An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader macos .TXT) 📕

great towns, but between all the considerable villages, and even to many farmhouses in the

country, nearly in the same manner as the Rhine and the Maese do in Holland at present. The

extent and easiness of this inland navigation was probably one of the principal causes of the

early improvement of Egypt.

The improvements in agriculture and manufactures seem likewise to have been of very great

antiquity in the provinces of Bengal, in the East Indies, and in some of the eastern provinces

of China, though the great extent of this antiquity is not authenticated by any histories of

whose authority we, in this part of the world, are well assured. In Bengal, the Ganges, and

several other great rivers, form a great number of navigable canals, in the same manner as the

Nile does in Egypt. In the eastern provinces of China, too, several great rivers form, by their

different branches, a multitude of canals, and, by communicating with one another, afford an

inland navigation much more extensive than that either of the Nile or the Ganges, or, perhaps,

than both of them put together. It is remarkable, that neither the ancient Egyptians, nor the

Indians, nor the Chinese, encouraged foreign commerce, but seem all to have derived their

great opulence from this inland navigation.

All the inland parts of Africa, and all that part of Asia which lies any considerable way north

of the Euxine and Caspian seas, the ancient Scythia, the modern Tartary and Siberia, seem, in

all ages of the world, to have been in the same barbarous and uncivilized state in which we

find them at present. The sea of Tartary is the frozen ocean, which admits of no navigation ;

and though some of the greatest rivers in the world run through that country, they are at too

great a distance from one another to carry commerce and communication through the greater

part of it. There are in Africa none of those great inlets, such as the Baltic and Adriatic seas in

Europe, the Mediterranean and Euxine seas in both Europe and Asia, and the gulfs of Arabia,

Persia, India, Bengal, and Siam, in Asia, to carry maritime commerce into the interior parts of

that great continent; and the great rivers of Africa are at too great a distance from one another

to give occasion to any considerable inland navigation. The commerce, besides, which any

nation can carry on by means of a river which does not break itself into any great number of

branches or canals, and which runs into another territory before it reaches the sea, can never

be very considerable, because it is always in the power of the nations who possess that other

territory to obstruct the communication between the upper country and the sea. The navigation

of the Danube is of very little use to the different states of Bavaria, Austria. and Hungary, in

comparison of what it would be, if any of them possessed the whole of its course, till it falls

into the Black sea.

CHAPTER IV.

OF THE ORIGIN AND USE OF MONEY.

When the division of labour has been once thoroughly established, it is but

a very small part of a man’s wants which the produce of his own labour can

supply. He supplies the far greater part of them by exchanging that surplus

part of the produce of his own labour, which is over and above his own

consumption, for such parts of the produce of other men’s labour as he has

occasion for. Every man thus lives by exchanging, or becomes, in some

measure, a merchant, and the society itself grows to be what is properly a

commercial society.

But when the division of labour first began to take place, this power of

exchanging must frequently have been very much clogged and embarrassed in

its operations. One man, we shall suppose, has more of a certain commodity

than he himself has occasion for, while another has less. The former,

consequently, would be glad to dispose of; and the latter to purchase, a

part of this superfluity. But if this latter should chance to have nothing

that the former stands in need of, no exchange can be made between them. The

butcher has more meat in his shop than he himself can consume, and the

brewer and the baker would each of them be willing to purchase a part of it.

But they have nothing to offer in exchange, except the different productions

of their respective trades, and the butcher is already provided with all the

bread and beer which he has immediate occasion for. No exchange can, in this

case, be made between them. He cannot be their merchant, nor they his

customers ; and they are all of them thus mutually less serviceable to one

another. In order to avoid the inconveniency of such situations, every

prudent man in every period of society, after the first establishment of the

division of labour, must naturally have endeavoured to manage his affairs in

such a manner, as to have at all times by him, besides the peculiar produce

of his own industry, a certain quantity of some one commodity or other, such

as he imagined few people would be likely to refuse in exchange for the

produce of their industry. Many different commodities, it is probable, were

successively both thought of and employed for this purpose. In the rude ages

of society, cattle are said to have been the common instrument of commerce ;

and, though they must have been a most inconvenient one, yet, in old times,

we find things were frequently valued according to the number of cattle

which had been given in exchange for them. The armour of Diomede, says

Homer, cost only nine oxen; but that of Glaucus cost a hundred oxen. Salt is

said to be the common instrument of commerce and exchanges in Abyssinia ; a

species of shells in some parts of the coast of India ; dried cod at

Newfoundland; tobacco in Virginia; sugar in some of our West India colonies;

hides or dressed leather in some other countries; and there is at this day a

village In Scotland, where it is not uncommon, I am told, for a workman to

carry nails instead of money to the baker’s shop or the alehouse.

In all countries, however, men seem at last to have been determined by

irresistible reasons to give the preference, for this employment, to metals

above every other commodity. Metals can not only be kept with as little loss

as any other commodity, scarce any thing being less perishable than they

are, but they can likewise, without any loss, be divided into any number of

parts, as by fusion those parts can easily be re-united again; a quality

which no other equally durable commodities possess, and which, more than any

other quality, renders them fit to be the instruments of commerce and

circulation. The man who wanted to buy salt, for example, and had nothing

but cattle to give in exchange for it, must have been obliged to buy salt to

the value of a whole ox, or a whole sheep, at a time. He could seldom buy

less than this, because what he was to give for it could seldom be divided

without loss; and if he had a mind to buy more, he must, for the same

reasons, have been obliged to buy double or triple the quantity, the value,

to wit, of two or three oxen, or of two or three sheep. If, on the contrary,

instead of sheep or oxen, he had metals to give in exchange for it, he could

easily proportion the quantity of the metal to the precise quantity of the

commodity which he had immediate occasion for.

Different metals have been made use of by different nations for this

purpose. Iron was the common instrument of commerce among the ancient

Spartans, copper among the ancient Romans, and gold and silver among all

rich and commercial nations.

Those metals seem originally to have been made use of for this purpose in

rude bars, without any stamp or coinage. Thus we are told by Pliny (Plin.

Hist Nat. lib. 33, cap. 3), upon the authority of Timaeus, an ancient

historian, that, till the time of Servius Tullius, the Romans had no coined

money, but made use of unstamped bars of copper, to purchase whatever they

had occasion for. These rude bars, therefore, performed at this time the

function of rnoney.

The use of metals in this rude state was attended with two very considerable

inconveniences ; first, with the trouble of weighing, and secondly, with

that of assaying them. In the precious metals, where a small difference in

the quantity makes a great difference in the value, even the business of

weighing, with proper exactness, requires at least very accurate weights and

scales. The weighing of gold, in particular, is an operation of some nicety

In the coarser metals, indeed, where a small error would be of little

consequence, less accuracy would, no doubt, be necessary. Yet we should find

it excessively troublesome if every time a poor man had occasion either to

buy or sell a farthing’s worth of goods, he was obliged to weigh the

farthing. The operation of assaying is still more difficult, still more

tedious ; and, unless a part of the metal is fairly melted in the crucible,

with proper dissolvents, any conclusion that can be drawn from it is

extremely uncertain. Before the institution of coined money, however, unless

they went through this tedious and difficult operation, people must always

have been liable to the grossest frauds and impositions; and instead of a

pound weight of pure silver, or pure copper, might receive, in exchange for

their goods, an adulterated composition of the coarsest and cheapest

materials, which had, however, in their outward appearance, been made to

resemble those metals. To prevent such abuses, to facilitate exchanges, and

thereby to encourage all sorts of industry and commerce, it has been found

necessary, in all countries that have made any considerable advances towards

improvement, to affix a public stamp upon certain quantities of such

particular metals, as were in those countries commonly made use of to

purchase goods. Hence the origin of coined money, and of those public

offices called mints; institutions exactly of the same nature with those of

the aulnagers and stamp-masters of woollen and linen cloth. All of them are

equally meant to ascertain, by means of a public stamp, the quantity and

uniform goodness of those different commodities when brought to market.

The first public stamps of this kind that were affixed to the current

metals, seem in many cases to have been intended to ascertain, what it was

both most difficult and most important to ascertain, the goodness or

fineness of the metal, and to have resembled the sterling mark which is at

present affixed to plate and bars of silver, or the Spanish mark which is

sometimes affixed to ingots of gold, and which, being struck only upon one

side of the piece, and not covering the whole surface, ascertains the

fineness, but not the weight of the metal. Abraham weighs to Ephron the four

hundred shekels of silver which he had agreed to pay for the field of

Machpelah. They are said, however, to be the current money of the merchant,

and yet are received by weight, and not by tale, in the same manner as

ingots of gold and bars of silver are at present. The revenues of the

ancient Saxon kings of England are said to have been paid, not in money, but

in kind, that is, in victuals and provisions of all sorts. William the

Conqueror introduced the custom of paying them in money. This money,

however, was for a long time, received at the exchequer,