Part 3b Digression Part 1

Digression on the Variations in the Value of Silver During the Last Four Centuries

by Adam Smith Icon

First Period 1262-1570

96 In 1350 and for some time before, the average price of the quarter of wheat in England was not lower than 4 ounces of silver Tower-weight, equal to 20 shillings today.

It fell gradually. From 1500 to 1570, its price was 2 ounces of silver, equal to 10 shillings today.

97 In 1350, the 25th of Edward 3rd enacted The Statute of Labourers.

It complains much of the insolence of servants who tried to raise their wages, and so it ordained that=

  • all servants and labourers should be content with the same wages and liveries (clothes and provisions) which they received from 1341 to 1345.
  • Their livery wheat should not be higher than 10 pence a bushel.
  • The master can choose to deliver them wheat or money.

Therefore, 10-pence a bushel was a very moderate price of wheat in 1350 because that statute obliged servants to accept that price in exchange for their usual livery. It was a reasonable price in 1340.

But in 1340, 10 pence had half an ounce of silver, Tower-weight, and 10 pence then was equal to 30 pence today.

So, four ounces of silver, Tower-weight then was equal to:

  • 80 pence then, and
  • 240 pence today.

This makes it a moderate price for the quarter of eight bushels

98 This statute is a better proof of the moderate price of grain then, than the prices of the dear or cheap years recorded by historians. Those prices made it difficult get the ordinary price.

There are other reasons why, some years before the 14th century, the common price of wheat was not less than 4 ounces of silver the quarter relative to other grain

99 Ralph de Born was a prior [monastic officer below an abbot] of St. Augustine’s, Canterbury.

In 1309, he gave a feast on his installation day and William Thorn preserved the bill. The following were consumed in that feast=

  • 53 quarters of wheat costing £19, or 86 pence a quarter then, or 258 pence today.
  • 58 quarters of malt costing £17, or 126 pence a quarter then, or 216 pence today.
  • 20 quarters of oats costing £4, or 48 pence a quarter, or 144 pence today.

The prices of malt and oats were higher than ordinary relative to wheat.

100 Those prices were not extraordinary.

101 In 1266, the ancient statute called The Assize of Bread and Ale. It was made in the times of the progenitors of Henry the 3rd. It is probably at least as old as the time of his grandfather Henry the 2nd.

It regulates the price of bread according the prices of wheat from 12-240 pence the quarter.

But statutes of this kind are presumed to provide with equal care for all deviations of the middle price.

Therefore, 120 pence with six ounces of silver, Tower-weight then, is equal to 360 pence today.

  • It must have been the middle price of wheat from when this statute was enacted, until 1266.
  • We suppose that the middle price was not less than 1/3 of the highest price, or 80 pence then, with 4 ounces of silver Tower-weight.

102 We can conclude that at the middle of the 14th century and for some time before, the average price of wheat was not less than 4 ounces of silver, Tower-weight.

103 From the mid-14th to the start of the 16th century, its ordinary price sunk gradually to 2 ounces or 120 pence today, until 1570.

104 Henry was the 5th Earl of Northumberland. His 1512 household book has 2 estimations of wheat=

  • 80 pence the quarter
  • 68 pence the quarter

In 1512, 80 pence only had 2 ounces of silver Tower-weight, or 120 pence today.

105 From 1350 to 1558, 80 pence was ordinary price of wheat.

However, the amount of silver in it was continually decreasing due to alterations in the coin. But the increase of the value of silver compensated the reduction of silver in coin. The legislature did not think it worthwhile to attend to it.

106 Thus in 1436, it was enacted that=

  • wheat could be exported without a licence when its price was as low as 80 pence, and
  • no wheat should be imported if the price was not above 80 pence the quarter.

The legislature imagined that=

  • when the price was so low, it could be exported, when
  • when it rose higher, it could be imported.

80 pence then is 160 pence today (2/3 of the same nominal sum in Edward the 3rd’s time).

It was the moderate price of wheat.

107 Wheat exportation was banned whenever the price exceeded 80 pence in 1554 and 1558. They found that this banned wheat exports altogether.

In 1562, wheat exportation was allowed whenever its price does not exceed 120 pence, the moderate price of wheat. It agrees with the estimation of the Northumberland book in 1512.

108 In France, Mr. Duprè de St. Maur and the author of the Essay on the police of grain, observed that the average grain price was much lower in the end of the 15th and the start of the 16th century, than in the 13th and 14th centuries.

Its price, during the same period, probably sunk in the same way throughout Europe.

109 This rise in the value of silver relative to wheat, may have been caused by=

  • the increase of the demand for silver because of the increasing improvement and cultivation, or
  • the reduction of the silver supply because of the exhaustion of many mines, or
  • a mix of both.

In the end of the 15th and the start of the 16th centuries, most European governments were being formed.

The increase of security would naturally increase=

  • industry and improvement, and More annual produce would require more coin to circulate it.
  • the demand for precious metals, luxuries, and ornaments. More rich people would require more silver plates and ornaments.

Most mines which then supplied the European market with silver might have been exhausted and become more costly to operate. Many of them had been wrought from Roman times.

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