An Inquiry into the Nature and Causes of the Wealth of Nations

Adam Smith, from the Warren J. Samuels Portrait Collection
Smith, Adam
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Edwin Cannan, ed.
First Pub. Date
London: Methuen & Co., Ltd.
Pub. Date
5th edition.

Notes to the Electronic Edition:

* The Library of Economics and Liberty electronic edition is taken from Edwin Cannan's 1904 edition of Smith's Wealth of Nations, based on the 5th and last edition published in Smith's lifetime. The text and footnotes are presented here in full.

** Each footnote is marked in the text by a colored-coded superscript and in this footnote file according to its authorship as follows:

  • The author's original notes, color-coded blue in the text, are unbracketed and unlabeled below.
  • The editor's (Cannan's) notes, color-coded gold in the text, are bracketed below.
  • The website (Library of Economics and Liberty) Editor's notes, color-coded red in the text, are unbracketed and indicated by asterisks rather than numbers.

Editor's Introduction

1. [John Rae, Life of Adam Smith, 1895, p. 284.]

2. [Ibid., p. 285.]

3. [Ibid., p. 324.]

4. [Below, vol. i., IV.3.46; vol. ii., V.3.76-77.]

5. [See vol. ii., IV.7.52, as well as the passages referred to in the previous note.]

6. [Vol. ii., IV.7.42, 73, 150.]

7. [Rae, Life of Adam Smith, p. 362.]

8. [Ibid., p. 323.]

9. [Rae, p. 362.]

10. [Edition 4 alters 'this' to 'the'.]

11. [Edition 4 omits 'present'.]

12. [They are frequently found at the end of existing bound copies of the second edition. The statement in Rae, Life of Adam Smith, p. 362, that they were published in 1783 is a mistake; cp. the 'Advertisement to the Third Edition' above.]

13. [Rae, Life of Adam Smith, p. 362.]

14. [Corrected to 'Hope' in edition 5. The celebrated firm of Hope, merchant-bankers in Amsterdam, was founded by a Scotchman in the seventeenth century (see Sir Thomas Hope in the Dictionary of National Biography). Henry Hope was born in Boston, Mass., in 1736, and passed six years in a banking house to England before he joined his relatives in Amsterdam. He became a partner with them, and on the death of Adrian Hope the conduct of the whole of the business of the firm devolved upon him. When the French invaded Holland in 1794 he retired to England. He died on 25th February, 1811, leaving £1,160,000 (Gentleman's Magazine, March, 1811).]

15. [Most modern editions are copied from the fourth edition. Thorold Rogers' edition, however, though said in the preface to be copied from the fourth, as a matter of fact follows the third. In one instance, indeed, the omission of 'so' before 'as long as' at vol. i. I.5.29 (in the present edition), Rogers' text agreed with that of the fourth edition rather than the third, but this is an accidental coincidence in error; the error is a particularly easy one to make and it is actually corrected in the errata to the fourth edition, so that it is not really the reading of that edition. The fifth edition must not be confused with a spurious' fifth edition with additions' in 2 vols., 8vo, published in Dublin in 1793 with the 'Advertisement' to the third edition deliberately falsified by the substitution of 'fifth' for 'third' in the sentence 'To this third edition however I have made several additions'. It is perhaps the existence of this spurious 'fifth edition' which has led several writers (e.g., Rae, Life of Adam Smith, p. 293) to ignore the genuine fifth edition. The sixth edition is dated 1791.]

16. [Steuart's Principles was 'printed for A. Millar, and T. Cadell, in the Strand': and the Wealth of Nations 'for W. Strahan; and T. Cadell, in the Strand'.]

17. [Lectures on Justice, Police, Revenue and Arms, delivered in the University of Glasgow by Adam Smith. Reported by a student in 1763, and edited with an Introduction and Notes by Edwin Cannan, 1896, pp. 1, 3.]

18. [Lectures, pp. 3, 4.]

19. [Ibid., p. 154.]

20. [See James Bonar, Catalogue of the Library of Adam Smith, 1894.]

21. [Lectures, p. 157.]

22. [Ibid., p. 154.]

23. [Ibid., p. 156.]

24. [Lectures, p. 157.]

25. [Ibid., p. 163.]

26. [Ibid., pp. 172-3.]

27. [Ibid., p. 178.]

28. [Ibid., p. 182.]

29. [Lectures, p. 192.]

30. [Ibid., p. 195.]

31. [Ibid., p. 195.]

32. [Ibid., p. 196.]

33. [Ibid., p. 197.]

34. [Ibid., p. 199.]

35. [Ibid., p. 200.]

36. [Ibid., p. 204.]

37. [Ibid., p. 204.]

38. [Lectures, p. 206.]

39. [Ibid., p. 207.]

40. [Ibid., p. 209.]

41. [Ibid., pp. 211-19.]

42. [Ibid., pp. 219-22.]

43. [Ibid., p. 222.]

44. [Ibid., pp. 222-3.]

45. [Lectures, pp. 223-36.]

46. [Ibid., p. 253.]

47. [Ibid., p. 254.]

48. [Ibid., p. 255.]

49. [Ibid., p. 256.]

50. [Ibid., pp. 256, 257.]

51. [Ibid., p. 258.]

52. [Lectures, p. 236.]

53. [Ibid., p. 239.]

54. [Ibid., pp. 241, 242.]

55. [Ibid., pp. 242, 243.]

56. [Ibid., p. 243.]

57. [Ibid., p. 245.]

58. [Ibid., pp. 246, 247.]

59. [Lectures, pp. 247-52.]

60. [Ibid., p. 261.]

61. [Ibid., p. 263.]

62. [There is a reminiscence of them in the chapter on Rent, vol. i., I.11.56-60.]

63. [See above, I.10-12.]

64. [See below, I.73-80, for a conjecture on this subject.]

65. [Below, vol. ii., IV.9.38, note 2.]

66. [Dugald Stewart, in his 'Account of the Life and Writings of Adam Smith,' read to the Royal Society of Edinburgh in 1793 and published in Adam Smith's posthumous Essays on Philosophical Subjects, 1795, p. xviii. See Rae, Life of Adam Smith, pp. 53-5.]

67. [Rae, Life of Adam Smith, pp. 42-5.]

68. [Stewart, in Smith's Essays, pp. lxxx, lxxxi.]

69. [Rae, Life of Adam Smith, pp. 43-4.]

70. [W. R. Scott, Francis Hutcheson, 1900, pp. 210, 231. In the Introduction to Moral Philosophy, 1747, Civil Polity is replaced by 'Œconomicks and Politicks,' but 'Œconomicks' only means domestic law, i.e., the rights of husbands and wives, parents and children, masters and servants.]

71. [System of Moral Philosophy, vol. i., pp. 288, 289.]

72. [Ibid., vol. i., pp. 319-21.]

73. [System of Moral Philosophy, vol. ii., p. 58.]

74. [Ibid., vol. ii., pp. 62, 63.]

75. [System of Moral Philosophy, vol. ii., pp. 71-2.]

76. [Ibid., vol. ii., p. 73.]

77. [System of Moral Philosophy, vol. ii., pp. 318-21.]

78. [Ibid., vol. i., pp. 323-5.]

79. [Ibid., vol. ii., pp. 340-1.]

80. [Ibid., vol. i., pp. 341-2.]

81. [Francis Hutcheson, pp. 232-5.]

82. [In the preface to Hutcheson's System of Moral Philosophy, pp. xxxv, xxxvi.]

83. [Rae, Life of Adam Smith, p. 411.]

84. [Moral Sentiments, 1759, pp. 464-6.]

85. [Below, vol. i., I.2.2.]

86. [Moral Sentiments, 1759, p. 474.]

87. [Ibid., p. 483.]

88. [Ibid., p. 485.]

89. [Moral Sentiments, p. 487.]

90. [Fable of the Bees, 1714, preface.]

91. [Pp. II-I3 in the ed. of 1705.]

92. [Pp. 427-8 in 2nd ed., 1723.]

93. [P. 465 in ed. of 1724.]

94. [Below, vol. ii., IV.5.80-82.]

95. [Lectures, p. 197.]

96. [Above, I.10-12, I.17-19. Moreover, before bringing out the second edition of his Discourses, Hume wrote to Adam Smith asking for suggestions. That Smith made no remark on the protectionist passage in the discourse on the Balance of Trade seems to be indicated by the fact that it remained unaltered (see Hume's Essays, ed. Green & Grose, vol. i., pp. 59, 343 and 344.]

Book I, Introduction and Plan of the Work

1. [This word, with 'annually' just below, at once marks the transition from the older British economists' ordinary practice of regarding the wealth of a nation as an accumulated fund. Following the physiocrats, Smith sees that the important thing is how much can be produced in a given time.]

2. [Cp. with this phrase Locke, Some Considerations of the Consequences of the Lowering of Interest and Raising the Value of Money, ed. of 1696, p. 66, 'the intrinsic natural worth of anything consists in its fitness to supply the necessities or serve the conveniencies of human life.']

3. [The implication that the nation's welfare is to be reckoned by the average welfare of its members, not by the aggregate, is to be noticed.]

4. [Ed. 1 reads ' with which labour is generally applied in it'.]

5. [This second circumstance may be stretched so as to include the duration and intensity of the labour of those who are usefully employed, but another important circumstance, the quantity and quality of the accumulated instruments of production, is altogether omitted.]

6. [Ed. 1 reads 'and'.]

7. [Only one cause, the division of labour, is actually treated.]

8. [For the physiocratic origin of the technical use of the terms 'distribute' and 'distribution' see the Editor's Introduction.]

9. [This word slips in here as an apparently unimportant synonym of 'useful,' but subsequently ousts 'useful' altogether, and is explained in such a way that unproductive labour may be useful; see esp. below II.3.2.]

10. [See the index for the examples of the use of this term.]

11. [Ed. 1 does not contain 'to explain'.]

12. [Ed. 1 reads ' what is the nature'.]

13. [Ed. 1 reads 'is treated of in'.]

14. [Ed. 1 reads 'of the society'.]

15. [Read in conjunction with the first two paragraphs, this sentence makes it clear that the wealth of a nation is to be reckoned by its per capita income. But this view is often temporarily departed from in the course of the work: see the index, s.v. Wealth.]

Book I, Chapter I

16. [This phrase, if used at all before this time, was not a familiar one. Its presence here is probably due to a passage in Mandeville, Fable of the Bees, pt. ii. (1729), dial. vi., p. 335: 'CLEO. . . . When once men come to be governed by written laws, all the rest comes on apace. . . No number of men, when once they enjoy quiet, and no man needs to fear his neighbour, will be long without learning to divide and subdivide their labour. HOR. I don't understand you. CLEO. Man, as I have hinted before, naturally loves to imitate what he sees others do, which is the reason that savage people all do the same thing: this hinders them from meliorating their condition, though they are always wishing for it: but if one will wholly apply himself to the making of bows and arrows, whilst another provides food, a third builds huts, a fourth makes garments, and fifth utensils, they not only become useful to one another, but the callings and employments themselves will, in the same number of years, receive much greater improvements, than if all had been promiscuously followed by every one of the five. HOR. I believe you are perfectly right there; and the truth of what you say is in nothing so conspicuous as it is in watch-making, which is come to a higher degree of perfection than it would have been arrived at yet, if the whole had always remained the employment of one person; and I am persuaded that even the plenty we have of clocks and watches, as well as the exactness and beauty they may be made of, are chiefly owing to the division that has been made of that art into many branches. The index contains, 'Labour, The usefulness of dividing and subdividing it'. Joseph Harris, Essay upon Money and Coins, 1757, pt. i. § 12, treats of the 'usefulness of distinct trades,' or 'the advantages accruing to mankind from their betaking themselves severally to different occupations,' but does not use the phrase 'division of labour'.]

17. [Ed. 1 reads 'improvements'.]

18. [Ed. 1 reads 'Though in them'.]

19. [Another and perhaps more important reason for taking an example like that which follows is the possibility of exhibiting the advantage, of division of labour in statistical form.]

20. [This parenthesis would alone be sufficient to show that those are wrong who believe Smith did not include the separation of employments in 'division of labour'.]

21. [In Adam Smith's Lectures p. 164, the business is as here, divided into eighteen; operations. This number is doubtless taken from the Encyclopédie, tom. v. (published in 1755), s.v. Épingle. The article is ascribed to M. Delaire, 'qui décrivait la fabrication de l'épingle dans les ateliers même des ouvriers,' p. 807. In some factories the division was carried further. E. Chambers, Cyclopædia, vol. ii., 2nd ed., 1738, and 4th ed., 1741, s.v. Pin, makes the number of separate operations twenty-five.]

22. [Ed. 1 reads 'the'.]

23. [Ed. 1 reads 'the lands' here and line preceding.]

24. [Ed. 1 reads 'because the silk manufacture does not suit the climate of England'.]

25. [In Lectures, p. 164, the comparison is between English and French 'toys,' i.e., small metal articles.]

26. [Ed. 1 places 'in consequence of the division of labour' here instead of in the line above.]

27. ['Pour la célérite du travail et la perfection de l'ouvrage, elles dépendent entièrement de la multitude des ouvriers rassemblés. Lorsqu'une manufacture est nombreuse, chaque opération occupe un homme différent. Tel ouvrier ne fait et ne fera de sa vie qu'une seule et unique chose; tel autre une autre chose: d'oł il arrive que chacune s'exécute bien et promptement, et que l'ouvrage le mieux fait est encore celui qu'on a à meilleur marché. D'ailleurs le goût et la façon se perfectionnent nécessairement entre un grand nombre d'ouvriers, parce qu'il est difficile qu'il ne s'en rencontre quelquesuns capables de réfléchir, de combiner, et de trouver enfin le seal moyen qui puisse les mettre audessus de leurs semblables; le moyen ou d'épargner la matière, ou d'allonger le temps, ou de surfaire l'industrie, soit par une machine nouvelle, soit par une manœuvre plus commode.'—Encydopédie, tom. i. (1751), p. 717, s.v. Art. All three advantages mentioned in the text above are included here.]

28. [In Lectures, p. 166, 'a country smith not accustomed to make nails will work very hard for three or four hundred a day and those too very bad'.]

29. [In Lectures, p. 166, 'a boy used to it will easily make two thousand and those incomparably better'.]

30. [In Lectures, p. 255, it is implied that the labour of making a button was divided among eighty persons.]

31. [The same example occurs in Lectures, p. 166.]

32. [Examples are given in Lectures, p. 167: 'Two men and three horses will do more in a day with the plough than twenty men without it. The miller and his servant will do more with the water mill than a dozen with the hand mill, though it too be a machine.']

33. [Ed. 1 reads 'I shall, therefore, only observe'.]

34. [Ed. 1 reads 'machines employed'.]

35. [Ed. 1 reads 'of common'.]

36. [I.e., steam-engines.]

37. [This pretty story is largely, at any rate mythical. It appears to have grown out of a misreading (not necessarily by Smith) of the following passage: 'They used before to work with a buoy in the cylinder enclosed in a pipe, which buoy rose when the steam was strong, and opened the injection, and made a stroke; thereby they were capable of only giving six, eight or ten strokes in a minute, till a boy, Humphry Potter, who attended the engine, added (what he called scoggan) a catch that the beam Q always opened; and then it would go fifteen or sixteen strokes in a minute. But this being perplexed with catches and strings, Mr. Henry Beighton, in an engine he had built at Newcastle-on-Tyne in 1718, took them all away, the beam itself simply supplying all much better.'—J. T. Desaguliers, Course of Experimental Philosophy, vol. ii., 1744, p. 533. From pp. 469, 471, it appears that hand labour was originally used before the 'buoy' was devised.]

38. [In Lectures, p. 167, the invention of the plough is conjecturally attributed to farmer and that of the hand-mill to a slave, while the invention of the water-wheel and the steam engine is credited to philosophers. Mandeville is very much less favourable to the claims of the philosophers: 'They are very seldom the same sort of people, those that invent arts and improvements in them and those that inquire into the reason things: this latter is most commonly practised by such as are idle and indolent, that a fond of retirement, hate business and take delight in speculation; whereas none succeed oftener in the first than active, stirring and laborious men, such as will put their hand to the plough, try experiments and give all their attention to what they are about.—Fable of the Bees, pt. ii. (1729), dial. iii., p. 151. He goes on to give as examples the improvements in soap-boiling, grain-dyeing, etc.]

39. [The advantage of producing particular commodities wholly or chiefly in the countries most naturally fitted for their production is recognised below, IV.2.15, but the fact that division of labour is necessary for its attainment is not noticed. The fact that division of labour allows different workers to be put exclusively to the kind of work for which they are best fitted by qualities not acquired by education and practice, such as age, sex, size and strength, is in part ignored and in part denied below, I.2.3-4,5. The disadvantage of division of labour of specialisation is dealt with below, vol. ii., V.1.175-180.]

40. [This paragraph was probably taken bodily from the MS. of the author's lectures. It appears to be founded on Mun, England's Treasure by Forraign Trade, chap. iii., at end; Locke, Civil Government, § 43; Mandeville, Fable of the Bees, pt. i., Remark P, 2nd ed. 1723, p. 182, and perhaps Harris, Essay upon Money and Coins, pt. i., § 12. See Lectures, pp. 161-162 and notes.]

Book I, Chapter II

41. [I.e., it is not the effect of any conscious regulation by the state or society, like the 'law of Sesotris,' that every man should follow the employment of his father, referred to in the corresponding passage in Lectures, p. 168. The denial that it is the effect of individual wisdom recognising the advantage of exercising special natural talents comes lower down, I.2.3-4.]

42. [It is by no means clear what object there could be in exchanging one bone for for another.]

43. [Misprinted 'intirely' in eds. 1-5. 'Entirely' occurs a little lower down in all eds.]

44. [The paragraph is repeated from Lectures, p. 169. It is founded on Mandeville, Fable of the Bees, pt. ii. (1729), dial. vi., pp. 421, 422.]

45. [Lectures, pp. 169-170.]

46. [This is apparently directed against Harris, Money and Coins, pt. i., § 11, and is in accordance with the view of Hume, who asks readers to 'consider how nearly equal all men are in their bodily force, and even in their mental powers and faculties, ere cultivated by education'.—'Of the Original Contract,' in Essays, Moral and Political, 1748, p. 291.]

47. ['Perhaps' is omitted in eds. 2 and 3, and restored in the errata to ed. 4.)

48. [Lectures, pp. 170-171.]

Book I, Chapter III

49. [The superiority of carriage by sea is here considerably less than in Lectures, p. 172, but is still probably exaggerated. W. Playfair, ed. of Wealth of Nations, 1805, vol. i., p. 29, says a waggon of the kind described could carry eight tons, but, of course, some allowance must be made for thirty years of road improvement.]

50. [Ed. 1 reads ' which is at present carried on'.]

51. [Playfair, op. cit., p. 30 says that equalising the out and home voyages goods were carried from London to Calcutta by sea at the same price (12s. per cwt.) as from London to Leeds by land.]

52. [Ed. 1 reads ' was'.]

53. [Ed. 1 reads 'carry on together a very considerable commerce'.]

54. [This shows a curious belief in the wave-producing capacity of the tides.]

55. [It is only in recent times that this word has become applicable especially to artificial channels; see Murray, Oxford English Dictionary, s.v.]

56. [Ed. 1 reads 'break themselves into many canals'.]

57. [The real difficulty is that the mouths of the rivers are in the Arctic Sea, so that they are separated. One of the objects of the Siberian railway is to connect them.]

58. [Ed. 1 reads 'any one' here.]

59. [The passage corresponding to this chapter is comprised in one paragraph in Lectures, p. 172.]

Book I, Chapter IV

60. [The paragraph has a close resemblance to Harris, Money and Coins, pt. i., §§ 19, 20.]

61. [Iliad, vi. 236; quoted with the same object in Pliny, Hist. Nat., lib. xxxiii., cap. i.; Pufendorf, De jure naturæ et gentium, lib. v., cap. v., § 1; Martin-Leake, Historical Account of English Money, 2nd ed., 1745 p. 4 and elsewhere.]

62. [Montesquieu, Esprit des lois, liv. xxii., chap i., note.]

63. [W. Douglass, A Summary Historical and Political of the First Planting, Progressive Improvements and Present State of the British Settlements in North America, 1760, vol. ii., p. 364. Certain law officers' fees in Washington were still computed in tobacco in 1888.—J. J. Lalor, Cyclopædia of Political Science, 1888, s.v. Money, p. 879.]

64. [Playfair, ed. of Wealth of Nations, 1805, vol. i., p. 36, says the explanation of this is that factors furnish the nailers with materials and during the time they are working give them a credit for bread, cheese and chandlery goods, which they pay for in nails when the iron is worked up. The fact that nails are metal is forgotten at the beginning of the next paragraph in the text above.]

65. [For earlier theories as to these reasons see Grotius, De jure belli et pacis, lib. ii., cap. xii., § 17; Pufendorf, De jure naturæ et gentium, lib. v., cap. i., § 13; Locke, Some Considerations 2nd ed., 1696, p. 31; Law, Money and Trade, 1705, ch. i.; Hutcheson, System of Moral Philosophy, 1755, vol. ii., pp. 55, 56; Montesquieu, Esprit des lois, liv. xxii., ch. ii.; Cantillon, Essai sur la Nature du Commerce en général, 1755, pp. 153, p. 355-357; Harris, Money and Coins, pt. i., §§ 22-27, and cp. Lectures, pp. 182-185.]

66. Plin. Hist. Nat. lib. 33. cap. 3. ['Servius rex primus signavit aes. Antea rudi usos Romæ: Timæus tradit.' Ed. 1 reads 'authority of one Remeus, an ancient author,' Remeus being the reading in the edition of Pliny in Smith's library, cp. Bonar's Catalogue of the Library of Adam Smith, 1894, p. 87. Ed. 1 does not contain the note.]

67. [Ed. 1 reads ' weighing them'.]

68. [Ed. 1 reads ' with the trouble'.]

69. [Aristotle, Politics, 1257a, 38-41; quoted by Pufendorf, De jure naturæ et gentium, lib. v. cap. 1., § 12.]

70. [The aulnager measured woollen cloth in England under 25 Ed. III., st. 4, c. 1. See John Smith, Chronicon Rusticum-Commerciale or Memoirs of Wool, 1747, vol. i., p. 37. The stampmasters of linen cloth in the linen districts of Scotland were appointed under 10 Ann., c. 21, to prevent 'divers abuses and deceits' which 'have of late years been used in the manufactories of linen cloth. . . with respect to the lengths, breadths and unequal sorting of yarn, which leads to the great debasing and undervaluing of the said linen cloth both at home and in foreign parts.'—Statutes of the Realm, vol. ix., p. 682.]

71. [Genesis xxiii 16.]

72. ['King William the First, for the better pay of his warriors caused the firmes which till his time had for the most part been answered in victuals, to be converted in pecuniam numeratam.'—Lowndes, Report containing an Essay for the Amendment of the Silver Coins, 1695, p. 4. Hume, whom Adam Smith often follows, makes no such absurd statement, History, ed. of 1773, vol. i., pp. 225, 226.]

73. [Lowndes, Essay, p. 4.]

74. [Above, I.4.6.]

75. [The Assize of Bread and Ale, 51 Hen. III., contains an elaborate scale beginning, 'When a quarter of wheat is sold for xii d. then wastel bread of a farthing shall weigh vi l. and xvi s.' and goes on to the figures quoted in the text above. The statute is quoted at second-hand from Martin Folkes' Table of English Silver Coins with the same object by Harris, Essay upon Money and Coins, pt. i., § 29, but Harris does not go far enough in the scale to bring in the penny as a weight. As to this scale see below, I.11.100, 114-116.]

76. [Ed. 1 reads 'twenty, forty and forty-eight pennies'. Gamier, Recherches sur la nature et les causes de la richesse des nations, par Adam Smith, 1802 tom. v., p. 55, in a note on this passage says that the sou was always twelve deniers.]

77. [Hume, History of England, ed. of 1773, i. p. 226. Fleetwood, Chronicon Preciosum, 1707, p. 30. These authorities say there were 48 shillings in the pound, so that 240 pence would still make £1.]

78. [Harris Money and Coins, pt. i., § 29.]

79. ['It is thought that soon after the Conquest a pound sterling was divided into twenty shillings.'—Hume, History of England, ed. of 1773, vol. i., p. 227.]

80. [Pliny, Hist. Nat., lib. xxxiii., cap. iii.; see below, vol. ii., pp. 468, 469.]

81. [Harris, Money and Coins, pt. i., § 30, note, makes the French livre about one seventieth part of its original value.]

82. [The subject of debased and depreciated coinage occurs again below, I.5.11-13, I.11.143-144; vol. ii., IV.6.16-32, V.3.61-65. One of the reasons why gold and silver became the most usual forms of money is dealt with below, I.11.79-83. See Coin and Money in the index.]

83. [In Lectures, pp. 182-190, where much of this chapter is to be found, money is considered 'first as the measure of value and then as the medium of permutation or exchange'. Money is said to have had its origin in the fact that men naturally fell upon one commodity with which to compare the value of all other commodities. When this commodity was once selected it became the medium of exchange. In this chapter money comes into use from the first as a medium of exchange, and its use as a measure of value is not mentioned. The next chapter explains that it is vulgarly used as a measure of value because it is used as an instrument of commerce or medium of exchange.]

84. [Lectures, p. 157. Law, Money and Trade, 1705, ch. i. (followed by Harris, Money and Coins, pt. i., § 3 ), contrasts the value of water with that of diamonds. The cheapness of water is referred to by Plato Euthydem. 304 B., quoted by Pufendorf, De jure naturæ et gentium, lib. v., cap. i., § 6; cp. Barbeyrac's note on § 4.]

85. [Ed. 1 reads 'subject which is'.]

Book I, Chapter V

1. ['La richesse en elle-même n'est autre chose que la nourriture, les commodités et les agréments de la vie.'—Cantillon, Essai, pp. 1, 2.]

2. ['Everything in the world is purchased by labour.'—Hume, 'Of Commerce,' in Political Discourses, 1752, p. 12.]

3. ['Also riches joined with liberality is Power, because it procureth friends and servants: without liberality not so, because in this case they defend not but expose men to envy as a prey.'—Leviathan, I., x.]

4. [This paragraph appears first in Additions and Corrections and ed. 3.]

5. [The absence of any reference to the lengthy discussion of this subject in chap. x. is curious.]

6. [Below, I.11.134-138.]

7. [Ed. 1 reads 'there'.]

8. [Ed. 1 reads 'Equal quantities of labour must at all times and places be'.]

9. [The words from 'In his ordinary state of health' to 'dexterity' appear first in ed. 2.]

10. ['Be above all things careful how you make any composition or agreement for any long space of years to receive a certain price of money for the corn that is due to you, although for the present it may seem a tempting bargain.'—Fleetwood, Chronicon Preciosum, p. 174.]

11. [Above, I.4.8-10.]

12. [Below, I.11.188-190.]

13. [C. 6, which applies to Oxford, Cambridge, Winchester and Eton, and provides that no college shall make any lease for lives or years of tithes, arable land or pasture without securing that at least one-third of 'tholde' (presumably the whole not the old) rent should be paid in coin. The Act was promoted by Sir Thomas Smith to the astonishment, it is said, of his fellow-members of Parliament, who could not see what difference it would make. 'But the knight took the advantage of the present cheapness; knowing hereafter grain would grow dearer, mankind daily multiplying, and licence being lately given for transportation. So that at this day much emolument redoundeth to the colleges in each university, by the passing of this Act; and though their rents stand still, their revenues do increase.'—Fuller, Hist. of the University of Cambridge, 1655, p. 144. quoted in Strype, Life of the learned Sir Thomas Smith, 1698, p. 192.]

14. [Commentaries, 1765, vol. ii., p. 322.]

15. [Above, I.4.10.]

16. [Below, I.8.16-27.]

17. [Below I.8.27-30,50-56.]

18. [Below, chap. xi., see esp. I.11.134-137.]

19. [Ed. 1 reads 'it.']

20. [Ed. 1 places the 'for example' here.]

21. ['In England and this part of the world, wheat being the constant and most general food, not altering with the fashion, not growing by chance: but as the farmers sow more or less of it, which they endeavour to proportion, as near as can be guessed to the consumption, abstracting the overplus of the precedent year in their provision for the next; and vice versa, it must needs fall out that it keeps the nearest proportion to its consumption (which is more studied and designed in this than other commodities) of anything, if you take it for seven or twenty years together: though perhaps the scarcity of one year, caused by the accidents of the season, may very much vary it from the immediately precedent or following. Wheat, therefore, to this part of the world (and that grain which is the constant general food of any other country) is the fittest measure to judge of the altered value of things in any long tract of time: and therefore wheat here, rice in Turkey, etc., is the fittest thing to reserve a rent in, which is designed to be constantly the same for all future ages. But money is the best measure of the altered value of things in a few years: because its vent is the same and its quantity alters slowly. But wheat, or any other grain, cannot serve instead of money: because of its bulkiness and too quick change of its quantity.'—Locke, Some Considerations of the Consequences of the Lowering of Interest and Raising the Value of Money, ed. of 1696, pp. 74, 75.]

22. [Ed. 1 reads 'than one which sells for an ounce at London to'.]

23. [Below, chap. xi. passim.]

24. Pliny, lib. xxxiii. c. 3. [This note is not in ed. 1.]

25. [Eds. 1 and 2 read 'always'.]

26. [Habere aes alienum.]

27. [Ed. 1 does not contain 'sterling'.]

28. [Ed. 1 places the 'originally' here.]

29. [Ed. 1 places the 'only' here.]

30. [The Act, I9 Hen. VII., c. 5, ordered that certain gold coins should pass for the sums for which they were coined, and 5 and 6 Ed. VI. prescribed penalties for giving or taking more than was warranted by proclamation. The value of the guinea was supposed to be fixed by the proclamation of 1717, for which see Economic Journal, March, 1898. Lead tokens were corned by individuals in the reign of Elizabeth. James I. coined copper farthing tokens, but abstained from proclaiming them as money of that value. In 1672 copper halfpennies were issued, and both halfpennies and farthings were ordered to pass as money of those values in all payments under sixpence.—Harris, Money and Coins, pt. i., § 39; Liverpool, Treatise on the Coins of the Realm, 1805, pp. I30, 131.]

31. [Ed. 1 reads 'sum'.]

32. [I.e., if 21 pounds may be paid with 420 silver shillings or with 20 gold guineas it does not matter whether a 'pound' properly signifies 20 silver shillings or 20/21 of a gold guinea.]

33. [This happens to have been usually, though not always, true, but it is so simply because it has usually happened that the most precious metal in use as money has been made or become the standard. Gold was already the standard in England, though fact was not generally recognised; see Harris, Money and Coins, pt. ii., §§ 36, 37, below, vol. ii., IV.6.21-32.]

34. [In I774.]

35. [These regulations, issued in 1774, provided that guineas should not pass when they had lost a certain portion of their weight, varying with their age.—Liverpool, Coins Of the Realm, p. 216, note.]

36. [Magens, Universal Merchant, ed. Horsley, 1753, pp. 53-55, gives the proportions thus: French coin, 1 to 14 5803/12279, Dutch, 1 to 14 82550/154425, English, 1 to 15 14295/68200.]

37. [Full weight silver coins would not remain in circulation, as the bullion in them was worth more reckoned in guineas and in the ordinary old and worn silver coins than the nominal amount stamped on them.]

38. [Locke, Further Considerations Concerning Raising the Value of Money, 2nd ed., 1695, pp. 58-60. The exportation of foreign coin (misprinted 'kind' in Pickering) or bullion of gold or silver was permitted by 15 Car. II, c. 7, on the ground that it was 'found by experience that' money and bullion were 'carried in greatest abundance (as to a common market) to such places as give free liberty for exporting the same' and in order 'the better to keep in and increase the current coins' of the kingdom.]

39. [Harris, writing nearly twenty years earlier, had said, 'it would be a ridiculous and vain attempt to make a standard integer of gold whose parts should be silver, or to make a motley standard, part gold and part silver.'—Money and Coins, pt. i., § 36.]

40. [I.e., an ounce of standard gold would not actually fetch £3 17s. 10 1/2d. if sold for cash down.]

41. [This erroneous statement is repeated below, p. 501, and also vol. ii., p. 60, where the calculations on which it is based are given. See the note on that passage.]

42. [The question of seignorage is further discussed at some length in the chapter on Commercial Treaties vol. ii., IV.6.15-32,.]

43. [Ed. 1 reads 'in the tear and wear of coin, and in the tear and wear of plate'.]

Book I, Chapter VI

44. [Ed. 1 does not contain 'the whole produce of labour belongs to the labourer; and'. The words, however, occur in all eds. at I.8.2 below.]

45. ['The capital annually employed' is the working expenses for twelve months, not capital in the usual modern sense.]

46. [Ed. 1 inserts 'frequently'.]

47. [Eds. 1 and 2 read 'proportion to it'.]

48. [Ed. 1 reads 'profits of stock are a source of value'.]

49. [Ed. 1 reads from the beginning of the paragraph: 'In this state of things, therefore, quantity of labour commonly employed in acquiring or producing any commodity is by no means the only circumstance'.]

50. [Buchanan, ed. Wealth of Nations, 1814, vol. i., p. 80, says: 'They do so. But the question is why this apparently unreasonable demand is so generally complied with. Other men love also to reap where they never sowed, but the landlords alone, it would appear, succeed in so desirable an object.']

51. [Ed. 1 does not contain 'the labourer' and 'even to him'.]

52. [Ed. 1 in place of these two sentences reads: 'Men must then pay for the licence to gather them; and in exchanging them either for money, for labour, or for other goods, over and above what is due, both for the labour of gathering them, and for the profits of the stock which employs that labour, some allowance must be made for the price of the licence, which constitutes the first rent of land. In the price therefore of the greater part of commodities the rent of land comes in this manner to constitute a third source of value. In this state of things, neither the quantity of labour commonly employed in acquiring or producing any commodity, nor the profits of the stock which advanced the wages and furnished the materials of that labour, are the only circumstances which can regulate the quantity of labour which it ought commonly to purchase command or exchange for. A third circumstance must likewise be taken into consideration; the rent of the land; and the commodity must commonly purchase, command or exchange for, an additional quantity of labour, in order to enable the person who brings it to market to pay this rent.']

53. [Ed. 1 reads 'The real value of all the different component parts of price is in this manner measured'.]

54. [Smith overlooks the fact that his inclusion of the maintenance of labouring cattle here as a sort of wages requires him to include it in the national income or ' wealth of the nation,' and therefore to reckon the cattle themselves as part of the nation.]

55. [Ed. 1 reads 'tear and wear'.]

56. [The use of 'labour' instead of the more natural ' wages' here is more probably the result of its use five lines higher up than of any feeling of difficulty about the maintenance of cattle. On I.7.2-3 below 'rent, labour and profit' and 'rent, wages and profit' are both used; see below, II.3.4, and note.]

57. [The fact that the later manufacturer has to replace what is here called the capital, i.e., the periodical expenditure of the earlier manufacturer, does not necessarily require him to have a greater capital to deal with the same produce. It need not be greater if he requires less machinery and buildings and a smaller stock of materials.]

58. [Below, I.11.4-6.]

59. [Only true if 'commodity' be understood to include solely goods which constitute income.]

60. [The ' whole annual produce' must be taken to mean the income and not the whole mass of goods produced, including those which perish or are used up in the creation of others.]

61. [Some parts of this 'other revenue,' viz., interest and taxes, are mentioned in the next paragraph. It is perhaps also intended to include the rent of houses; see below, II.1.10-15.]

62. [Ed. 1 reads 'sale of his work'.]

63. [Below, I.10.38-40.]

64. [Eds. 1-3 read ' was'.]

Book I, Chapter VII

65. [The chapter follows Lectures, pp. 173-182, very closely.]

66. [Below, chaps. viii. and ix.]

67. [Below, chap. xi.]

68. [The same phrase occurs below, I.7.30, I.10.1.]

69. [Above, I.7.11 and note 56.]

70. [Ed. 1, beginning four lines higher up, reads 'according as the greatness of the deficiency increases more or less the eagerness of this competition. The same deficiency'.]

71. [Ed. 1 reads 'the competitors'.]

72. [Ed. 1 reads 'fall short of it'.]

73. [See below, I.10.49.]

74. [Repeated below, I.10.49.]

75. [Ed. 1 does not contain 'more'.]

76. [They are called profits simply because all the gains of the master-manufacturer are called profits. They can scarcely be said to have been 'considered' at all; if they had been, they would doubtless have been pronounced to be, in the words of the next paragraph, 'the effects of a particular accident,' namely, the possession of peculiar knowledge on the part of the dyer.]

77. [Ed. 1 places 'for whole centuries together' here instead of in the line above.]

78. [See below, I.10.56-89. Playfair, in a note on this passage, ed. Wealth of Nations, 1805, vol. i. p. 97, says: 'This observation about corporations and apprenticeships scarcely applies at all to the present day. In London, for example, the freemen only can carry on certain businesses within the city: there is not one of those businesses that may not be carried on elsewhere, and the produce sold in the city. If Mr. Smith's principle applied, goods would be dearer in Cheapside than in Bond Street, which is not the case.']

79. [Above, I.7.6, and below, I.10.1.]

80. [In Lectures, p. 168, the Egyptian practice is attributed to 'a law of Sesostris'.]

Book I, Chapter VIII

1. [The same nine words occur above, I.6.4, in ed. 2 and later eds.]

2. [The word 'cheaper' is defined by the next sentence as 'produced by a smaller quantity of labour'.]

3. [It would be less confusing if the sentence ran: 'But though all things would have become cheaper in the sense just attributed to the word, yet in the sense in which the words cheaper and dearer are ordinarily used many things might have become dearer than before.']

4. [I.e., ' would in the ordinary sense of the word be five times dearer than before'.]

5. [I.e., 'in the sense attributed to the word above'.]

6. [If the amount of labour necessary for the acquisition of a thing measures its value, 'twice as cheap' means simply, twice as easy to acquire.]

7. [Ed. 1 reads 'of whatever produce'.]

8. [The provision of tools to work with and buildings to work in is forgotten.]

9. [Cp. with this account that given at the beginning of chap. vi., I.6.1-6 above.]

10. [Ed. 1 reads, 'The masters being fewer in number can not only combine more easily, but the law authorises their combinations, or at least does not prohibit them'.]

11. [E.g., 7 Geo. I., stat. 1, c. 13, as to London tailors; 12 Geo. I., c. 34, as to woolcombers and weavers; 12 Geo. I., c. 35, as to brick and tile makers within fifteen miles of London; 22 Geo. II., c. 27, § 12, as to persons employed in the woollen manufacture and many others.]

12. [The word is used as elsewhere in Adam Smith without the implication of falsity now attached to it: a pretence is simply something put forward.]

13. [Ed. 1 does not contain 'either'.]

14. [Essai sur la nature du commerce en général, 1755, pp. 42-47. The 'seems' is not meaningless, as Cantillon is unusually obscure in the passage referred to. It is not clear whether he intends to include the woman's earnings or not.]

15. [I.e., before completing their seventeenth year, as stated by Dr. Halley, quoted by Cantillon, Essai, pp. 42, 43.]

16. [Cantillon himself, p. 44, says: 'C'est une matière qui n'admet pas un calcul exact, et dans laquelle la précision n'est pas même fort nécessaire, il suffit qu'on ne s'y éloigne pas beaucoup de la réalité.']

17. [Ed. 1 reads 'them'.]

18. [There is no attempt to define 'maintenance,' and consequently the division of a man's revenue into what is necessary for his maintenance and what is over and above is left perfectly vague.]

19. [It seems to be implied here that keeping a menial servant, even to perform the most necessary offices (e.g., to nurse the infant child of a widower), is not 'maintaining' a family.]

20. [Above, I.1.1, the wealth of a nation was treated as synonymous with its annual produce, and there has been hitherto no suggestion that its stock must be considered.]

21. [Apparently this is a slip for 'occasions high wages'. At any rate the next sentences require this assertion and not that actually made.]

22. [The method of calculating wealth by the amount of annual produce per head adopted above, I.1.1, is departed from here and below, I.8.24, and frequently to passages in favour of the calculation by amount of capital wealth.]

23. This was written in 1773, before the commencement of the late disturbances.' [Ed. 1 does not contain this note; eds. 2 and 3 read 'present disturbances'.]

24. [Petty, Political Arithmetic, 1699, p. 18, made the period for England 360 years. Gregory King, quoted by Davenant, Works, ed. Whitworth, 1771, vol. ii. p. 176, makes it 435 years in the past and probably 600 in the future. In 1703 the population of Virginia was 60,000, in 1755 it was 300,000, and in 1765 it was 500,000, 'by which they appear to have doubled their numbers every twenty years as nigh as may be'.—The Present State of Great Britain and North America with regard to Agriculture, Population, Trade and Manufactures, 1767, p. 22, note. The original number of persons who in 1643 had settled in New England was 21,200. Ever since, it is reckoned that more have left them than have gone to them. In the year 1760 they were increased to half a million. They have therefore all along doubled their own number in twenty-five years.—Richard Price, Observations on Reversionary Payments, etc., 1771, pp. 204, 205. The statement as to America is repeated below, III.4.19.]

25. [Here we have a third method of calculating the riches or wealth of a country, namely by the amount of produce per acre. For other references to this ' wealth' of China see the index, s.v. China.]

26. [The date of his arrival was 1275.]

27. ['Les artisans courent les villes du matin au soir pour chercher pratique,' Quesnay Éphémérides du citoyen, Mars, 1767; in Œuvres, ed. Oncken, 1888, p. 581.]

28. ['Cependant quelque sobre et quelque industrieux que soit le peuple de la Chine, le grand nombre de ses habitants y cause beaucoup de misère. On en voit de si pauvres, que ne pouvant fournir à leurs enfants les aliments nécessaires, ils les exposent dans les rues, surtout lorsque lee mères tombent malades, ou qu'elles manquent de lait pour les nourrir. Ces petite innocents sont condamnés en quelque manière à la mort presque au même instant qu'ils ont commencé de vivre: cela frappe dans les grandes villes, comme Peking, Canton; car dans les autres villes à peine s'en aperçoit-on.

'C'est ce qui a porté lee missionnaires à entretenir dans ces endroits très peuplés, un nombre de catéchistes, qui en partagent entre eux tous les quartiers, et les parcourent tous les matins, pour procurer la grâce du baptême à une multitude d'enfants moribonds.

'Dans la même vue on a quelquefois gagné den sages-femmes infidèles afin qu'elles permissent à des filles chrétiennes de les suivre dans les différentes maisons oł elles sont appelées: car il arrive quelquefois que les Chinois se trouvant hots d'état de nourrir une nombreuse famille, engagent ces sages-femmes à étouffer dans un bassin plein d'eau les petites filler aussitôt qu'elles sont nées; ces chrétiennes ont soin de lee baptiser, et par ce moyen ces tristes victimes de l'indigence de leurs parents trouvent la vie éternelle dans ces mêmes eaux, qui leur ravissent une vie courte et périssable.'—Du Halde, Description géographique, historique, chronologique, politique et physique de l'empire de la Chine et de la Tartarie chinoise, 1735, tom. ii. pp. 73, 74. The statement in the text above that drowning babies is a special business is possibly founded on a mistranslation of 'sages-femmes'.]

29. [Below, I.10.40-41.]

30. [The difference between England and Scotland in this respect is attributed to the English law of settlement below, I.10.117.]

31. [The inferiority of oatmeal is again insisted on below, I.11.50.]

32. [Authorities are quoted below, I.11.231.]

33. [Hume, History, ed. of 1773, vol. vi., p. 178, quoting Rymer's Foedera, tom. xvi., p. 717. This was for service in Germany.]

34. [Sir Matthew Hale.]

35. See his scheme for the maintenance of the Poor, in Burn's History of the Poor-laws. [This note appears first in ed. 2. Hales Discourse Touching Provision for the Poor was printed in 1683. It contains no internal evidence of the careful inquiry attributed it above.]

36. [Davenant, Essay upon the probable Methods of Making a People Gainers in the Balance of Trade, 1699, pp. 15, 16; in Works, ed. Whitworth, vol. ii., p. 175.]

37. [Scheme D in Davenant, Balance of Trade, in Works Scheme B, vol. ii., p. 184. See below, I.11.147, note.]

38. [Berkeley, Querist, 5th ed., 1752, qu. 2, asks ' whether a people can be called poor where the common sort are well fed, clothed and lodged'. Hume, 'On Commerce,' says: 'The greatness of a state and the happiness of its subjects, however independent they may be supposed in some respects, are commonly allowed to be inseparable with regard to commerce.'—Political Discourses, 1752, p. 4.]

39. [Cantillon, Essai, pt. i., ch. ix., title, 'Le nombre de laboureurs, artisans et autres qui travaillent dans un état se proportionne naturellement au besoin qu'on en a.']

40. [Ed. 1 reads 'If it'.]

41. [Berkeley, Querist, qu. 62, asks ' whether a country inhabited by people well fed, clothed and lodged would not become every day more populous? And whether numerous stock of people in such circumstances would not constitute a flourishing nation?']

42. [Ed. 1 reads 'tear and wear' here and in the three other cases where the phrase is used on this page.]

43. [This is a more favourable view than that taken in Lectures, p. 257.]

44. [De morbis artificum diatriba, 1700, translated into English (A Treatise on the Diseases of Tradesmen) by R. James, 1746.]

45. [Misprinted 'taillies' in eds. 3-5.]

46. [Recherches sur la population des généralités d'Auvergne, de Lyon, de Rouen, et de quelques provinces et villes du royaume, avec des réflexions sur la valeur du bled tant en France qu'en Angleterre, depuis 1674 jusqu'en 1764, par M. Messance, receveur des tailles de l'élection de Saint-Etienne, 1766, pp. 287-292, 305-308.]

47. [Ed. 1 reads 'continued to do so'.]

48. [Ed. 1 reads 'that the increase of its price does not compensate the diminution of its quantity'. The meaning is that the increase in the amount paid for a given quantity of labour is more than counterbalanced by the diminution in the quantity required. The statement is repeated below, I.11.238.]

Book I, Chapter IX

49. [This statement is somewhat amplified below, II.4.6-8, where the increasing intensity of the competition between the owners of capital is attributed to the gradually increasing difficulty of finding 'a profitable method of employing any new capital'.]

50. [Defined above, I.6.18.]

51. [But that interest will not always bear the same proportion to profit is recognised below, I.9.18-21.]

52. [C. 9, 'an act against usury'. On the ground that previous Acts and laws had been obscure it repeals them all, and prohibits the repurchase of goods sold within three months before, and the obtaining by any device more than 10 per cent. per annum for forbearing payment of money. Its real effect was to legalise interest up to 10 per cent.]

53. [5 & 6 Ed. VI., c. 20, forbade all interest and repealed 37 Hen. VIII., c. 9. alleging in its preamble that that Act was not intended to allow usury, as 'divers persons blinded with inordinate love of themselves' imagined, but was intended against all usury, 'and yet nevertheless the same was by the said act permitted for the avoiding of a more ill and inconvenience that before that time was used'.]

54. [On the ground that 5 & 6 Ed. VI., c. 20, 'hath not done so much good as was hoped it should but rather the said vice of usury and especially by way of sale of wares and shifts of interest hath much more exceedingly abounded to the utter undoing of many gentlemen, merchants, occupiers and others'.]

55. [C. 17, which alleges that the fall of prices which had taken place made the maintenance of 'so high a rate' as 10 per cent. prejudicial to agriculture and commerce, and therefore reduces the maximum to 8 per cent. for the future. It concludes with the very empty proviso that 'no words in this law contained shall be construed or expounded to allow the practice of usury in point of religion or conscience'.]

56. [It had already been so reduced by a Commonwealth Act of Parliament, passed in August, 1651, which adopts the reasons given by 21 Jac. I., c. 17. But of course this, like other Acts of the Commonwealth, had to be ignored by the Restoration Parliament, which by 12 Car. II, c. 13, re-made the reduction on the grounds that the abatement of interest from 10 per cent. 'in former times hath been found by notable experience beneficial to the advancement of trade and improvement of lands by good husbandry, with many other considerable advantages to this nation, especially the reducing of it to a nearer proportion with foreign states with whom we traffic,' and because 'in fresh memory the like fall from eight to six in the hundred by a late constant practice hath found the like success to the general contentment of this nation as is visible by several improvements,' while 'it is the endeavour of some at present to reduce it back again in practice to the allowance of the statute still in force to eight in the hundred to the great discouragement of ingenuity and industry in the husbandry trade and commerce of this nation.']

57. [By 12 Ann. st. 2, c. 16, which speaks of the benefit to trade and agriculture resulting from the earlier reductions, of the burdens which the war had laid on landowners, and of the decay of foreign trade owing to the high interest and profit of money at home, which things made it 'absolutely necessary to reduce the high rate of interest' to a nearer proportion with the interest allowed in foreign states.]

58. [That of 1756-1763.]

59. [Holders of 4 per cent. annuities who declined to accept in exchange new stock bearing interest for some years at 3 1/2 and afterwards at 3 per cent. were paid off by means of money raised by a 3 per cent. loan in 1750. See Sinclair, History of the Public Revenue, 1785, pt. ii., p. 113. From that time till the beginning of 1755 the 3 per cents. were usually above par. Then they gradually sank to 63 in January, 1762; rose to 96 in March 1763; fell again to 80 in October, 1764; after that they were seldom above 90 before the publication of the Wealth of Nations (Sinclair, op. cit., pt. iii., 1790, Appendix iii.). The policy of a legal regulation of interest is discussed below, II.4.14-17.]

60. [Below, II.3.32-33,34-35.]

61. [Above, I.8.30.]

62. [Below, I.11.129.]

63. See Denisart, Article Taux des Interets, tom. iii. p. 18. [J. B. Denisart, Collection di décisions nouvelles et de notions relatives à la jurisprudence actuelle, 7th ed., 1771, s.v. Intérêt, subdivision Taux des Intérêts. This does not go so far as the reduction of 1766. The note appears first in ed. 2.]

64. [Below, II.4.16.]

65. [Postlethwayt, Dictionary of Commerce, 2nd ed., 1757, vol. i., p. 877, s.v. Funds, says that the amount of British funds held by foreigners has been estimated by some at one-fifth and by others at one-fourth of the whole debt. But Magens, Universal Merchant (ed. Horsley), 1753, p. 13, thought it 'more than probable that foreigners are not concerned in anything like one-fourth'. He had been informed 'that most of the money which the Dutch have here is in Bank, East India and South Sea stocks, and that their interest in them might amount to one-third of the whole'. Fairman, Account of the Public Funds, 7th ed., 1824, p. 229, quotes 'an account drawn up in the year 1762, showing how much of the several funds transferable at the Bank of England then stood in the names of foreigners,' which is also in Sinclair, History of the Public Revenue, pt. iii., 1790, p. 366. From this it appears that foreigners held £4,627,858 of Bank stock and £10,328,537 in the other funds, which did not include South Sea and East India stock. Fairman had reason to believe that the South Sea holding amounted to £2,500,000 and the East Indian to more than £500,000, which would make in all about £18,000,000. In 1806, he says, the total claiming exemption from income tax (foreigners were exempt) was £18,500,000, but this did not include Bank stock.]

66. [Eds. 1-3 read 'lands'.]

67. [Above, I.8.1-20.]

68. [Below, II.3.1-42.]

69. [Below, II.3.36-37; vol. ii., V.3.59.]

70. [Eds. 1 and 2 read 'cheaper'.]

71. [Ed. 1 reads 'five and forty,' 8 having probably been misread as 5.]

72. [Ad Atticum, VI., i., 5, 6. Cicero had arranged that a six-year-old debt should be repaid with interest at the rate of 12 per cent. per annum, the principal being increased by that amount for each of the six years. This would have very nearly doubled the principal, but Brutus, through his agent, kept asking for 48 per cent., which would have multiplied it by more than fifteen. However, Cicero asserted that the 12 per cent. would have satisfied the cruellest userers.]

73. [Lectures, pp. 130-134.]

74. [I.e., the danger of evading the law.]

75. [Esprit des lois, liv. xxii., ch. 19, 'L'usure augmente dans les pays mahométans à proportion de la sévérité de la défense: le prêteur s'indemnise du péril de la contravention. Dans ces pays d'Orient, la plupart des hommes n'ont rien d'assuré; il n'y a presque point de rapport entre la possession actuelle d'une somme et l'espérance de la ravoir après l'avoir prêtée: l'usure y augmente donc à proportion du péril de l'insolvabilité.']

76. [Joshua Gee, Trade and Navigation of Great Britain Considered, 1729, p. 128, notices the fact of the Dutch being all engaged in trade and ascribes it to the deficiency of valuable land.]

77. [See below, vol. ii. IV.7.190-191.]

78. [According to the view of the subject here set forth, if the three employers each spend £100 in wages and materials, and profits are at first 5 per cent. and then rise to 10 per cent., the finished commodity must rise from £331 0s. 3d. to £364 2s., while if, on the other hand, the wages rise from £100 to £105, the commodity will only rise to £347 11s. 3d. It is assumed either that profits mean profits on turn-over and not on capital per annum, or else that the employers each have their capital turned over once a year. But even when one or other of these assumptions is granted, it is clear that the 'simple interest' may easily be greater than the 'compound'. In the examples just given we doubled profits, but only added one-twentieth to wages. If we double wages and leave profits at 5 per cent., the commodity should rise from £331 0s. 3d. to £662 0s. 6d.]

79. [This paragraph is not in ed. 1; the epigram at the end, however, did not make its appearance here for the first time in ed. 2, since it occurs in a slightly less polished form in vol. ii., IV.7.115.]

End of Notes for Book I, Ch. I-IX.

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