718.7 grains silver, and 157.6 ditto gold, both fine,	[617]
	The gold standard of her pound worth, at present, 2285.5 grains fine silver,	[——]
	The variation of the metals has produced three different standards of Elizabeth,	[——]
	One worth £ 1 0 11⅜ present currency,	[618]
	Another worth £ 1 7 10⅞ ditto,	[——]
	And a third worth £ 1 4 5⅛ ditto,	[——]
	The last is the true standard of Elizabeth for the pound sterling, and worth at present 2002 grains fine silver, and 138 ditto gold,	[——]
	But may vary at every moment,	[619]
	Gold rose during the whole 17th century,	[——]
	And silver has risen since the beginning of this century,	[——]
	Some positions recapitulated,	[620]
Chap. XIV. Circumstances to be attended to in a new regulation of the British coin,		[621]
	The adopting of the standard of Elizabeth, has an air of justice,	[——]
	Advantages of that of Mary I.,	[——]
	Conversions necessary in every case,	[622]
	Every interest within the state to be examined,	[——]
	Landed interest examined,	[——]
	Interest of the public creditors examined,	[625]
	Interest of trade examined,	[628]
	Interest of buyers and sellers examined,	[——]
	Interest of the bank examined,	[629]
	Inconveniences attending all innovations,	[632]
	Argument for preserving the standard at the present value,	[——]
	That every change must either hurt the bank, or the public creditors,	[——]
	A more easy method of making a change upon the standard,	[633]
Chap. XV. Regulations which the principles of this inquiry point out as expedient to be made, by a new statute for regulating the British coin,		[634]
	1. Regulation as to the standard,	[——]
	2. As to the weight,	[——]
	3. Mint price,	[——]
	4. Denominations,	[635]
	5. Marking the weight on the coins,	[——]
	6. Liberty to stipulate payment in gold or silver,	[——]
	7. Creditors may demand payment, half in gold, and half in silver,	[——]
	8. Regulations as to sale,	[——]
	9. Ditto as to payments to and from banks, &c.,	[——]
	10. All coin to be of full weight, when paid away,	[——]
	11. Liberty to melt or export coin, but death to clip or wash,	[——]
	12. Rule for changing the mint price of the metals,	[636]
	13. When to change the mint price,	[——]
	14. Rule for changing the denomination of the coins,	[——]
	15. How contracts are to be acquitted, after a change of the denomination has taken place,	[——]
	16. The weight of the several coins never to be changed, except upon a general recoinage of one denomination at least,	[638]
	How these regulations will preserve the same value to the pound sterling at all times, and how fractions in the denomination of coin may be avoided,	[——]
	17. Small coins to be current only for 20 years, and large coins for 40 years, or more,	[639]
	18. All foreign coins to pass for bullion only,	[——]
	Consequences of these regulations,	[——]

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AN

INQUIRY

INTO THE

PRINCIPLES OF POLITICAL OECONOMY.

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BOOK I.
OF POPULATION AND AGRICULTURE.

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