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When money ]
6 per cent.
years' is at
25 But experience tells us, that neither in
Elizabeth nor king James the First's reigns, when interest was at ten per cent. was land sold for ten; or when it was at eight per cent. for twelve and a half years' purchase, or any thing near the low rate that high use required (if it were true, that the rate of interest governed the price of land) any more than land now yields twentyfive years' purchase, because a great part of the monied men will now let their money, upon good security, at four per cent. Thus we see in fact how little this rule has held at home: and he that will look into Holland will find, that the purchase of land was raised there when their interest fell. This is certain, and past doubt, that the legal interest can never regulate the price of land, since it is plain, that the price of land has never changed with it, in the several changes have been made in the rate of interest by law: nor now that the rate of interest is by law the same through all England, is the price of land every where the same, it being in some parts constantly sold for four or five years' purchase more than in others. Whether you, or I, can tell the reason of this, it matters not to the question in hand : but it being really so, this is plain demonstration against those who pretend to advance and regulate the price of land by a law concerning the interest of money.
But yet I will give you some of my guesses, why the price of land is not regulated (as, at first sight, it seems it should be) by the interest of money. Why it is not regulated by the legal use is manifest, because the rate of money does not follow the standard of the law, but the price of the market: and men, not observing the legal and forced, but the natural and current interest of money, regulate their affairs by that. But why the rate of land does not follow the current interest of money, requires a farther consideration.
All things that are bought and sold raise and fall their price, in proportion as there are more buyers or sellers. Where there are a great many sellers to a few buyers, there, use what art you will, the thing to be sold will be cheap. On the other side, turn the tables, and raise up a great many buyers for a few sellers, and the same thing will immediately grow dear. This rule holds in land as well as all other commodities, and is the reason why in England, at the same time that land in some places is at seventeen or eighteen years' purchase, it is about others, where there are profitable manufactures, at two or three-andtwenty years' purchase; because there (men thriving and getting money, by their industry, and willing to leave their estates to their children in land, as the surest and most lasting provision, and not so liable to casualties as money in untrading or unskilful hands) are many buyers ready always to purchase, but few sellers. For the land thereabout being already possessed by that sort of industrious and thriving men, they have neither need, nor will, to sell. In such places of manufacture, the riches of the one nőt arising from the squandering and waste of another, (as it doth in other places, where men live lazily upon the product of the land) the industry of the people, bringing in increase of wealth from remote parts, makes plenty of money there, without the impoverishing of their neighbours. And, when the thriving tradesman has got more than he can well employ in trade, his next thoughts are to look out for a purchase; but it must be a purchase in the neighbourhood, where the estate may be under his eye, and within convenient distance, that the care and pleasure of his farm may not take him off from the engagements of his calling, nor remove his children too far from him, or the trade he breeds them up in. This seems to be the reason, why in places wherein thriving manufactures have erected themselves, land has been observed to sell quicker, and for more years' purchase, than in other places, as about Halifax in the north, Taunton and Exeter in the west.
This is that then which makes land, as well as other things, dear: plenty of buyers, and but few sellers : and so, by the rule of contraries, plenty of sellers and few buyers makes land cheap.
He that will justly estimate the value of any thing, must consider its quantity in proportion to its vent, for this alone regulates the price. The value of any thing, compared with itself or with a standing measure, is greater, as its quantity is less in proportion to its vent: but, in comparing it, or exchanging it with any other thing, the quantity and vent of that thing too must be allowed for, in the computation of their value. But, because the desire of money is constantly almost every where the same, its vent varies very little, but as its greater scarcity enhances its price, and increases the scramble: there being nothing else that does easily supply the want of it: the lessening its quantity, therefore, always increases its price, and makes an equal portion of it exchange for a greater of any other thing. Thus it comes to pass, that there is no manner of settled proportion between the value of an ounce of silver and any other commodity: for, either varying its quantity in that country, or the commodity changing its quantity in proportion to its vent, their respective values change, i. e. less of one will barter for more of the other: though, in the ordinary way of speaking, it is only said, that the price of the commodity, not of the money, is changed. For example, half an ounce of silver in England will exchange sometimes for a whole bushel of wheat, sometimes for half, sometimes but a quarter, and this it does equally, whether by use it be apt to bring in to the owner six in the hundred of its own weight per annum, or nothing at all: it being only the change of the quantity of wheat to its vent, supposing we have still the same sum of money in the kingdom; or else the change of the quantity of our money in the kingdom, supposing the quantity of wheat, in respect to its vent, be the same too, that makes the change in the price of wheat. For if you alter the quantity, or veni, either side, you presently alter the price, but no other way in the world.
For it is not the being, adding, increasing, or diminishing of any good quality in any commodity, that makes its price greater, or less; but only as it makes its quantity, or vent, greater, or less, in proportion one to another. This will easily appear by two or three instances.
1. The being of any good and useful quantity in any thing neither increases its price, nor indeed makes it have any price at all, but only as it lessens its quantity, or increases its vent; each of these in proportion to one another. What more useful or necessary things are there to the being, or well-being of men, than air and water? and yet these have generally no price at all, nor yield any money: because their quantity is immensely greater than their vent, in most places of the world. But as soon as ever water (for air still offers itself every where, without restraint or inclosure, and therefore is nowhere of any price) comes any where to be reduced into any proportion to its consumption, it begins presently to have a price, and is sometimes sold dearer than wine. Hence it is, that the best and most useful things are commonly the cheapest; because, though their consumption be great, yet the bounty of providence has made their production large, and suitable to it.
2. Nor does the adding an excellency to any commodity raise its price, unless it increase its consumption. For; suppose there should be taught a way (which should be published to the knowledge of every one) to make a medicine of wheat alone, that should infallibly cure the stone: it is certain the discovery of this quality in that grain would give it an excellency very considerable : and yet this would not increase the price of it one farthing in twenty bushels, because its quantity, or vent, would not hereby, to any sensible degree, be altered.
3. Neither does the increasing of any good quality, in any sort of things, make it yield more. For though teasefs be much better this year than any were last, they are not one jot dearer, unless they be fewer too, or the consumption of them greater.
4. Nor does the lessening the good qualities of any sort of commodity lessen its price; which is evident in hops, that are usually dearest those years they are worst. But, if it happen to be a species of commodity whose defects may be supplied by some other, the making of it worse does lessen its price, because it hinders its vent. For, if rye should any year prove generally smutty, or grown, no question it would yield less money than otherwise, because the deficiency of that might be, in some measure, made up by wheat, and other grain. But if it be a sort of commodity whose use no other known thing can supply, it is not its being better, or worse, but its quantity, and vent, is that alone which regulates and determines its value.
To apply it now to money, as capable of different rates of interest. To money, considered in its proper use as a commodity passing in exchange from one to another, all that is done by interest, is but the adding to it by agreement, or public authority, a faculty, which naturally it has not, of increasing every year six per cent. Now if public authority sink use to four per cent. it is certain it diminishes this good quality in money one-third. But yet this making the money of England not one farthing more than it was, it alters not the measures, upon which all changeable commodities increase, or sink their price; and so makes not money exchange for less of any commodity than it would without this alteration of its interest. If lessening use to four per cent should at all alter the quantity of money, and make it less, it would make
money, as it has the nature of a commodity, dearer, i. e. a less quantity of money would exchange for a greater quantity of another commodity, than it would before. Î'his perhaps will appear a little plainer by these following particulars :
1. That the intrinsic, natural worth of any thing, consists in its fitness to supply the necessities, or serve the conveniencies of human life; and the more necessary it is to our being, or the more it contributes to our well-being, the greater is its worth. But yet,
2. That there is no such intrinsic, natural, settled value in any thing, as to make any assigned quantity of it constantly worth any assigned quantity of another.