advance of commerce and industry, not of the scarcity of gold and silver. Low interest, on the other hand, proceeds from the three opposite circumstances: A small demand for borrowing; great riches to supply that demand; and small profits arising from commerce. And these circumstances are all connected together, and proceed from the increase of industry and commerce, not of gold and silver. We shall endeavour to prove these points as fully and distinctly as possible, and shall begin with the causes and the effects of a great or small demand for borrowing.
When the people have emerged ever so little from a savage state, and their numbers have increased beyond the original multitude, there must immediately arise an inequality of property; and while some possess large tracts of land, others are confined within narrow limits, and some are entirely without any landed property. Those who possess more land than they can labour employ those who possess none, and agree to receive a determinate part of the {p42} product. Thus the landed interest is immediately established; nor is there any settled government, however rude, in which affairs are not on this footing. Of these proprietors of land, some must presently discover themselves to be of different tempers from others; and while one would willingly store up the product of his land for futurity, another desires to consume at present what should suffice for many years. But as the spending a settled revenue is a way of life entirely without occupation, men have so much need of somewhat to fix and engage them, that pleasures, such as they are, will be the pursuit of the greatest part of the landholders, and the prodigals amongst them will always be more numerous than the misers. In a state, therefore, where there is nothing but a landed interest, as there is little frugality, the borrowers must be very numerous, and the rate of interest must hold proportion to it. The difference depends not on the quantity of money, but on the habits and manners which prevail. By this alone the demand for borrowing is increased or diminished. Were money so plentiful as to make an egg be sold for sixpence, so long as there are only landed gentry and peasants in the state, the borrowers must be numerous and interest