to their natural rates, the wages of the labour, 
the profits of the stock, and the rent of 
the land, which must be paid in order to bring 
it from the mine to the market. In the greater 
part of the silver mines of Peru, the tax of 
the king of Spain, amounting to a tenth of the 
gross produce, eats up, it has already been observed, 
the whole rent of the land. This tax 
was originally a half; it soon afterwards fell 
to a third, then to a fifth, and at last to a 
tenth, at which rate it still continues. In the 
greater part of the silver mines of Peru, this, 
it seems, is all that remains, after replacing 
the stock of the undertaker of the work, together 
with its ordinary profits; and it seems 
to be universally acknowledged that these profits, 
which were once very high, are now as 
low as they can well be, consistently with carrying 
on the works. 
The tax of the king of Spain was reduced 
to a fifth of the registered silver in 1504[19], 
one-and-forty years before 1545, the date of the 
the discovery of the mines of Potosi. In the 
course of ninety years, or before 1636, these 
mines, the most fertile in all America, had 
time sufficient to produce their full effect, or 
to reduce the value of silver in the European 
market as low as it could well fall, while it 
continued to pay this tax to the king of Spain
Ninety years is time sufficient to reduce any 
commodity, of which there is no monopoly
to its natural price, or to the lowest price at 
which, while it pays a particular tax, it can 
continue to be sold for any considerable time 
The price of silver in the European market 
might, perhaps, have fallen still lower, and it 
might have become necessary either to reduce 
the tax upon it, not only to one-tenth, as in 
1736, but to one twentieth, in the same manner 
as that upon gold, or to give up working 
the greater part of the American mines which 
are now wrought. The gradual increase of 
the demand for silver, or the gradual enlargement 
of the market for the produce of the 
silver mines of America, is probably the cause 
which has prevented this from happening, and 
which has not only kept up the value of silver 
in the European market, but has perhaps even 
raised it somewhat higher than it was about 
the middle of the last century
Since the first discovery of America, the 
market for the produce of its silver mines has 
been growing gradually more and more extensive
First, the market of Europe has become 
gradually more and more extensive. Since 
the discovery of America, the greater part of 
Europe has been much improved. England, 
Holland, France, and Germany; even Sweden
Denmark, and Russia, have all advanced 
considerably, both in agriculture and in manufactures. 
Italy seems not to have gone 
backwards. The fall of Italy preceded the 
conquest of Peru. Since that time it seems 
rather to have recovered a little. Spain and 
Portugal, indeed, are supposed to have gone 
backwards. Portugal, however, is but a very 
small part of Europe, and the declension of 
Spain is not, perhaps, so great as is commonly 
imagined. In the beginning of the sixteenth 
century, Spain was a very poor country, even 
in comparison with France, which has been 
so much improved since that time. It was 
the well known remark of the emperor Charles 
V. who had travelled so frequently through 
both countries, that every thing abounded in 
France, but that every thing was wanting in 
Spain. The increasing produce of the agriculture 
and manufactures of Europe must 
necessarily have required a gradual increase 
in the quantity of silver coin to circulate it; 
and the increasing number of wealthy individuals 
must have required the like increase in 
the quantity of their plate and other ornaments 
of silver
Secondly, America is itself a new market
for the produce of its own silver mines
and as its advances in agriculture, industry, 
and population, are much more rapid than 
those of the most thriving countries in Europe
its demand must increase much more 
rapidly. The English colonies are altogether 
a new market, which, partly for coin, and 
partly for plate, requires a continual augmenting 
supply of silver through a great continent 
where there never was any demand before. 
The greater part, too, of the Spanish 
and Portuguese colonies, are altogether new 
markets. New Granada, the Yucatan, Paraguay
and the Brazils, were, before discovered 
by the Europeans, inhabited by savage nations
who had neither arts nor agriculture
A considerable degree of both has now been 
introduced into all of them. Even Mexico 
and Peru, though they cannot be considered 
as altogether new markets, are certainly much 
more extensive ones than they ever were before. 
After all the wonderful tales which 
have been published concerning the splendid 
state of those countries in ancient times, whoever 
reads, with any degree of sober judgment, 
the history of their first discovery and 
conquest, will evidently discern that, in arts
agriculture, and commerce, their inhabitants 
were much more ignorant than the Tartars of 
the Ukraine are at present. Even the Peruvians
the more civilized nation of the two, 
though they made use of gold and silver as 
ornaments, had no coined money of any kind. 
Their whole commerce was carried on by barter
and there was accordingly scarce any division 
of labour among them. Those who 
cultivated the ground, were obliged to build 
their own houses, to make their own household 
furniture, their own clothes, shoes, and 
instruments of agriculture. The few artificers 
among them are said to have been all maintained