part iii (vol. i, pp. 4 and 240), and in Book II, chap. 3 (vol. i, pp.

315, 323).

[190] An expression that is met with three times—in chap. 2 of Book II (vol. i, pp. 272, 275, 279).

[191] _Wealth of Nations_, Book II, chap. 2; Cannan, vol. i, p. 275.

[192] All these questions so obscurely treated in Smith’s work are handled with admirable lucidity in Irving Fisher’s _Nature of Capital and Income_ (New York, 1907). Revenue is entirely stripped of that material suggestion which was always associated with it in Smith’s work, and is looked upon as a continual flow of services, whilst capital as a whole is regarded as total wealth existing at one particular moment and from which these services flow out.

[193] _Wealth of Nations_, Book II, chap. 2; Cannan, vol. i, p. 304.

[194] _Ibid._, Book IV, chap. 1; vol. i, pp. 402, 406.

[195] _Ibid._, Book II, chap. 3; vol. i, p. 322.

[196] Hume’s treatment of the quantity theory of money in his essays on _Money_ and _The Balance of Trade_ is much clearer than Smith’s.

[197] _Wealth of Nations_, Book II, chap. 2; Cannan, vol. i, p. 285.

[198] For instance, a high rate of exchange immediately readjusts the commercial indebtedness of nations. (_Ibid._, Book IV, chap. 1; vol. i, p. 400.) Elsewhere he points out that the advantages enjoyed by Europe from the possession of colonies were not exactly sought by her. The search for colonies, their discovery and exploitation, all this was undertaken without any preconceived plan, and in spite of the disastrous regulations imposed by European Governments. (_Ibid._, Book IV, chap. 7,