Nothing is esteemed a more certain sign of the flourishing condition of any nation than the lowness of interest; and with reason, though I believe the cause is somewhat different from what is commonly apprehended. The lowness of interest is generally ascribed to the plenty of money; but money, however plentiful, has no other effect, if fixed, than to raise the price of labour. Silver is more common than gold, and therefore you receive a great quantity of it for the same commodities. But do you pay less interest for it? Interest in Batavia and Jamaica is at 10 per cent., in Portugal at 6; though these places, as we may learn from {p40} the prices of everything, abound much more in gold and silver than either London or Amsterdam.
Were all the gold in England annihilated at once, and one-and-twenty shillings substituted in the place of every guinea, would money be more plentiful and interest lower? No surely; we should only use silver instead of gold. Were gold rendered as common as silver, and silver as common as copper, would money be more plentiful and interest lower? We may assuredly give the same answer. Our shillings would then be yellow, and our halfpence white; and we should have no guineas. No other difference would ever be observed; no alteration on commerce, manufactures, navigation, or interest; unless we imagine that the colour of the metal is of any consequence.
Now, what is so visible in these greater variations of scarcity or abundance of the precious metals must hold in all inferior changes. If the multiplying gold and silver fifteen times makes no difference, much less can the doubling or tripling them. All augmentation has no other effect than to heighten the price of labour and commodities; and even this variation is little more than that of a name. In the progress towards these