Accordingly, we find in Rome that so early as Tiberius’s time interest had again mounted to 6 per cent., though no accident had happened to drain the empire of money. In Trajan’s time money lent on mortgages in Italy bore 6 per cent.; on common securities in Bithynia, 12. And if interest in Spain has not risen to its old pitch, this can be ascribed to nothing but the continuance of the same {p50} cause that sunk it—viz., the large fortunes continually made in the Indies, which come over to Spain from time to time and supply the demand of the borrowers. By this accidental and extraneous cause more money is to be lent in Spain—that is, more money is collected into large sums than would otherwise be found in a state where there are so little commerce and industry.
As to the reduction of interest which has followed in England, France, and other kingdoms of Europe that have no mines, it has been gradual, and has not proceeded from the increase of money, considered merely in itself, but from the increase of industry, which is the natural effect of the former increase, in that interval, before it raises the price of labour and provisions. For to return to the foregoing supposition, if the industry of England had risen as much from other causes (and that rise might easily have happened though the stock of money had remained the same), must not all the same consequences have followed which we observe at present? The same people would, in that case, be found in the kingdom, the same commodities, the same industry, manufactures, and commerce, and consequently the same merchants with the same stocks—that is, with the same command over labour and commodities, only represented by a smaller number of white or yellow pieces, which, being a circumstance of no moment, would only affect the waggoner, porter, and trunk-maker. Luxury, therefore, manufactures, arts, industry, frugality flourishing equally as at present, it is evident that interest must also have been as low, since that is the necessary result of all these circumstances, so far as they determine the profits of commerce and the proportion between the borrowers and lenders in any state.