mines, Spain would obtain as much gold as would exchange
for the same, or very nearly the same, quantity of commodities as
before. She would be richer by the produce of the two thirds liberated
from the mines. If the value of the 100 pounds of gold should be equal
to that of the 250 pounds extracted before; the king of Spain's portion,
his seventy pounds, would be equal to 175 at the former value: a small
part of the king's tax only would fall on his own subjects, the greater
part being obtained by the better distribution of capital.

The account of Spain would stand thus:

_Formerly produced_:

Gold 250 pounds, of the value of (suppose) 10,000 yards of
cloth.
_Now produced_:

By the two capitalists who quitted the mines,} 5,600 yards of
the value of 140 pounds of gold, or } cloth.
By the capitalist who works the mine, No. 1, }
thirty pounds of gold increased in value, } 3,000 yards of
as 1 to 2-1/2, and therefore now of the } cloth.
value of }
Tax to the king seventy pounds, now of the } 7,000 yards of
value of } cloth.
------
15,600
------

Of the 7000 received by the king, the people of Spain would contribute
only 1400, and 5600 would be pure gain, effected by the liberated
capital.

If the tax, instead of being a fixed sum per mine worked, were a certain
portion of its produce, the quantity would not be reduced in
consequence. If a half, a fourth, or a third of each mine were taken for
the tax, it would nevertheless be the interest of the proprietors to
make their mines yield as abundantly as before; but if the quantity were
not reduced, but only a part of it transferred from the proprietor to
the king, its value would not rise; the tax would fall on the people of
the colonies, and no advantage would be gained. A tax of this kind would
have the effect that Adam Smith supposes taxes on raw produce would have
on the rent of land--it would fall entirely on the rent of the mine. If
pushed a little further, the tax would not only absorb the whole rent,
but would deprive the worker of the mine of the common profits of stock,
and he would co