vanity which directs that of all the other great 
proprietors in their dominions. The insignificant 
pageantry of their court becomes every 
day more brilliant; and the expense of it not 
only prevents accumulation, but frequently 
encroaches upon the funds destined for more 
necessary expenses. What Dercyllidas said 
of the court of Persia, may be applied to that 
of several European princes, that he saw there 
much splendour, but little strength, and many 
servants, but few soldiers. 
The importation of gold and silver is not 
the principal, much less the sole benefit, which 
a nation derives from its foreign trade. Between 
whatever places foreign trade is carried 
on, they all of them derive two distinct benefits 
from it. It carries out that surplus part 
of the produce of their land and labour for 
which there is no demand among them, and 
brings back in return for it something else for 
which there is a demand. It gives a value to 
their superfluities, by exchanging them for 
something else, which may satisfy a part of 
their wants and increase their enjoyments. By 
means of it, the narrowness of the home market 
does not hinder the division of labour in 
any particular branch of art or manufacture 
from being carried to the highest perfection. 
By opening a more extensive market for whatever 
part of the produce of their labour may 
exceed the home consumption, it encourages 
them to improve its productive power, and to 
augment its annual produce to the utmost, and 
thereby to increase the real revenue and wealth 
of the society. These great and important 
services foreign trade is continually occupied 
in performing to all the different countries 
between which it is carried on. They all derive 
great benefit from it, though that in which 
the merchant resides generally derives the 
greatest, as he is generally more employed in 
supplying the wants, and carrying out the superfluities 
of his own, than of any other particular 
country. To import the gold and silver 
which may be wanted into the countries which 
have no mines, is, no doubt, a part of the business 
of foreign commerce. It is, however, 
a most insignificant part of it. A country 
which carried on foreign trade merely upon 
this account, could scarce have occasion to 
freight a ship in a century
It is not by the importation of gold and silver 
that the discovery of America has enriched 
Europe. By the abundance of the American 
mines, those metals have become cheaper
A service of plate can now be purchased 
for about a third part of the corn, or a third 
part of the labour, which it would have cost 
in the fifteenth century. With the same annual 
expense of labour and commodities, Europe 
can annually purchase about three times 
the quantity of plate which it could have purchased 
at that time. But when a commodity 
comes to be sold for a third part of what had 
been its usual price, not only those who purchased 
it before can purchase three times their 
former quantity, but it is brought down to the 
level of a much greater number of purchasers, 
perhaps to more than ten, perhaps to more 
than twenty times the former number. So 
that there may be in Europe at present, not 
only more than three times, but more than 
twenty or thirty times the quantity of plate 
which would have been in it, even in its present 
state of improvement, had the discovery 
of the American mines never been made. So 
far Europe has, no doubt, gained a real conveniency
though surely a very trifling one. 
The cheapness of gold and silver renders those 
metals rather less fit for the purposes of money 
than they were before. In order to make 
the same purchases, we must load ourselves 
with a greater quantity of them, and carry about 
a shilling in our pocket, where a groat 
would have done before. It is difficult to say 
which is most trifling, this inconveniency, or 
the opposite conveniency. Neither the one 
nor the other could have made any very essential 
change in the state of Europe. The 
discovery of America, however, certainly made 
a most essential one. By opening a new and 
inexhaustible market to all the commodities of 
Europe, it gave occasion to new divisions of 
labour and improvements of art, which in the 
narrow circle of the ancient commerce could 
never have taken place, for want of a market 
to take off the greater part of their produce. 
The productive powers of labour were improved, 
and its produce increased in all the 
different countries of Europe, and together 
with it the real revenue and wealth of the inhabitants. 
The commodities of Europe were 
almost all new to America, and many of those 
of America were new to Europe. A new set 
of exchanges, therefore, began to take place
which had never been thought of before, and 
which should naturally have proved as advantageous 
to the new, as it certainly did to the 
old continent. The savage injustice of the 
Europeans rendered an event, which ought to 
have been beneficial to all, ruinous and destructive 
to several of those unfortunate countries
The discovery of a passage to the East Indies 
by the Cape of Good Hope, which happened 
much about the same time, opened perhaps 
a still more extensive range to foreign 
commerce, than even that of America, notwithstanding 
the greater distance. There were 
but two nations in America, in any respect, 
superior to the savages, and these were destroyed 
almost as soon as discovered. The 
rest were mere savages. But the empires of 
China, Indostan, Japan, as well as several 
others in the East Indies, without having 
richer mines of gold or silver, were, in every 
other respect, much richer, better cultivated, 
and more advanced in all arts and manufactures, 
than either Mexico or Peru, even though 
we should credit, what plainly deserves no