Book I, Chapter XI, 14

In countries where cultivation is poor and population therefore sparse, the price of wool and hide always makes up a much greater share of the value of the whole animal than in countries where improvement and population have advanced further and demand for butcher’s meat is greater. Mr Hume observes that in Saxon times a fleece was valued at two-fifths of the whole sheep, far above its present proportion. In some provinces of Spain, I have been told, sheep are often killed solely for their fleece and tallow. The carcass is left to rot on the ground or to be eaten by beasts and birds of prey. If this happens sometimes even in Spain, it happens almost constantly in Chili, at Buenos Ayres, and in many other parts of Spanish America, where cattle are killed almost constantly for nothing but hide and tallow. The same was once almost always true in Hispaniola, when buccaneers infested it, before the establishment, improvement, and growth of the French plantations—which now run around the coast of nearly the whole western half of the island—gave some value to the cattle of the Spaniards, who still possess not only the eastern part of the coast but the entire mountainous interior.

Although improvement and population necessarily raise the price of the whole animal, they are likely to raise the price of the carcass much more than that of wool and hide. In a primitive state of society, the market for the carcass is always confined to the country that produces it, and must expand as that country improves and grows in population. But the market for wool and hides, even from a country considered barbarous, often extends throughout the commercial world and can seldom expand in the same proportion. Improvement in any single country can rarely affect the condition of the commercial world as a whole; the market for these goods may therefore remain the same, or nearly so, after such improvement. In the natural course of things, however, improvement should on the whole extend it somewhat. If the industries that use these materials should flourish in the country itself, the market, even if it grew little, would at least be brought much closer to the place where they are produced. Their price might then rise by the amount previously spent on carrying them to distant countries. Though their price might not rise as much as that of butcher’s meat, it should naturally rise somewhat, and certainly should not fall.

In England, however, despite the flourishing woolen industry, the price of English wool has fallen considerably since the reign of Edward III. Many authentic records show that during his reign (around the middle of the fourteenth century, or about 1339), ten shillings in the money of that day was considered no more than a moderate and reasonable price for the tod, or twenty-eight pounds, of English wool [See Smith’s Memoirs of Wool, vol. i c. 5, 6, 7. also vol. ii.]. At twenty-pence an ounce, that sum contained six ounces of silver, Tower weight, equivalent to about thirty shillings in our present money. Today, one-and-twenty shillings a tod may be called a good price for very good English wool. The money price of wool in the time of Edward III. thus stood to its money price today as ten to seven. The difference in real price was greater still. At six shillings and eightpence a quarter, ten shillings would then buy twelve bushels of wheat. At twenty-eight shillings a quarter, one-and-twenty shillings today buys only six bushels. Ancient and modern real prices thus stand as twelve to six, or two to one. A tod of wool in those days would buy twice as much subsistence as it does now, and consequently twice as much labor, if the real reward of labor was the same in both periods.

This decline in both the real and nominal value of wool could never have resulted from the natural course of things. It is instead the result of coercion and contrivance: first, the absolute ban on exporting wool from England; second, permission to import wool from Spain duty-free; and third, the ban on exporting wool from Ireland to any country but England. Because of these regulations, the market for English wool has not expanded somewhat with England’s improvement, but has been confined to the home market, where wool from several other countries may compete with it and Irish wool is forced to compete with it. Moreover, since Irish woolen manufactures are discouraged as far as justice and fair dealing permit, the Irish can process only a smaller part of their wool at home and must send a greater share of it to Great Britain, the only market allowed to them.

I have found no equally authentic records of the ancient price of raw hides. Wool was commonly paid to the king as a subsidy, and the value assigned to it for that purpose indicates its ordinary price to some extent. Raw hides, it seems, were not treated in the same way. Fleetwood, however, cites an account made in 1425 between the prior of Burcester Oxford and one of his canons, which states prices for that particular occasion: five ox hides at twelve shillings; five cow hides at seven shillings and threepence; thirtysix two-year-old sheep skins at nine shillings; and sixteen calf skins at two shillings. In 1425 twelve shillings contained about as much silver as four-and-twenty shillings of our present money. An ox hide in this account was therefore valued at as much silver as 4s. ⅘ths in our present money. Its nominal price was considerably lower than it is now. But at six shillings and eightpence a quarter, twelve shillings would then buy fourteen bushels and four-fifths of a bushel of wheat, which would now cost 51s. 4d. at three and sixpence a bushel. An ox hide would thus have bought as much grain then as ten shillings and threepence would buy now. Its real value equaled ten shillings and threepence of our present money. Since cattle in those days were half-starved for most of the winter, we cannot suppose them very large. An ox hide weighing four stone of sixteen pounds avoirdupois is not considered a bad one today, and would probably have been considered a very good one then. Yet at half-a-crown a stone, which I understand to be the ordinary price at this moment (February 1773), such a hide now costs only ten shillings. Though its nominal price is higher now than in those days, its real price—the actual amount of subsistence it can buy or command—is somewhat lower. The price of cow hides in the account stands in nearly the usual proportion to that of ox hides. The price of sheep skins stands considerably above it; they were probably sold with the wool. The price of calf skins, by contrast, stands far below it. Where cattle are very cheap, calves not intended to replenish the stock are generally killed very young, as they were in Scotland twenty or thirty years ago. This saves milk that the price of the calves would not pay for. Their skins are therefore usually worth little.

Raw hides cost considerably less now than they did a few years ago, probably because the duty on seal skins was removed and raw hides were allowed to be imported duty-free from Ireland and the plantations for a limited period in 1769. Taking the present century as a whole, their real price has probably been somewhat higher than in ancient times. By its nature, a hide is less suited to transport to distant markets than wool: it deteriorates more in storage. A salted hide is considered inferior to a fresh one and sells for less. This must tend to lower the price of raw hides in a country that does not process them and must export them, and, by comparison, to raise it in a country that does process them. It tends to lower their price in a country considered barbarous and to raise it in an improved manufacturing country. It must therefore have tended to lower the price in ancient times and raise it in modern ones. Besides, our tanners have not had quite the success of our clothiers in convincing the nation’s wisdom that the safety of the commonwealth depends on the prosperity of their particular industry. They have accordingly received much less favor. The export of raw hides has indeed been banned and declared a nuisance, but their import from foreign countries has been subjected to a duty. Although this duty was removed for hides from Ireland and the plantations (for only five years), Ireland was not confined to the British market for the sale of its surplus hides, those not processed at home. Only in the past few years have the hides of ordinary cattle been placed among the enumerated goods that the plantations may send nowhere but the mother country. Nor has Ireland’s trade in hides yet been oppressed in order to support the industries of Great Britain.

Any regulation that lowers the price of wool or raw hides below its natural level must, in an improved and cultivated country, tend somewhat to raise the price of butcher’s meat. The price of both large and small livestock raised on improved cultivated land must cover the rent the landlord and the profit the farmer can reasonably expect from that land. Otherwise they will soon stop raising them. Whatever part of this price wool and hide do not pay must therefore be paid by the carcass. The less one pays, the more the other must pay. Landlords and farmers do not care how the price is divided among the animal’s parts, provided the full amount comes to them. Thus, in an improved cultivated country, regulations of this kind cannot greatly affect their interests as landlords and farmers, though rising food prices may affect their interests as consumers. In an unimproved and uncultivated country, matters are quite different. There most land can be used only to feed livestock, and wool and hide account for the chief part of their value. Such regulations would profoundly affect the interests of landlords and farmers, while barely affecting their interests as consumers. A fall in the price of wool and hide would not raise the price of the carcass there: since most of the country’s land can be used only to feed livestock, the same number of animals would still be raised. The same quantity of butcher’s meat would reach the market, with no increase in demand. Its price would therefore remain unchanged. The whole price of livestock would fall, together with both rent and profit from every tract of land whose principal product was livestock—that is, most of the country’s land. A perpetual ban on exporting wool, commonly but quite falsely attributed to Edward III., would in the circumstances of his time have been about the most destructive regulation imaginable. Besides reducing the actual value of most of the kingdom’s land, it would have greatly delayed further improvement by lowering the price of the most important kind of small livestock.

The price of Scottish wool fell considerably after union with England excluded it from the great European market and confined it to the narrow market of Great Britain. The value of most land in the southern counties of Scotland, predominantly sheep country, would have suffered deeply from this event had the rise in the price of butcher’s meat not fully made up for the fall in wool.

The effectiveness of human industry in increasing the quantity of wool or raw hides is limited insofar as it depends on the produce of the country where that industry is employed; insofar as it depends on other countries’ produce, it is uncertain. Here it depends less on how much those countries produce than on how much they leave unprocessed, and on whatever restrictions they choose to impose on exports of this sort of raw produce. Such circumstances are wholly independent of domestic industry and necessarily make the effect of its efforts more or less uncertain. In multiplying this kind of raw produce, then, human industry is not only limited in its effect but uncertain.

The effect of human industry in multiplying another important kind of raw produce—the fish brought to market—is likewise both limited and uncertain. It is limited by the country’s location; by how close or distant its provinces are from the sea; by the number of its lakes and rivers; and by the fertility or barrenness, as it were, of those seas, lakes, and rivers in fish. As population increases and the annual produce of the country’s land and labor grows, more buyers of fish appear. Those buyers also have more goods of greater variety—or their equivalent value—with which to buy. But supplying this larger market will generally require a greater increase in labor than was needed to supply the smaller one. A market whose annual demand grows from one thousand to ten thousand ton of fish can seldom be supplied without employing more than ten times as much labor. Fish generally have to be sought farther away; larger vessels and more costly equipment of every kind must be used. The real price of fish thus naturally rises as improvement advances. I believe it has done so, to some degree, in every country.

In countries where little land is cultivated and few people live, the wool and hide account for a much larger share of an animal's price than they do in countries with more development and people, where there is more demand for meat. Mr Hume notes that in Saxon times a sheep's fleece was valued at two-fifths of the whole sheep. That is far more than its share today. I have been told that in some Spanish provinces people often kill sheep just for their fleeces and fat. They leave the carcass to rot on the ground or to be eaten by predators and scavenging birds. If that sometimes happens even in Spain, it happens almost all the time in Chili, at Buenos Ayres, and in many other parts of Spanish America. There cattle are killed almost entirely for their hides and fat. The same thing used to happen almost all the time in Hispaniola when buccaneers plagued it. That was before the French plantations were settled, developed, and populated. Those plantations now stretch along almost the entire western half of the island's coast. Their development has given some value to the Spanish colonists' cattle. The Spaniards still hold the eastern part of the coast and all the mountainous interior.

As a country develops and its population grows, the price of the whole animal necessarily rises. But the price of its carcass is likely to rise much more than that of its wool and hide. In a society at an early stage, the carcass can only be sold in the country where it is produced. Its market must therefore expand as that country develops and gains population. Wool and hides, however, can often be sold throughout the trading world even when they come from a country at an early stage of development. Their market can rarely expand in the same proportion. The development of any single country seldom has much effect on the trading world as a whole. The market for these goods may remain nearly or exactly the same as before. In the ordinary course of things, however, development should expand it somewhat overall. In particular, if industries using these materials begin to thrive in that country, their market will at least move much closer to where they are produced, even if it does not grow much. The price of the materials could then rise by at least the amount previously spent shipping them abroad. So their price should naturally rise somewhat, even if it does not rise as fast as the price of meat. It certainly should not fall.

Yet the price of English wool has fallen considerably since Edward III's time, despite the success of England's woolen industry. Many reliable records show that during his reign, around the middle of the fourteenth century, or about 1339, a moderate, reasonable price for a tod of English wool, weighing twenty-eight pounds, was at least ten shillings in the money of the time [See Smith’s Memoirs of Wool, vol. i c. 5, 6, 7. also vol. ii.]. At twenty-pence per ounce, that money contained six ounces of silver, Tower weight, equivalent to about thirty shillings today. Today one-and-twenty shillings per tod can be called a good price for very good English wool. Thus the money price of wool in Edward III's time stood to its money price today as ten to seven. The difference in its real price was greater still. At six shillings and eightpence per quarter of wheat, ten shillings then bought twelve bushels. At twenty-eight shillings per quarter today, one-and-twenty shillings buys only six bushels. So the ratio of the old real price to today's is twelve to six, or two to one. A tod of wool then bought twice as much food as it does now. It also bought twice as much labor, if workers' real pay was the same in both periods.

This fall in wool's real and money value could not have come about naturally. It resulted instead from force and deliberate policy. First, England banned wool exports outright. Second, it allowed wool from Spain to enter duty-free. Third, it barred Ireland from exporting wool anywhere except England. These rules confined English wool to the domestic market, rather than letting its market expand as England developed. Wool from several other countries could compete with it there, and Irish wool was forced to compete with it. Irish woolen manufacturing has also been discouraged as much as justice and fair dealing allow. The Irish can therefore process only a small share of their own wool at home. They must send a greater share to Great Britain, the only market open to them.

I have not found equally reliable records for the price of raw hides in earlier times. Wool was commonly paid to the king as a subsidy, and the value assigned to it for this purpose tells us something about its ordinary price. That seems not to have been true of raw hides. Fleetwood does, however, give their prices from an account made in 1425 between the prior of Burcester Oxford and one of his canons. At least on that occasion, five ox hides were priced at twelve shillings; five cow hides at seven shillings and threepence; thirtysix skins of two-year-old sheep at nine shillings; and sixteen calf skins at two shillings. In 1425, twelve shillings held about as much silver as four-and-twenty shillings of today's money. So this account valued one ox hide at the amount of silver in 4s. ⅘ths today. Its money price was considerably lower than today's. But when wheat cost six shillings and eightpence a quarter, twelve shillings bought fourteen bushels and four-fifths of a bushel. At today's price of three and sixpence per bushel, that wheat would cost 51s. 4d. An ox hide then bought as much grain as ten shillings and threepence buys today. Its real value equaled ten shillings and threepence of today's money. In those days cattle nearly starved through much of the winter, so we cannot suppose they were very large. A hide weighing four stone of sixteen pounds avoirdupois each is not considered a bad one today, and would probably have been considered very good then. But at half-a-crown per stone, which I understand to be the usual price now (February 1773), it would cost only ten shillings today. Although its money price is higher now than it was then, its real price—the actual amount of food it buys—is somewhat lower. The account's price for cow hides is close to the usual proportion of the price for ox hides. Sheep skins are priced considerably higher in proportion; they were probably sold with their wool. Calf skins, on the other hand, are priced much lower. When cattle are cheap, calves not intended to maintain the stock are usually slaughtered very young, as they were in Scotland twenty or thirty years ago. This saves the milk, which the calves' price would not cover. Their skins are therefore usually worth little.

Raw hides cost considerably less now than they did a few years ago. The reason is probably the removal of the duty on seal skins and the temporary permission to import raw hides duty-free from Ireland and the plantations, granted in 1769. Averaged over the present century, their real price has probably been somewhat higher than it was in those earlier times. Hides are less suited than wool to being shipped to distant markets. They deteriorate more in storage. A salted hide is considered inferior to a fresh one and sells for less. This must tend to lower the price of raw hides in countries that cannot process them and must export them. By comparison, it tends to raise their price in countries that process them. It tends to lower their price in a country at an early stage of development and raise it in a developed manufacturing country. It should therefore have tended to lower their price in earlier times and raise it in modern times. Also, our tanners have been less successful than our cloth makers at convincing the nation's leaders that public safety depends on their industry's success. They have therefore received less favorable treatment. Exporting raw hides has indeed been prohibited and declared a nuisance, but imported hides from foreign countries have been taxed. The duty on hides from Ireland and the plantations was removed for five years only. Even so, Ireland has not been forced to sell its surplus hides, or those it does not process at home, only in Great Britain. Only in the past few years have ordinary cattle hides been added to the list of goods the plantations may send nowhere but to the mother country. And in this case, Irish trade has not yet been restricted to support British manufacturing.

Any rules that push the price of wool or raw hides below its natural level must tend to raise the price of meat in a developed farming country. The price of cattle and sheep raised on cultivated land must cover the rent landlords expect and the profit farmers expect from such land. Otherwise, farmers will soon stop raising them. If wool and hides pay less of that price, the carcass must pay more of it. The less one part brings in, the more the other must bring in. Landlords and farmers do not care how the total price is split between an animal's parts, provided they receive the whole amount. In a developed farming country, these rules will therefore have little effect on their interests as landlords and farmers. They may hurt them as consumers, however, by raising food prices. It is very different in an undeveloped country, where most land has no use other than grazing and wool and hides account for most of an animal's value. There, such rules greatly affect landlords' and farmers' interests as producers, but hardly affect them as consumers. A fall in wool and hide prices would not raise the carcass price. Most land could only be used for grazing, so the same number of animals would still be raised. The same amount of meat would reach the market, demand for it would not grow, and its price would stay the same. The total price of cattle would fall, along with the rent and profit on land whose chief product was cattle—that is, most of the country's land. The permanent ban on wool exports, commonly but wrongly credited to Edward III, would have been about the most destructive policy imaginable in the country's circumstances then. It would not only have reduced the actual value of most of the kingdom's land. By lowering the price of its most important kind of small livestock, it would also have greatly slowed later development.

Scottish wool fell considerably in price after the union with England. Scotland was shut out of the large European market and confined to the small British one. This would have badly hurt the value of most land in Scotland's southern counties, where sheep were the main livestock, if the rising price of meat had not fully made up for the falling price of wool.

People's ability to produce more wool or raw hides is limited when it depends on what their own country produces. It is uncertain when it depends on what other countries produce. In the latter case, the decisive issue is not so much how much those countries produce as how much they leave unprocessed and whether they restrict exports of these raw materials. These conditions are entirely outside the control of domestic industry. They make the results of its efforts uncertain. Human industry's ability to increase these raw materials is therefore both limited and uncertain.

The same is true of its ability to bring more fish to market, another important raw product. That ability is limited by a country's location, by how near its regions are to the sea, by its number of lakes and rivers, and by how rich in fish those waters are. As population rises and the yearly product of a country's land and labor grows, there are more buyers for fish. Those buyers also have a greater amount and variety of other goods—or the money those goods are worth—to spend. But usually it is impossible to serve this larger market without increasing labor by a greater proportion than the market grows. A market that once needed one thousand ton of fish a year and now needs ten thousand ton can rarely be served with only ten times as much labor. Fish generally have to be caught farther away, in larger boats, with more expensive equipment of every kind. So the real price of fish naturally rises as a country develops. I believe this has happened to some extent in every country.