during the course of the present century, been 
always regulated by the market rate[10]. In 
1720, interest was reduced from the twentieth 
to the fiftieth penny, or from five to two per 
cent. In 1724, it was raised to the thirtieth 
penny, or to three and a third per cent. In 
1725, it was again raised to the twentieth 
penny, or to five per cent. In 1766, during 
the administration of Mr Laverdy, it was reduced 
to the twenty-fifth penny, or to four 
per cent. The AbbĂ© Terray raised it afterwards 
to the old rate of five per cent. The 
supposed purpose of many of those violent reductions 
of interest was to prepare the way 
for reducing that of the public debts; a purpose 
which has sometimes been executed
France is, perhaps, in the present times, not 
so rich a country as England; and though 
the legal rate of interest has in France frequently 
been lower than in England, the 
market rate has generally been higher; for 
there, as in other countries, they have several 
very safe and easy methods of evading the law. 
The profits of trade, I have been assured by 
British merchants who had traded in both 
countries, are higher in France than in England
and it is no doubt upon this account
that many British subjects chuse rather to employ 
their capitals in a country where trade is 
in disgrace, than in one where it is highly respected. 
The wages of labour are lower in 
France than in England. When you go from 
Scotland to England, the difference which you 
may remark between the dress and countenance 
of the common people in the one country 
and in the other, sufficiently indicates the 
difference in their condition. The contrast 
is still greater when you return from France. 
France, though no doubt a richer country 
than Scotland, seems not to be going forward 
so fast. It is a common and even a popular 
opinion in the country, that it is going backwards
an opinion which I apprehend, is ill-founded, 
even with regard to France, but 
which nobody can possibly entertain with regard 
to Scotland, who sees the country now, 
and who saw it twenty or thirty years ago. 
The province of Holland, on the other 
hand, in proportion to the extent of its territory 
and the number of its people, is a richer 
country than England. The government there 
borrow at two per cent. and private people of 
good credit at three. The wages of labour 
are said to be higher in Holland than in England
and the Dutch, it is well known, trade 
upon lower profits than any people in Europe. 
The trade of Holland, it has been pretended 
by some people, is decaying, and it 
may perhaps be true that some particular 
branches of it are so; but these symptoms 
seem to indicate sufficiently that there is no 
general decay. When profit diminishes, merchants 
are very apt to complain that trade decays
though the diminution of profit is the 
natural effect of its prosperity, or of a greater 
stock being employed in it than before. During 
the late war, the Dutch gained the whole 
carrying trade of France, of which they still 
retain a very large share. The great property 
which they possess both in French and 
English funds, about forty millions, it is said 
in the latter (in which, I suspect, however, 
there is a considerable exaggeration), the great 
sums which they lend to private people, in 
countries where the rate of interest is higher 
than in their own, are circumstances which no 
doubt demonstrate the redundancy of their 
stock, or that it has increased beyond what 
they can employ with tolerable profit in the 
proper business of their own country; but 
they do not demonstrate that that business has 
decreased. As the capital of a private man
though acquired by a particular trade, may 
increase beyond what he can employ in it, and 
yet that trade continue to increase too, so may 
likewise the capital of a great nation. 
In our North American and West Indian 
colonies, not only the wages of labour, but the 
interest of money, and consequently the profits 
of stock, are higher than in England. In 
the different colonies, both the legal and the 
market rate of interest run from six to eight 
per cent. High wages of labour and high 
profits of stock, however, are things, perhaps, 
which scarce ever go together, except in the 
peculiar circumstances of new colonies. A 
new colony must always, for some time, be 
more understocked in proportion to the extent 
of its territory, and more underpeopled in proportion 
to the extent of its stock, than the 
greater part of other countries. They have more 
land than they have stock to cultivate. What 
they have, therefore, is applied to the cultivation 
only of what is most fertile and most favourably 
situated, the land near the sea-shore 
and along the banks of navigable rivers
Such land, too, is frequently purchased at a 
price below the value even of its natural produce. 
Stock employed in the purchase and 
improvement of such lands, must yield a very 
large profit, and, consequently, afford to pay 
a very large interest. Its rapid accumulation 
in so profitable an employment enables the 
planter to increase the number of his hands 
faster than he can find them in a new settlement. 
Those whom he can find, therefore, 
are very liberally rewarded. As the colony 
increases, the profits of stock gradually diminish. 
When the most fertile and best situated 
lands have been all occupied, less profit 
can be made by the cultivation of what is inferior 
both in soil and situation, and less interest 
can be afforded for the stock which is 
so employed. In the greater part of our colonies
accordingly, both the legal and the 
market rate of interest have been considerably 
reduced during the course of the present