An inquiry into the nature and causes of the wealth of

750

The Wealth of Nations

sidered as usury, and prohibited bylaw, would have been still more

so. In those times of violence and disorder, besides, it was conve-

nient to have a hoard of money at hand, that in case they should

be driven from their own home, they might have something of

known value to carry with them to some place of safety. The same

violence which made it convenient to hoard, made it equally con-

venient to conceal the hoard. The frequency of treasure-trove, or

of treasure found, of which no owner was known, sufficiently dem-

onstrates the frequency, in those times, both of hoarding and of

concealing the hoard. Treasure-trove was then considered as an

important branch of the revenue of the sovereign. All the treasure-

trove of the kingdom would scarce, perhaps, in the present times,

make an important branch of the revenue of a private gentleman

of a good estate.

The same disposition, to save and to hoard, prevailed in the

sovereign, as well as in the subjects. Among nations, to whom

commerce and manufacture are little known, the sovereign, it has

already been observed in the Fourth book, is in a situation which

naturally disposes him to the parsimony requisite for accumula-

tion. In that situation, the expense, even of a sovereign, cannot be

directed by that vanity which delights in the gaudy finery of a

court. The ignorance of the times affords but few of the trinkets in

which that finery consists. Standing armies are not then neces-

sary; so that the expense, even of a sovereign, like that of any other

great lord can be employed in scarce any thing but bounty to his

tenants, and hospitality to his retainers. But bounty and hospital-

ity very seldom lead to extravagance; though vanity almost always

does. All the ancient sovereigns of Europe, accordingly, it has al-

ready been observed, had treasures. Every Tartar chief, in the present

times, is said to have one.

In a commercial country, abounding with every sort of expen-

sive luxury, the sovereign, in the same manner as almost all the

great proprietors in his dominions, naturally spends a great part

of his revenue in purchasing those luxuries. His own and the

neighbouring countries supply him abundantly with all the costly

trinkets which compose the splendid, but insignificant, pageantry

of a court. For the sake of an inferior pageantry of the same kind,

his nobles dismiss their retainers, make their tenants independent,

and become gradually themselves as insignificant as the greater

part of the wealthy burghers in his dominions. The same frivolous

passions, which influence their conduct, influence his. How can it

be supposed that he should be the only rich man in his dominions

who is insensible to pleasures of this kind? If he does not, what he

is very likely to do, spend upon those pleasures so great a part of

his revenue as to debilitate very much the defensive power of the

state, it cannot well be expected that he should not spend upon

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751

Adam Smith

them all that part of it which is over and above what is necessary

for supporting that defensive power. His ordinary expense becomes

equal to his ordinary revenue, and it is well if it does not fre-

quently exceed it. The amassing of treasure can no longer be ex-

pected; and when extraordinary exigencies require extraordinary

expenses, he must necessarily call upon his subjects for an extraor-

dinary aid. The present and the late king of Prussia are the only

great princes of Europe, who, since the death of Henry IV. of

France, in 1610, are supposed to have amassed any considerable

treasure. The parsimony which leads to accumulation has become

almost as rare in republican as in monarchical governments. The

Italian republics, the United Provinces of the Netherlands, are all

in debt. The canton of Berne is the single republic in Europe which

has amassed any considerable treasure. The other Swiss republics

have not. The taste for some sort of pageantry, for splendid build-

ings, at least, and other public ornaments, frequently prevails as

much in the apparently sober senate-house of a little republic, as

in the dissipated court of the greatest king.

The want of parsimony, in time of peace, imposes the necessity

of contracting debt in time of war. When war comes, there is no

money in the treasury, but what is necessary for carrying on the

ordinary expense of the peace establishment. In war, an establish-

ment of three or four times that expense becomes necessary for

the defence of the state; and consequently, a revenue three or four

times greater than the peace revenue. Supposing that the sover-

eign should have, what he scarce ever has, the immediate means of

augmenting his revenue in proportion to the augmentation of his

expense; yet still the produce of the taxes, from which this increase

of revenue must be drawn, will not begin to come into the trea-

sury, till perhaps ten or twelve months after they are imposed. But

the moment in which war begins, or rather the moment in which

it appears likely to begin, the army must be augmented, the fleet

must be fitted out, the garrisoned towns must be put into a pos-

ture of defence; that army, that fleet, those garrisoned towns, must

be furnished with arms, ammunition, and provisions. An imme-

diate and great expense must be incurred in that moment of im-

mediate danger, which will not wait for the gradual and slow re-

turns of the new taxes. In this exigency, government can have no

other resource but in borrowing.

The same commercial state of society which, by the operation

of moral causes, brings government in this manner into the neces-

sity of borrowing, produces in the subjects both an ability and an

inclination to lend. If it commonly brings along with it the neces-

sity of borrowing, it likewise brings with it the facility of doing so.

A country abounding with merchants and manufacturers, nec-

essarily abounds with a set of people through whose hands, not

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