time, an extensive commerce in lace, stockings, cutlery, and various other branches of manufacture; but watchmaking, and every branch of clockwork, were the articles in which they particularly excelled. They not only made every utensil employed in the manufacture, but had invented several peculiar to themselves; and all sorts of trade, subservient to those principally carried on, had gradually risen up among them. The number of watches annually made was reckoned at 40,000. Not many years ago, the greatest part of the territory contiguous to these villages, which is now covered with flourishing hamlets and fertile pastures, was almost one continued forest. So rapidly, however, has the population increased, that the produce of the country, which was formerly more than sufficient for the whole of the inhabitants, now scarcely furnishes, according to Mr. Coxe, an eighth part of the provisions necessary for the interior consumption, the remainder being drawn from the adjoining province of Franche Comté in France. The truth is, that every stranger who brought a certificate of good behaviour was at liberty to settle in the district, and follow any trade he chose, without restriction.

"The origin of watchmaking," says Mr. Coxe, "in this part of Switzerland, as related by Mr. Osterwald, ancient banneret of Neufchatel, (the historiographer of these mountains,) is extremely curious; and the truth of his account was confirmed to me by several artists both of Locle and La Chaux de Fond. In 1679, one of the inhabitants brought with him from London a watch, the first that had been seen in these parts; which happening to be out of order, he ventured to trust it in the hands of one Daniel John Richard of La Sagne. Richard, after examining the mechanism with great attention, conceived himself capable, and was determined to attempt, to make a watch from the model before him; but to this end he was destitute of every other assistance than the powers of his own native genius. Accordingly, he employed a whole year in inventing and in finishing the several instruments previously necessary for executing his purpose; and in six months from that period, by the sole force of his own penetrating and per

severing talents, he produced a complete watch. But his ambition and industry did not stop here; besides applying himself successfully to the invention of several new instruments useful for the perfection of his work, he took a journey to Geneva, where he gained considerable information in the art. He continued for some time the only man in these parts who could make a watch; but business increasing, he took in and instructed several associates, by whose assistance he was enabled to supply from his single shop all the demands of the neighbouring country. Towards the beginning of the present century, he removed to Locle, where he died in 1741, leaving five sons, who all of them followed their father's occupation. From these the knowledge and practice of the art gradually spread itself, till it at length became almost the universal business of the inhabitants, and the principal cause of the populousness of these mountains."*

Nor has the inventive genius of the people stopped here. A variety of mathematical instruments are to be found in their houses; and several natives have acquired very considerable fortunes by exhibiting mathematical figures and other objects. of mechanical curiosity, in the different countries of Europe.

The point of view, however, in which restraints on the freedom of competition appear most injurious to the public prosperity is, when we attend to the undue advantage which they give to the industry of the towns over that of the country. It is from the country that every town draws its whole subsistence, and all the materials of its industry. "It pays for these chiefly in two ways: first, by sending back to the country a part of those materials wrought up and manufactured; in which case their price is augmented by the wages of the workmen, and the profits of their masters or immediate employers. Secondly, by sending to it a part both of the rude and manufactured produce, either of other countries, or of distant parts of the same country, imported into the town; in which case too the original price

[Sketches of the Natural, Civil, and Political State of Swisserland; in a Series of Letters to William

Melmoth, Esq., 1779. Letter XXVII. pp. 338, 339.]

of those goods is augmented by the wages of the carriers or sailors, and by the profits of the merchants who employ them. In what is gained upon the first of those two branches of commerce, consists the advantage which the town makes by its manufactures; in what is gained upon the second, the advantage of its inland and foreign trade. The wages of the workmen, and the profits of their different employers, make up the whole of what is gained upon both. Whatever regulations, therefore, tend to increase those wages and profits beyond what they otherwise would be, tend to enable the town to purchase, with a smaller quantity of its labour, the produce of a greater quantity of the labour of the country. They give the traders and artificers in the town an advantage over the landlords, farmers, and labourers in the country, and break down that natural equality which would otherwise take place in the commerce which is carried on between them. The whole annual produce of the labour of the society is annually divided between those two different sets of people. By means of those regulations a greater share of it is given to the inhabitants of the town than would otherwise fall to them, and a less to those of the country.

"The price which the town really pays for the provisions and materials annually imported into it, is the quantity of manufactures and other goods annually exported from it. The dearer the latter are sold, the cheaper the former are bought. The industry of the town becomes more, and that of the country less advantageous.

The superiority which the industry of the towns has everywhere, in Europe, over that of the country, is not altogether owing to corporations and corporation laws. It is supported by many other regulations. The high duties upon foreign manufactures, and upon all goods imported by alien merchants, all tend to the same purpose. Corporation laws enable the inhabitants of towns to raise their prices, without fearing to be undersold by the competition of their own countrymen. Those other regulations secure them equally against that of foreigners. The enhancement of price occasioned by both is everywhere finally paid by the landlord, farmers, and labourers of the country

who have seldom opposed the establishment of such monopolies. They have commonly neither inclination nor fitness to enter into combinations; and the clamour and sophistry of merchants and manufacturers, easily persuade them that the private interest of a part, and of a subordinate part, of the society, is the general interest of the whole.

"In Great Britain, the superiority of the industry of the towns over that of the country, seems to have been greater formerly than in the present times. The wages of country labour approach nearer to those of manufacturing labour, and the profits of stock employed in agriculture to those of trading and manufacturing stock, than they are said to have done in the last century, or in the beginning of the present. This change may be regarded as the necessary, though very late, consequence of the extraordinary encouragement given to the industry of the towns. The stock accumulated in them comes in time to be so great, that it can no longer be employed with the ancient profit in that species of industry which is peculiar to them. That industry has its limits like every other; and the increase of stock, by increasing the competition, necessarily reduces the profit. The lowering of profit in the town, forces out stock to the country, where, by creating a new demand for country labour, it necessarily raises its wages. It then spreads itself, if I may say so, over the face of the land, and by being employed in agriculture, is in part restored to the country, at the expense of which, in a great measure, it had originally been accumulated in the town."*

For the explanation of the causes which, in modern Europe, have thus given to the commerce of the towns so decided an advantage over that of the country, I refer to what Mr. Smith has said on the subject in the third and fourth chapters of his Third Book, concerning the rise and progress of cities and towns after the fall of the Roman Empire. On the same subject, too, a great deal of most important and curious information is to be found in the first volume of Dr. Robertson's History of Charles the Fifth.

[Wealth of Nations, Book I. chap. x.; Vol. I. pp. 193-199, tenth edition.]

To this general head of the privileges of corporations, the question concerning the advantages to be derived from universities properly belongs. Some valuable hints on this question have been suggested by Mr. Smith; but I must not at present enter upon the discussion.

Another class of obstructions to the natural distribution of labour and stock in the community, is produced by exclusive companies and monopolies of every description. The enormous length to which monopolies were carried in the reign of Queen Elizabeth, is well known. Mr. Hume tells us, that " she granted her servants and courtiers patents for monopolies; and these patents they sold to others, who were thereby enabled to raise commodities to what price they pleased, and who put invincible restraints upon all commerce, industry, and emulation in the arts. It is astonishing to consider the number and importance of those commodities, which were thus assigned over to patentees. Currants, salt, iron, powder, cards, calf-skins, fells, pouldavies, ox shin-bones, train oil, lists of cloth, pot-ashes, anise-seeds, vinegar, sea-coals, steel, aquavitæ, brushes, pots, bottles, saltpetre, lead, accidence, oil, calaminestone, oil of blubber, glasses, paper, starch, tin, sulphur, new drapery, dried pilchards, transportation of iron ordnance, of beer, of horn, of leather, importation of Spanish wool, of Irish yarn. These are but a part of the commodities which had been appropriated to monopolists.'

"*

These monopolies were, in a great measure, removed by a statute of James First, declaring all monopolies to be "contrary to law, and to the known liberties of the people. It was then supposed, that every subject of England had entire power to dispose of his own actions, provided he did no injury to his fellow-subjects, and that no prerogative of the king, no power of any magistrate, nothing but the authority alone of laws could restrain that unlimited freedom."+

While James, however, called in and annulled all the patents for monopolies which had been granted by his predecessors, and which had extremely fettered every species of domestic industry, exclusive companies still remained,-another species of mono*[History of England, Chap. xliv.] [Ibid. chap. xlix.]

VOL. IX.

B