that part of the circulating capital which consists in money is an
improvement of exactly the same kind.

It is sufficiently obvious, and it has partly, too, been explained already,
in what manner every saving in the expense of supporting the fixed capital
is an improvement of the neat revenue of the society. The whole capital of
the undertaker of every work is necessarily divided between his fixed and his
circulating capital. While his whole capital remains the same, the smaller
the one part, the greater must necessarily be the other. It is the
circulating capital which furnishes the materials and wages of labour, and
puts industry into motion. Every saving, therefore, in the expense of
maintaining the fixed capital, which does not diminish the productive powers
of labour, must increase the fund which puts industry into motion, and
consequently the annual produce of land and labour, the real revenue of
every society.

The substitution of paper in the room of gold and silver money, replaces a
very expensive instrument of commerce with one much less costly, and
sometimes equally convenient. Circulation comes to be carried on by a new
wheel, which it costs less both to erect and to maintain than the old one.
But in what manner this operation is performed, and in what manner it tends
to increase either the gross or the neat revenue of the society, is not
altogether so obvious, and may therefore require some further explication.

There are several different sorts of paper money; but the circulating notes
of banks and bankers are the species which is best known, and which seems
best adapted for this purpose.

When the people of any particular country have such confidence in the
fortune, probity and prudence of a particular banker, as to believe that