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

of silver, equal to about ten shillings of our present money, the

price at which we find it estimated in the beginning of the sixteenth

century, and at which it seems to have continued to be estimated till about

1570.

 

In 1350, being the 25th of Edward III. was enacted what is called the

Statute of Labourers. In the preamble, it complains much of the insolence of

servants, who endeavoured to raise their wages upon their masters. It

therefore ordains, that all servants and labourers should, for the future,

be contented with the same wages and liveries (liveries in those times

signified not only clothes, but provisions) which they had been accustomed

to receive in the 20th year of the king, and the four preceding years; that,

upon this account, their livery-wheat should nowhere be estimated higher

than tenpence a-bushel, and that it should always be in the option of the

master to deliver them either the wheat or the money. Tenpence: a-bushel,

therefore, had, in the 25th of Edward III. been reckoned a very moderate

price of wheat, since it required a particular statute to oblige servants to

accept of it in exchange for their usual livery of provisions ; and it had

been reckoned a reasonable price ten years before that, or in the 16th year

of the king, the term to which the statute refers. But in the 16th year of

Edward III. tenpence contained about half an ounce of silver, Tower weight,

and was nearly equal to half-a-crown of our present money. Four ounces of

silver, Tower weight, therefore, equal to six shillings and eightpence of

the money of those times, and to near twenty shillings of that of the

present, must have been reckoned a moderate price for the quarter of eight

bushels.

 

This statute is surely a better evidence of what was reckoned, in those

times, a moderate price of grain, than the prices of some particular years,

which have generally been recorded by historians and other writers, on

account of their extraordinary dearness or cheapness, and from which,

therefore, it is difficult to form any judgment concerning what may have

been the ordinary price. There are, besides, other reasons for believing

that, in the beginning of the fourteenth century, and for some time before,

the common price of wheat was not less than four ounces of silver the

quarter, and that of other grain in proportion.

 

In 1309, Ralph de Born, prior of St Augustine’s, Canterbury, gave a feast

upon his installation-day, of which William Thorn has preserved, not only

the bill of fare, but the prices of many particulars. In that feast were

consumed, 1st, fifty-three quarters of wheat, which cost nineteen pounds,

or seven shillings, and twopence a-quarter, equal to about one-and-twenty

shillings and sixpence of our present money ; 2dly, fifty-eight quarters of

malt, which cost seventeen pounds ten shillings, or six shillings a-quarter,

equal to about eighteen shillings of our present money; 3dly, twenty

quarters of oats, which cost four pounds, or four shillings a-quarter, equal

to about twelve shillings of our present money. The prices of malt and oats

seem here to lie higher than their ordinary proportion to the price of

wheat.

 

These prices are not recorded, on account of their extraordinary dearness or

cheapness, but are mentioned accidentally, as the prices actually paid for

large quantities of grain consumed at a feast, which was famous for its

magnificence.

 

In 1262, being the 51st of Henry III. was revived an ancient statute, called

the assize of bread and ale, which, the king says in the preamble, had been

made in the times of his progenitors, some time kings of England. It is

probably, therefore, as old at least as the time of his grandfather, Henry

II. and may have been as old as the Conquest. It regulates the price of

bread according as the prices of wheat may happen to be, from one shilling

to twenty shillings the quarter of the money of those times. But statutes of

this kind are generally presumed to provide with equal care for all

deviations from the middle price, for those below it, as well as for those

above it. Ten shillings, therefore, containing six ounces of silver, Tower

weight, and equal to about thirty shillings of our present money, must, upon

this supposition, have been reckoned the middle price of the quarter of

wheat when this statute was first enacted, and must have continued to be so

in the 51st of Henry III. We cannot, therefore, be very wrong in supposing

that the middle price was not less than one-third of the highest price at

which this statute regulates the price of bread, or than six shillings and

eightpence of the money of those times, containing four ounces of silver,

Tower weight.

 

From these different facts, therefore, we seem to have some reason to

conclude that, about the middle of the fourteenth century, and for a

considerable time before, the average or ordinary price of the quarter of

wheat was not supposed to be less than four ounces of silver, Tower weight.

 

From about the middle of the fourteenth to the beginning of the sixteenth

century, what was reckoned the reasonable and moderate, that is, the

ordinary or average price of wheat, seems to have sunk gradually to about

one half of this price; so as at last to have fallen to about two ounces of

silver, Tower weight, equal to about ten shillings of our present money. It

continued to be estimated at this price till about 1570.

 

In the household book of Henry, the fifth earl of Northumberland, drawn up

in 1512 there are two different estimations of wheat. In one of them it is

computed at six shilling and eightpence the quarter, in the other at five

shillings and eightpence only. In 1512, six shillings and eightpence

contained only two ounces of silver, Tower weight, and were equal to about

ten shillings of our present money.

 

From the 25th of Edward III. to the beginning of the reign of Elizabeth,

during the space of more than two hundred years, six shillings and

eightpence, it appears from several different statutes, had continued to be

considered as what is called the moderate and reasonable, that is, the

ordinary or average price of wheat. The quantity of silver, however,

contained in that nominal sum was, during the course of this period,

continually diminishing in consequence of some alterations which were made

in the coin. But the increase of the value of silver had, it seems, so far

compensated the diminution of the quantity of it contained in the same

nominal sum, that the legislature did not think it worth while to attend to

this circumstance.

 

Thus, in 1436, it was enacted, that wheat might be exported without a

licence when the price was so low as six shillings and eightpence: and in

1463, it was enacted, that no wheat should be imported if the price was not

above six shillings and eightpence the quarter: The legislature had

imagined, that when the price was so low, there could be no inconveniency in

exportation, but that when it rose higher, it became prudent to allow of

importation. Six shillings and eightpence, therefore, containing about the

same quantity of silver as thirteen shillings and fourpence of our present

money (one-third part less than the same nominal sum contained in the time

of Edward III), had, in those times, been considered as what is called the

moderate and reasonable price of wheat.

 

In 1554, by the 1st and 2nd of Philip and Mary, and in 1558, by the 1st of

Elizabeth, the exportation of wheat was in the same manner prohibited,

whenever the price of the quarter should exceed six shillings and

eightpence, which did not then contain two penny worth more silver than the

same nominal sum does at present. But it had soon been found, that to

restrain the exportation of wheat till the price was so very low, was, in

reality, to prohibit it altogether. In 1562, therefore, by the 5th of

Elizabeth, the exportation of wheat was allowed from certain ports, whenever

the price of the quarter should not exceed ten shillings, containing nearly

the same quantity of silver as the like nominal sum does at present. This

price had at this time, therefore, been considered as what is called the

moderate and reasonable price of wheat. It agrees nearly with the estimation

of the Northumberland book in 1512.

 

That in France the average price of grain was, in the same manner, much

lower in the end of the fifteenth and beginning of the sixteenth century,

than in the two centuries preceding, has been observed both by Mr Dupr� de

St Maur, and by the elegant author of the Essay on the Policy of Grain. Its

price, during the same period, had probably sunk in the same manner through

the greater part of Europe.

 

This rise in the value of silver, in proportion to that of corn, may either

have been owing altogether to the increase of the demand for that metal, in

consequence of increasing improvement and cultivation, the supply, in

the mean time, continuing the same as before; or, the demand continuing the

same as before, it may have been owing altogether to the gradual diminution

of the supply: the greater part of the mines which were then known in the

world being much exhausted, and, consequently, the expense of working them

much increased; or it may have been owing partly to the one, and partly to

the other of those two circumstances. In the end of the fifteenth and

beginning of the sixteenth centuries, the greater part of Europe was

approaching towards a more settled from of government than it had enjoyed

for several ages before. The increase of security would naturally increase

industry and improvement; and the demand for the precious metals, as well as

for every other luxury and ornament, would naturally increase with the

increase of riches. A greater annual produce would require a greater

quantity of coin to circulate it ; and a greater number of rich people would

require a greater quantity of plate and other ornaments of silver. It is

natural to suppose, too, that the greater part of the mines which then

supplied the European market with silver might be a good deal exhausted, and

have become more expensive in the working. They had been wrought, many of

them, from the time of the Romans.

 

It has been the opinion, however, of the greater part of those who have

written upon the prices of commodities in ancient times, that, from the

Conquest, perhaps from the invasion of Julius Caesar, till the discovery of

the mines of America, the value of silver was continually diminishing. This

opinion they seem to have been led into, partly by the observations which

they had occasion to make upon the prices both of corn and of some other

parts of the rude produce of land, and partly by the popular notion, that as

the quantity of silver naturally increases in every country with the

increase of wealth, so its value diminishes as it quantity increases.

 

In their observations upon the prices of corn, three different circumstances

seem frequently to have misled them.

 

First. in ancient times, almost all rents were paid in kind; in a certain

quantity of corn, cattle, poultry, etc. It sometimes happened, however, that

the landlord would stipulate, that he should be at liberty to demand of the

tenant, either the annual payment in kind or a certain sum of money instead

of it. The price at which the payment in kind was in this manner exchanged

for a certain sum of money, is in Scotland called the conversion price. As

the option is always in the landlord to take either the substance or the