Some Considerations of the Lowering of Interest [14]
of Money, so much you add to the price of other Things, which are exchang'd for it; the raising of the price of any thing being no more but the addition to its value in respect of Money, or, which is all one, lessening the value of Money. For Example: Should the value of Gold be brought down to that of Silver, One hundred Guineas would purchase little more Corn, Wool, or Land, than One hundred shillings, and so the Value of Money being brought lower, say they, the price of other Things will rise; and the falling of Interest from Six pound to Four pound per Cent. is taking away so much of the price of Money, and so consequently the lessening its value. The mistake of this plausible way of Reasoning will be easily discovered, when we consider that the measure of the value of Money, in proportion to any thing purchasable by it, is the quantity of the ready Money we have, in Comparison with the quantity of that thing and its Vent; or which amounts to the same thing, The price of any Commodity rises or falls, by the proportion of the number of Buyers and Sellers; This rule holds Universally in all Things that are to be bought and Sold, bateing now and then an extravagant Phancy of some particular Person, which never amounts to so considerable a part of Trade as to make any thing in the account worthy to be thought an Exceprion to this Rule. The Vent of any Thing depends upon its Necessity or Usefulness, as Convenience, or Opinion guided by Phancy or fashion shall determine. The Vent of any Commodity comes to be increased or decreased as a greater part of the Running Cash of the Nation is designed to be laid out by several People at the same time rather in that, than another, as we see in the change of Fashions. I shall begin first with the Necessaries or Conveniencies of Life, and the Consumable Commodities subservient thereunto; and shew, That the Value ofMoney in respect of those depends only on the Plenty or Scarcity of Money in proportion to the Plenty and Scarcity of those things, and not on what Interest shall by Necessity, Law, or Contract be at that time laid on the borrowing of Money: and then afterwards I shall shew that the same holds in Land. There is nothing more confirmed by daily Experience, than that Men give any Portion of Money for whatsoever is absolutely necessary, rather than go without it. And in such things, the Scarcity of them alone makes their Prices. As for Example. Let us suppose half an Ounce of Silver, or half a Crown now in England, is worth a Bushel of Wheat: But should there be next Year a great scarcity of Wheat in England, and a proportionable want of all other Food, five Ounces of Silver would perhaps in Exchange purchase but one Bushel of Wheat: So that Money would be then nine Tenths less worth in respect of Food, though at the same value it was before, in respect of other Things, that kept their former proportion, in their quantity and Consumption. By the like proportions of Increase and Decrease, does the value of Things, more or less convenient, rise and fall in respect of Money, only with this difference, that things absolutely necessary for Life must be had at any Rate; but Things convenient will be had only as they stand in preference with other Conveniencies: And therefore in any one of these Commodities, the value rises only as its quantity is less, and vent greater, which depends upon its being preferr'd to other Things in its Consumption. For supposing that at the same time that there is a great scarcity of Wheat, and other Grain, there were a considerable quantity of Oats, Men no question would give far more for Wheat than Oats, as being the healthier, pleasanter, and more convenient Food: But since Oats would serve to supply that absolute necessity of sustaining Life, Men would not rob themselves of all other Conveniencies of Life, by paying all their Money for Wheat, when Oats, that are cheaper, though with some inconvenience, would supply that Defect. It may then so happen at the same time, that half an Ounce of Silver, that the Year before would buy