An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader with highlighter txt) 📖

to market. At a coal mine for which the landlord

can get no rent, but, which he must either work himself or let it alone

altogether, the price of coals must generally be nearly about this price.

 

Rent, even where coals afford one, has generally a smaller share in their

price than in that of most other parts of the rude produce of land. The rent

of an estate above ground, commonly amounts to what is supposed to be a

third of the gross produce; and it is generally a rent certain and

independent of the occasional variations in the crop. In coal mines, a fifth

of the gross produce is a very great rent, a tenth the common rent ; and it

is seldom a rent certain, but depends upon the occasional variations in the

produce. These are so great, that in a country where thirty years purchase

is considered as a moderate price for the property of a landed estate, ten

years purchase is regarded as a good price for that of a coal mine.

 

The value of a coal mine to the proprietor, frequently depends as much upon

its situation as upon its fertility. That of a metallic mine depends more

upon its fertility, and less upon its situation. The coarse, and still more

the precious metals, when separated from the ore, are so valuable, that they

can generally bear the expense of a very long land, and of the most distant

sea carriage. Their market is not confined to the countries in the

neighbourhood of the mine, but extends to the whole world. The copper of

Japan makes an article of commerce in Europe; the iron of Spain in that of

Chili and Peru. The silver of Peru finds its way, not only to Europe, but

from Europe to China.

 

The price of coals in Westmoreland or Shropshire can have little effect on

their price at Newcastle ; and their price in the Lionnois can have none at

all. The productions of such distant coal mines can never be brought into

competition with one another. But the productions of the most distant

metallic mines frequently may, and in fact commonly are.

 

The price, therefore, of the coarse, and still more that of the precious

metals, at the most fertile mines in the world, must necessarily more or

less affect their price at every other in it. The price of copper in Japan

must have some influence upon its price at the copper mines in Europe. The

price of silver in Peru, or the quantity either of labour or of other goods

which it will purchase there, must have some influence on its price, not

only at the silver mines of Europe, but at those of China. After the

discovery of the mines of Peru, the silver mines of Europe were, the greater

part of them, abandoned. The value of silver was so much reduced, that their

produce could no longer pay the expense of working them, or replace, with a

profit, the food, clothes, lodging, and other necessaries which were

consumed in that operation. This was the case, too, with the mines of Cuba

and St. Domingo, and even with the ancient mines of Peru, after the

discovery of those of Potosi.

 

The price of every metal, at every mine, therefore, being regulated in some

measure by its price at the most fertile mine in the world that is actually

wrought, it can, at the greater part of mines, do very little more than pay

the expense of working, and can seldom afford a very high rent to the

landlord. Rent accordingly, seems at the greater part of mines to have but a

small share in the price of the coarse, and a still smaller in that of the

precious metals. Labour and profit make up the greater part of both.

 

A sixth part of the gross produce may be reckoned the average rent of the

tin mines of Cornwall, the most fertile that are known in the world, as we

are told by the Rev. Mr. Borlace, vice-warden of the stannaries. Some, he

says, afford more, and some do not afford so much. A sixth part of the gross

produce is the rent, too, of several very fertile lead mines in Scotland.

 

In the silver mines of Peru, we are told by Frezier and Ulloa, the

proprietor frequently exacts no other acknowledgment from the undertaker of

the mine, but that he will grind the ore at his mill, paying him the

ordinary multure or price of grinding. Till 1736, indeed, the tax of the

king of Spain amounted to one fifth of the standard silver, which till then

might be considered as the real rent of the greater part of the silver mines

of Peru, the richest which have been known in the world. If there had been

no tax, this fifth would naturally have belonged to the landlord, and many

mines might have been wrought which could not then be wrought, because they

could not afford this tax. The tax of the duke of Cornwall upon tin is

supposed to amount to more than five per cent. or one twentieth part of the

value ; and whatever may be his proportion, it would naturally, too, belong

to the proprietor of the mine, if tin was duty free. But if you add one

twentieth to one sixth, you will find that the whole average rent of the tin

mines of Cornwall, was to the whole average rent of the silver mines of

Peru, as thirteen to twelve. But the silver mines of Peru are not now able

to pay even this low rent; and the tax upon silver was, in 1736, reduced

from one fifth to one tenth. Even this tax upon silver, too, gives more

temptation to smuggling than the tax of one twentieth upon tin; and

smuggling must be much easier in the precious than in the bulky commodity.

The tax of the king of Spain, accordingly, is said to be very ill paid, and

that of the duke of Cornwall very well. Rent, therefore, it is probable,

makes a greater part of the price of tin at the most fertile tin mines than

it does of silver at the most fertile silver mines in the world. After

replacing the stock employed in working those different mines, together with

its ordinary profits, the residue which remains to the proprietor is

greater, it seems, in the coarse, than in the precious metal.

 

Neither are the profits of the undertakers of silver mines commonly very

great in Peru.The same most respectable and well-informed authors acquaint

us, that when any person undertakes to work a new mine in Peru, he is

universally looked upon as a man destined to bankruptcy and ruin, and is

upon that account shunned and avoided by every body.Mining, it seems, is

considered there in the same light as here, as a lottery, in which the

prizes do not compensate the blanks, though the greatness of some tempts

many adventurers to throw away their fortunes in such unprosperous projects.

 

As the sovereign, however, derives a considerable part of his revenue from the produce

of silver mines, the law in Peru gives every possible encouragement to the

discovery and working of new ones. Whoever discovers a new mine, is entitled

to measure off two hundred and forty-six feet in length, according to what

he supposes to be the direction of the vein, and half as much in breadth. He

becomes proprietor of this portion of the mine, and can work it without

paving any acknowledgment to the landlord. The interest of the duke of

Cornwall has given occasion to a regulation nearly of the same kind in that

ancient dutchy. In waste and uninclosed lands, any person who discovers a

tin mine may mark out its limits to a certain extent, which is called

bounding a mine. The bounder becomes the real proprietor of the mine, and

may either work it himself, or give it in lease to another, without the

consent of the owner of the land, to whom, however, a very small

acknowdedgment must be paid upon working it. In both regulations, the sacred

rights of private property are sacrificed to the supposed interests of

public revenue.

 

The same encouragement is given in Peru to the discovery and working of new

gold mines; and in gold the king’s tax amounts only to a twentieth part of

the standard rental. It was once a fifth, and afterwards a tenth, as in

silver; but it was found that the work could not bear even the lowest of

these two taxes. If it is rare, however, say the same authors, Frezier and

Ulloa, to find a person who has made his fortune by a silver, it is still

much rarer to find one who has done so by a gold mine. This twentieth part

seems to be the whole rent which is paid by the greater part of the gold

mines of Chili and Peru. Gold, too, is much more liable to be smuggled than

even silver; not only on account of the superior value of the metal in

proportion to its bulk, but on account of the peculiar way in which nature

produces it. Silver is very seldom found virgin, but, like most other

metals, is generally mineralized with some other body, from which it is

impossible to separate it in such quantities as will pay for the expense,

but by a very laborious and tedious operation, which cannot well be carried

on but in workhouses erected for the purpose, and, therefore, exposed to

the inspection of the king’s officers. Gold, on the contrary, is almost

always found virgin. It is sometimes found in pieces of some bulk ; and,

even when mixed, in small and almost insensible particles, with sand, earth,

and other extraneous bodies, it can be separated from them by a very short

and simple operation, which can be carried on in any private house by any

body who is possessed of a small quantity of mercury. If the king’s tax,

therefore, is but ill paid upon silver, it is likely to be much worse paid

upon gold; and rent must make a much smaller part of the price of gold than

that of silver.

 

The lowest price at which the precious metals can be sold, or the smallest

quantity of other goods for which they can be exchanged, during any

considerable time, is regulated by the same principles which fix the lowest

ordinary price of all other goods. The stock which must commonly be

employed, the food, clothes, and lodging, which must commonly be consumed in

bringing them from the mine to the market, determine it. It must at least be

sufficient to replace that stock, with the ordinary profits.

 

Their highest price, however, seems not to be necessarily determined by any

thing but the actual scarcity or plenty of these metals themselves. It is

not determined by that of any other commodity, in the same manner as the

price of coals is by that of wood, beyond which no scarcity can ever raise

it. Increase the scarcity of gold to a certain degree, and the smallest bit

of it may become more precious than a diamond, and exchange for a greater

quantity of other goods.

 

The demand for those metals arises partly from their utility, and partly

from their beauty. If you except iron, they are more useful than, perhaps,

any other metal. As they are less liable to rust and impurity, they can more

easily be kept clean; and the utensils, either of the table or the kitchen,

are often, upon that account, more agreeable when made of them. A silver

boiler is more cleanly than a lead, copper, or tin one; and the same quality

would render a gold boiler still better than