Of　Interest
  by　David　Hume
  Nothing　is　esteemed　a　more　certain　sign　of　the　flourishing
  condition　of　any　nation　than　the　lowness　of　interest：　And　with　reason；
  though　I　believe　the　cause　is　somewhat　different　from　what　is　commonly
  apprehended。　Lowness　of　interest　is　generally　ascribed　to　plenty　of
  money。　But　money；　however　plentiful；　has　no　other　effect；　if　fixed；
  than　to　raise　the　price　of　labour。　Silver　is　more　common　than　gold；
  and　therefore　you　receive　a　greater　quantity　of　it　for　the　same
  commodities。　But　do　you　pay　less　interest　for　it？　Interest　in　BATAVIA
  and　JAMAICA　is　at　10　per　cent。　in　PORTUGAL　at　6；　though　these　places；
  as　we　may　learn　from　the　prices　of　every　thing；　abound　more　in　gold
  and　silver　than　either　LONDON　or　AMSTERDAM。
  Were　all　the　gold　in　ENGLAND　annihilated　at　once；　and　one　and
  twenty　shillings　substituted　in　the　place　of　every　guinea；　would　money
  be　more　plentiful　or　interest　lower？　No　surely：　We　should　only　use
  silver　instead　of　gold。　Were　gold　rendered　as　common　as　silver；　and
  silver　as　common　as　copper；　would　money　be　more　plentiful　or　interest
  lower？　We　may　assuredly　give　the　same　answer。　Our　shillings　would　then
  be　yellow；　and　our　halfpence　white；　and　we　should　have　no　guineas。　No
  other　difference　would　ever　be　observed；　no　alteration　on　commerce；
  manufactures；　navigation；　or　interest；　unless　we　imagine；　that　the
  colour　of　the　metal　is　of　any　consequence。
  Now；　what　is　so　visible　in　these　greater　variations　of　scarcity　or
  abundance　in　the　precious　metals；　must　hold　in　all　inferior　changes。
  If　the　multiplying　of　gold　and　silver　fifteen　times　makes　no
  difference；　much　less　can　the　doubling　or　tripling　them。　All
  augmentation　has　no　other　effect　than　to　heighten　the　price　of　labour
  and　commodities；　and　even　this　variation　is　little　more　than　that　of　a
  name。　In　the　progress　towards　these　changes；　the　augmentation　may　have
  some　influence；　by　exciting　industry；　but　after　the　prices　are
  settled；　suitably　to　the　new　abundance　of　gold　and　silver；　it　has　no
  manner　of　influence。
  An　effect　always　holds　proportion　with　its　cause。　Prices　have
  risen　near　four　times　since　the　discovery　of　the　INDIES；　and　it　is
  probable　gold　and　silver　have　multiplied　much　more：　But　interest　has
  not　fallen　much　above　half。　The　rate　of　interest；　therefore；　is　not
  derived　from　the　quantity　of　the　precious　metals。
  Money　having　chiefly　a　fictitious　value；　the　greater　or　less
  plenty　of　it　is　of　no　consequence；　if　we　consider　a　nation　within
  itself；　and　the　quantity　of　specie；　when　once　fixed；　though　ever　so
  large；　has　no　other　effect；　than　to　oblige　every　one　to　tell　out　a
  greater　number　of　those　shining　bits　of　metal；　for　clothes；　furniture
  or　equipage；　without　encreasing　any　one　convenience　of　life。　If　a　man
  borrow　money　to　build　a　house；　he　then　carries　home　a　greater　load；
  because　the　stone；　timber；　lead；　glass；　&c。　with　the　labour　of　the
  masons　and　carpenters；　are　represented　by　a　greater　quantity　of　gold
  and　silver。　But　as　these　metals　are　considered　chiefly　as
  representations；　there　can　no　alteration　arise；　from　their　bulk　or
  quantity；　their　weight　or　colour；　either　upon　their　real　value　or
  their　interest。　The　same　interest；　in　all　cases；　bears　the　same
  proportion　to　the　sum。　And　if　you　lent　me　so　much　labour　and　so　many
  commodities；　by　receiving　five　per　cent。　you　always　receive
  proportional　labour　and　commodities；　however　represented；　whether　by
  yellow　or　white　coin；　whether　by　a　pound　or　an　ounce。　It　is　in　vain；
  therefore；　to　look　for　the　cause　of　the　fall　or　rise　of　interest　in
  the　greater　or　less　quantity　of　gold　and　silver；　which　is　fixed　in　any
  nation。
  High　interest　arises　from　three　circumstances：　A　great　demand　for
  borrowing；　little　riches　to　supply　that　demand；　and　great　profits
  arising　from　commerce：　And　these　circumstances　are　a　clear　proof　of
  the　small　advance　of　commerce　and　industry；　not　of　the　scarcity　of
  gold　and　silver。　Low　interest；　on　the　other　hand；　proceeds　from　the
  three　opposite　circumstances：　A　small　demand　for　borrowing；　great
  riches　to　supply　that　demand；　and　small　profits　arising　from　commerce：
  And　these　circumstances　are　all　connected　together；　and　proceed　from
  the　encrease　of　industry　and　commerce；　not　of　gold　and　silver。　We
  shall　endeavour　to　prove　these　points；　and　shall　begin　with　the　causes
  and　the　effects　of　a　great　or　small　demand　for　borrowing。
  When　a　people　have　emerged　ever　so　little　from　a　savage　state；　and
  their　numbers　have　encreased　beyond　the　original　multitude；　there　must
  immediately　arise　an　inequality　of　property；　and　while　some　possess
  large　tracts　of　land；　others　are　confined　within　narrow　limits；　and
  some　are　entirely　without　any　landed　property。　Those　who　possess　more
  land　than　they　can　labour；　employ　those　who　possess　none；　and　agree　to
  receive　a　determinate　part　of　the　product。　Thus　the　landed　interest　is
  immediately　established；　nor　is　there　any　settled　government；　however
  rude；　in　which　affairs　are　not　on　this　footing。　Of　these　proprietors
  of　land；　some　must　presently　discover　themselves　to　be　of　different
  tempers　from　others；　and　while　one　would　willingly　store　up　the
  produce　of　his　land　for　futurity；　another　desires　to　consume　at
  present　what　should　suffice　for　many　years。　But　as　the　spending　of　a
  settled　revenue　is　a　way　of　life　entirely　without　occupation；　men　have
  so　much　need　of　somewhat　to　fix　and　engage　them；　that　pleasures；　such
  as　they　are；　will　be　the　pursuit　of　the　greater　part　of　the
  landholders；　and　the　prodigals　among　them　will　always　be　more　numerous
  than　the　misers。　In　a　state；　therefore；　where　there　is　nothing　but　a
  landed　interest；　as　there　is　little　frugality；　the　borrowers　must　be
  very　numerous；　and　the　rate　of　interest　must　hold　proportion　to　it。
  The　difference　depends　not　on　the　quantity　of　money；　but　on　the　habits
  and　manners　which　prevail。　By　this　alone　the　demand　for　borrowing　is
  encreased　or　diminished。　Were　money　so　plentiful　as　to　make　an　egg　be
  sold　for　sixpence；　so　long　as　there　are　only　landed　gentry　and
  peasants　in　the　state；　the　borrowers　must　be　numerous；　and　interest
  high。　The　rent　for　the　same　farm　would　be　heavier　and　more　bulky：　But
  the　same　idleness　of　the　landlord；　with　the　higher　price　of
  commodities；　would　dissipate　it　in　the　same　time；　and　produce　the　same
  necessity　and　demand　for　borrowing。
  Nor　is　the　case　different　with　regard　to　the　second　circumstance
  which　we　proposed　to　consider；　namely；　the　great　or　little　riches　to
  supply　the　demand。　This　effect　also　depends　on　the　habits　and　way　of
  living　of　the　people；　not　on　the　quantity　of　gold　and　silver。　In　order
  to　have；　in　any　state；　a　great　number　of　lenders；　it　is　not　sufficient
  nor　requisite；　that　there　be　great　abundance　of　the　precious　metals。
  It　is　only　requisite；　that　the　property　or　command　of　that　quantity；
  which　is　in　the　state；　whether　great　or　small；　should　be　collected　in
  particular　hands；　so　as　to　form　considerable　sums；　or　compose　a　great
  monied　interest。　This　begets　a　number　of　lenders；　and　sinks　the　rate
  of　usury；　and　this　I　shall　venture　to　affirm；　depends　not　on　the
  quantity　of　specie；　but　on　particular　manners　and　customs；　which　make
  the　specie　gather　into　separate　sums　or　masses　of　considerable　value。
  For　suppose；　that；　by　miracle；　every　man　in　GREAT　BRITAIN　should
  have　five　pounds　slipt　into　his　pocket　in　one　night；　this　would　much
  more　than　double　the　whole　money　that　is　at　present　in　the　kingdom；
  yet　there　would　not　next　day；　nor　for　some　time；　be　any　more　lenders；
  nor　any　variation　in　the　interest。　And　were　there　nothing　but
  landlords　and　peasants　in　the　state；　this　money；　however　abundant；
  could　never　gather　into　sums；　and　would　only　serve　to　encrease　the
  prices　of　every　thing；　without　any　farther　consequence。　The　prodigal
  landlord　dissipates　it；　as　fast　as　he　receives　it；　and　the　beggarly
  peasant　has　no　means；　nor　view；　nor　ambition　of　obtaining　above　a　bare
  livelihood。　The　overplus　of　borrowers　above　that　of　lenders　continuing
  still　the　same；　there　will　follow　no　reduction　of　interest。　That
  depends　upon　another　principle；　and　must　proceed　from　an　encrease　of
  industry　and　frugality；　of　arts　and　commerce。
  Every　thing　useful　to　the　life　of　man　arises　from　the　ground；　but
  few　things　arise　in　that　condition　which　is　requisite　to　render　them
  useful。　There　must；　therefore；　beside　the　peasants　and　the　proprietors
  of　land；　be　another　rank　of　men；　who　receiving　from　the　former　the
  rude　materials；　work　them　into　their　proper　form；　and　retain　part　for
  their　own　use　and　subsistence。　In　the　infancy　of　society；　these
  contracts　between　the　artisans　and　the　peasants；　and　between　one
  species　of　artisans　and　another　are　commonly　entered　into　immediately
  by　the　persons　themselves；　who；　being　neighbours；　are　easily
  acquainted　with　each　other's　necessities；　and　can　lend　their　mutual
  assistance　to　supply　them。　But　when　men's　industry　encreases；　and
  their　views　enlarge；　it　is　found；　that　the　most　remote　parts　of　the
  state　can　assist　each　other　as　well　as　the　more　contiguous；　and　that
  this　intercourse　of　good　offices　may　be　carried　on　to　the　greatest
  extent　a