The money price of labour in Great Britain has, indeed, risen during the course of the present century.This, however, seems to be the effect, not so much of any diminution in the value of silver in the European market, as of an increase in the demand for labour in Great Britain, arising from the great, and almost universal prosperity of the country.In France, a country not altogether so prosperous, the money price of labour has, since the middle of the last century, been observed to sink gradually with the average money price of corn.Both in the last century and in the present the day-wages of common labour are there said to have been pretty uniformly about the twentieth part of the average price of the septier of wheat, a measure which contains a little more than four Winchester bushels.In Great Britain the real recompense of labour, it has already been shown, the real quantities of the necessaries and conveniencies of life which are given to the labourer, has increased considerably during the course of the present century.The rise in its money price seems to have been the effect, not of any diminution of the value of silver in the general market of Europe, but of a rise in the real price of labour in the particular market of Great Britain, owing to the peculiarly happy circumstances of the country.
For some time after the first discovery of America, silver would continue to sell at its former, or not much below its former price.The profits of mining would for some time be very great, and much above their natural rate.Those who imported that metal into Europe, however, would soon find that the whole annual importation could not be disposed of at this high price.Silver would gradually exchange for a smaller and a smaller quantity of goods.Its price would sink gradually lower and lower till it fell to its natural price, or to what was just sufficient to pay, according to their natural rates, the wages of the labour, the profits of the stock, and the rent of the land, which must be paid in order to bring it from the mine to the market.In the greater part of the silver mines of Peru, the tax of the King of Spain, amounting to a tenth of the gross produce, eats up, it has already been observed, the whole rent of the land.This tax was originally a half; it soon afterwards fell to a third, then to a fifth, and at last to a tenth, at which rate it still continues.
In the greater part of the silver mines of Peru this, it seems, is all that remains after replacing the stock of the undertaker of the work, together with its ordinary profits; and it seems to be universally acknowledged that these profits, which were once very high, are now as low as they can well be, consistently with carrying on their works.
The tax of the King of Spain was reduced to a fifth part of the registered silver in 1504, one-and-forty years before 1545, the date of the discovery of the mines of Potosi.In the course of ninety years, or before 1636, these mines, the most fertile in all America, had time sufficient to produce their full effect, or to reduce the value of silver in the European market as low as it could well fall, while it continued to pay this tax to the King of Spain.Ninety years is time sufficient to reduce any commodity, of which there is no monopoly, to its natural price, or to the lowest price at which, while it pays a particular tax, it can continue to be sold for any considerable time together.
The price of silver in the European market might perhaps have fallen still lower, and it might have become necessary either to reduce the tax upon it, not only to one tenth, as in 1736, but to one twentieth, in the same manner as that upon gold, or to give up working the greater part of the American mines which are now wrought.The gradual increase of the demand for silver, or the gradual enlargement of the market for the produce of the silver mines of America, is probably the cause which has prevented this from happening, and which has not only kept up the value of silver in the European market, but has perhaps even raised it somewhat higher than it was about the middle of the last century.
Since the first discovery of America, the market for the produce of its silver mines has been growing gradually more and more extensive.
First, the market of Europe has become gradually more and more extensive.Since the discovery of America, the greater part of Europe has been much improved.England, Holland, France, and Germany; even Sweden, Denmark, and Russia, have all advanced considerably both in agriculture and in manufactures.Italy seems not to have gone backwards.The fall of Italy preceded the conquest of Peru.Since that time it seems rather to have recovered a little.Spain and Portugal, indeed, are supposed to have gone backwards.Portugal, however, is but a very small part of Europe, and the declension of Spain is not, perhaps, so great as is commonly imagined.In the beginning of the sixteenth century, Spain was a very poor country, even in comparison with France, which has been so much improved since that time.It was the well known remark of the Emperor Charles V, who had travelled so frequently through both countries, that everything abounded in France, but that everything was wanting in Spain.The increasing produce of the agriculture and manufactures of Europe must necessarily have required a gradual increase in the quantity of silver coin to circulate it; and the increasing number of wealthy individuals must have required the like increase in the quantity of their plate and other ornaments of silver.