century. As riches, improvement, and population
have increased, interest has declined
The wages of labour do not sink with the profits 
of stock. The demand for labour increases 
with the increase of stock, whatever be its 
profits; and after these are diminished, stock 
may not only continue to increase, but to increase 
much faster than before. It is with industrious 
nations, who are advancing in the 
acquisition of riches, as with industrious individuals
A great stock, though with small 
profits, generally increases faster than a small 
stock with great profits. Money, says the proverb
makes money. When you have got a 
little, it is often easy to get more. The great 
difficulty is to get that little. The connection 
between the increase of stock and that of industry, 
or of the demand for useful labour
has partly been explained already, but will be 
explained more fully hereafter, in treating of 
the accumulation of stock
The acquisition of new territory, or of new 
branches of trade, may sometimes raise the 
profits of stock, and with them the interest of 
money, even in a country which is fast advancing 
in the acquisition of riches. The 
stock of the country, not being sufficient for 
the whole accession of business which such acquisitions 
present to the different people among 
whom it is divided, is applied to those particular 
branches only which afford the greatest 
profit. Part of what had before been employed 
in other trades, is necessarily withdrawn 
from them, and turned into some of the new 
and more profitable ones. In all those old 
trades, therefore, the competition comes to be 
less than before. The market comes to be 
less fully supplied with many different sorts 
of goods. Their price necessarily rises more 
or less, and yields a greater profit to those who 
deal in them, who can, therefore, afford to 
borrow at a higher interest. For some time 
after the conclusion of the late war, not only 
private people of the best credit, but some of 
the greatest companies in London, commonly 
borrowed at five per cent. who, before that, 
had not been used to pay more than four, and 
four and a half per cent. The great accession 
both of territory and trade by our acquisitions 
in North America and the West Indies, will 
sufficiently account for this, without supposing 
any diminution in the capital stock of the 
society. So great an accession of new business 
to be carried on by the old stock, must 
necessarily have diminished the quantity employed 
in a great number of particular branches
in which the competition being less, the 
profits must have been greater. I shall hereafter 
have occasion to mention the reasons 
which dispose me to believe that the capital 
stock of Great Britain was not diminished
even by the enormous expense of the late war
The diminution of the capital stock of the 
society, or of the funds destined for the maintenance 
of industry, however, as it lowers the 
wages of labour, so it raises the profits of 
stock, and consequently the interest of money
By the wages of labour being lowered, the 
owners of what stock remains in the society 
can bring their goods at less expense to market 
than before; and less stock being employed 
in supplying the market than before, they 
can sell them dearer. Their goods cost them 
less, and they get more for them. Their profits
therefore, being augmented at both ends
can well afford a large interest. The great 
fortunes so suddenly and so easily acquired in 
Bengal and the other British settlements in 
the East Indies, may satisfy us, that as the 
wages of labour are very low, so the profits of 
stock are very high in those ruined countries
The interest of money is proportionably so. 
In Bengal, money is frequently lent to the 
farmers at forty, fifty, and sixty per cent. and 
the succeeding crop is mortgaged for the payment
As the profits which can afford such 
an interest must eat up almost the whole rent 
of the landlord, so such enormous usury must 
in its turn eat up the greater part of those 
profits. Before the fall of the Roman republic, 
a usury of the same kind seems to have 
been common in the provinces, under the ruinous 
administration of their proconsuls. The 
virtuous Brutus lent money in Cyprus at 
eight-and-forty per cent. as we learn from the 
letters of Cicero. 
In a country which had acquired that full 
complement of riches which the nature of its 
soil and climate, and its situation with respect 
to other countries, allowed it to acquire, which 
could, therefore, advance no further, and 
which was not going backwards, both the 
wages of labour and the profits of stock would 
probably be very low. In a country fully 
peopled in proportion to what either its territory 
could maintain, or its stock employ, the 
competition for employment would necessarily 
be so great as to reduce the wages of labour 
to what was barely sufficient to keep up the 
number of labourers, and the country being 
already fully peopled, that number could never 
be augmented. In a country fully stocked 
in proportion to all the business it had to 
transact, as great a quantity of stock would 
be employed in every particular branch as the 
nature and extent of the trade would admit. 
The competition, therefore, would everywhere 
be as great, and, consequently, the ordinary 
profit as low as possible. 
But, perhaps, no country has ever yet arrived 
at this degree of opulence. China seems 
to have been long stationary, and had, probably, 
long ago acquired that full complement 
of riches which is consistent with the nature 
of its laws and institutions. But this complement 
may be much inferior to what, with 
other laws and institutions, the nature of its 
soil, climate, and situation, might admit of. 
A country which neglects or despises foreign 
commerce, and which admits the vessels of