aregulationequallytyrannical，butmuchlesseffectualthanthatwhichitwasmeanttosupport。Apositivelawmayrenderashillingalegaltenderforguinea，becauseitmaydirectthecourtsofjusticetodischargethedebtorwhohasmadethattender。Butnopositivelawcanobligeapersonwhosellsgoods，andwhoisatlibertytosellornottosellashepleases，toacceptofashillingasequivalenttoaguineainthepriceofthem。Notwithstandinganyregulationofthiskind，itappearedbythecourseofexchangewithGreatBritain，thatahundredpoundssterlingwasoccasionallyconsideredasequivalent，insomeofthecolonies，toahundredandthirtypounds，andinotherstosogreatasumaselevenhundredpoundscurrency;thisdifferenceinthevaluearisingfromthedifferenceinthequantityofpaperemittedinthedifferentcolonies，andinthedistanceandprobabilityofthetermofitsfinaldischargeandredemption。
Nolaw，therefore，couldbemoreequitablethantheActofParliament，sounjustlycomplainedofinthecolonies，whichdeclaredthatnopapercurrencytobeemittedthereintimecomingshouldbealegaltenderofpayment。
Pennsylvaniawasalwaysmoremoderateinitsemissionsofpapermoneythananyotherofourcolonies。Itspapercurrency，accordingly，issaidnevertohavesunkbelowthevalueofthegoldandsilverwhichwascurrentinthecolonybeforethefirstemissionofitspapermoney。Beforethatemission，thecolonyhadraisedthedenominationofitscoin，andhad，byactofassembly，orderedfiveshillingssterlingtopassinthecolonyforsixandthreepence，andafterwardsforsixandeightpence。Apoundcolonycurrency，therefore，evenwhenthatcurrencywasgoldandsilver，wasmorethanthirtypercentbelowthevalueofapoundsterling，andwhenthatcurrencywasturnedintopaperitwasseldommuchmorethanthirtypercentbelowthatvalue。Thepretenceforraisingthedenominationofthecoin，wastopreventtheexportationofgoldandsilver，bymakingequalquantitiesofthosemetalspassforgreatersumsinthecolonythantheydidinthemothercountry。Itwasfound，however，thatthepriceofallgoodsfromthemothercountryroseexactlyinproportionastheyraisedthedenominationoftheircoin，sothattheirgoldandsilverwereexportedasfastasever。
Thepaperofeachcolonybeingreceivedinthepaymentoftheprovincialtaxes，forthefullvalueforwhichithadbeenissued，itnecessarilyderivedfromthisusesomeadditionalvalueoverandabovewhatitwouldhavehadfromtherealorsupposeddistanceofthetermofitsfinaldischargeandredemption。Thisadditionalvaluewasgreaterorless，accordingasthequantityofpaperissuedwasmoreorlessabovewhatcouldbeemployedinthepaymentofthetaxesoftheparticularcolonywhichissuedit。Itwasinallthecoloniesverymuchabovewhatcouldbeemployedinthismanner。
Aprincewhoshouldenactthatacertainproportionofhistaxesshouldbepaidinapapermoneyofacertainkindmighttherebygiveacertainvaluetothispapermoney，eventhoughthetermofitsfinaldischargeandredemptionshoulddependaltogetheruponthewilloftheprince。Ifthebankwhichissuedthispaperwascarefultokeepthequantityofitalwayssomewhatbelowwhatcouldeasilybeemployedinthismanner，thedemandforitmightbesuchastomakeitevenbearapremium，orsellforsomewhatmoreinthemarketthanthequantityofgoldorsilvercurrencyforwhichitwasissued。SomepeopleaccountinthismannerforwhatiscalledtheAgioofthebankofAmsterdam，orforthesuperiorityofbankmoneyovercurrentmoney;thoughthisbankmoney，astheypretend，cannotbetakenoutofthebankatthewilloftheowner。Thegreaterpartofforeignbillsofexchangemustbepaidinbankmoney，thatis，byatransferinthebooksofthebank;andthedirectorsofthebank，theyallege，arecarefultokeepthewholequantityofbankmoneyalwaysbelowwhatthisuseoccasionsademandfor。Itisuponthisaccount，theysay，thatbankmoneysellsforapremium，orbearsanagiooffourorfivepercentabovethesamenominalsumofthegoldandsilvercurrencyofthecountry。ThisaccountofthebankofAmsterdam，however，itwillappearhereafter，isinagreatmeasurechimerical。
Apapercurrencywhichfallsbelowthevalueofgoldandsilvercoindoesnottherebysinkthevalueofthosemetals，oroccasionequalquantitiesofthemtoexchangeforasmallerquantityofgoodsofanyotherkind。Theproportionbetweenthevalueofgoldandsilverandthatofgoodsofanyotherkinddependsinallcasesnotuponthenatureorquantityofanyparticularpapermoney，whichmaybecurrentinanyparticularcountry，butupontherichnessorpovertyofthemines，whichhappenatanyparticulartimetosupplythegreatmarketofthecommercialworldwiththosemetals。Itdependsupontheproportionbetweenthequantityoflabourwhichisnecessaryinordertobringacertainquantityofgoldandsilvertomarket，andthatwhichisnecessaryinordertobringthitheracertainquantityofanyothersortofgoods。
Ifbankersarerestrainedfromissuinganycirculatingbanknotes，ornotespayabletothebearer，forlessthanacertainsum，andiftheyaresubjectedtotheobligationofanimmediateandunconditionalpaymentofsuchbanknotesassoonaspresented，theirtrademay，withsafetytothepublic，berenderedinallotherrespectsperfectlyfree。ThelatemultiplicationofbankingcompaniesinbothpartsoftheUnitedKingdom，aneventbywhichmanypeoplehavebeenmuchalarmed，insteadofdiminishing，increasesthesecurityofthepublic。Itobligesallofthemtobemorecircumspectintheirconduct，and，bynotextendingtheircurrencybeyonditsdueproportiontotheircash，toguardthemselvesagainstthosemaliciousrunswhichtherivalshipofsomanycompetitorsisalwaysreadytobringuponthem。Itrestrainsthecirculationofeachparticularcompanywithinanarrowercircle，andreducestheircirculatingnotestoasmallernumber。Bydividingthewholecirculationintoagreaternumberofparts，thefailureofanyonecompany，anaccidentwhich，inthecourseofthings，mustsometimeshappen，becomesoflessconsequencetothepublic。Thisfreecompetition，too，obligesallbankerstobemoreliberalintheirdealingswiththeircustomers，lesttheirrivalsshouldcarrythemaway。
Ingeneral，ifanybranchoftrade，oranydivisionoflabour，beadvantageoustothepublic，thefreerandmoregeneralthecompetition，itwillalwaysbethemoreso。
CHAPTERIII
OftheAccumulationofCapital，orofProductiveandUnproductiveLabourTHEREisonesortoflabourwhichaddstothevalueofthesubjectuponwhichitisbestowed:thereisanotherwhichhasnosucheffect。Theformer，asitproducesavalue，maybecalledproductive;thelatter，unproductivelabour。Thusthelabourofamanufactureradds，generally，tothevalueofthematerialswhichheworksupon，thatofhisownmaintenance，andofhismaster’sprofit。Thelabourofamenialservant，onthecontrary，addstothevalueofnothing。Thoughthemanufacturerhashiswagesadvancedtohimbyhismaster，he，inreality，costshimnoexpense，thevalueofthosewagesbeinggenerallyrestored，togetherwithaprofit，intheimprovedvalueofthesubjectuponwhichhislabourisbestowed。Butthemaintenanceofamenialservantneverisrestored。Amangrowsrichbyemployingamultitudeofmanufacturers:hegrowspoorbymaintainingamultitudeofmenialservants。Thelabourofthelatter，however，hasitsvalue，anddeservesitsrewardaswellasthatoftheformer。Butthelabourofthemanufacturerfixesandrealizesitselfinsomeparticularsubjectorvendiblecommodity，whichlastsforsometimeatleastafterthatlabourispast。Itis，asitwere，acertainquantityoflabourstockedandstoreduptobeemployed，ifnecessary，uponsomeotheroccasion。Thatsubject，orwhatisthesamething，thepriceofthatsubject，canafterwards，ifnecessary，putintomotionaquantityoflabourequaltothatwhichhadoriginallyproducedit。Thelabourofthemenialservant，onthecontrary，doesnotfixorrealizeitselfinanyparticularsubjectorvendiblecommodity。Hisservicesgenerallyperishintheveryinstantoftheirperformance，andseldomleaveanytraceorvaluebehindthemforwhichanequalquantityofservicecouldafterwardsbeprocured。
Thelabourofsomeofthemostrespectableordersinthesocietyis，likethatofmenialservants，unproductiveofanyvalue，anddoesnotfixorrealizeitselfinanypermanentsubject;orvendiblecommodity，whichenduresafterthatlabourispast，andforwhichanequalquantityoflabourcouldafterwardsbeprocured。Thesovereign，forexample，withalltheofficersbothofjusticeandwarwhoserveunderhim，thewholearmyandnavy，areunproductivelabourers。Theyaretheservantsofthepublic，andaremaintainedbyapartoftheannualproduceoftheindustryofotherpeople。Theirservice，howhonourable，howuseful，orhownecessarysoever，producesnothingforwhichanequalquantityofservicecanafterwardsbeprocured。Theprotection，security，anddefenceofthecommonwealth，theeffectoftheirlabourthisyearwillnotpurchaseitsprotection，security，anddefencefortheyeartocome。Inthesameclassmustberanked，somebothofthegravestandmostimportant，andsomeofthemostfrivolousprofessions:churchmen，lawyers，physicians，menoflettersofallkinds;players，buffoons，musicians，opera—singers，opera—dancers，etc。Thelabourofthemeanestofthesehasacertainvalue，regulatedbytheverysameprincipleswhichregulatethatofeveryothersortoflabour;andthatofthenoblestandmostuseful，50producesnothingwhichcouldafterwardspurchaseorprocureanequalquantityoflabour。
Likethedeclamationoftheactor，theharangueoftheorator，orthetuneofthemusician，theworkofallofthemperishesintheveryinstantofitsproduction。
Bothproductiveandunproductivelabourers，andthosewhodonotlabouratall，areallequallymaintainedbytheannualproduceofthelandandlabourofthecountry。Thisproduce，howgreatsoever，canneverbeinfinite，butmusthavecertainlimits。According，therefore，asasmallerorgreaterproportionofitisinanyoneyearemployedinmaintainingunproductivehands，themoreintheonecaseandthelessintheotherwillremainfortheproductive，andthenextyear’sproducewillbegreaterorsmalleraccordingly;thewholeannualproduce，ifweexceptthespontaneousproductionsoftheearth，beingtheeffectofproductivelabour。
Thoughthewholeannualproduceofthelandandlabourofeverycountryis，nodoubt，ultimatelydestinedforsupplyingtheconsumptionofitsinhabitants，andforprocuringarevenuetothem，yetwhenitfirstcomeseitherfromtheground，orfromthehandsoftheproductivelabourers，itnaturallydividesitselfintotwoparts。Oneofthem，andfrequentlythelargest，is，inthefirstplace，destinedforreplacingacapital，orforrenewingtheprovisions，materials，andfinishedwork，whichhadbeenwithdrawnfromacapital;theotherforconstitutingarevenueeithertotheownerofthiscapital，astheprofitofhisstock，ortosomeotherperson，astherentofhisland。Thus，oftheproduceofland，onepartreplacesthecapitalofthefarmer;
theotherpayshisprofitandtherentofthelandlord;andthusconstitutesarevenuebothtotheownerofthiscapital，astheprofitsofhisstock;andtosomeotherperson，astherentofhisland。Oftheproduceofagreatmanufactory，inthesamemanner，onepart，andthatalwaysthelargest，replacesthecapitaloftheundertakerofthework;theotherpayshisprofit，andthusconstitutesarevenuetotheownerofthiscapital。
Thatpartoftheannualproduceofthelandandlabourofanycountrywhichreplacesacapitalneverisimmediatelyemployedtomaintainanybutproductivehands。Itpaysthewagesofproductivelabouronly。Thatwhichisimmediatelydestinedforconstitutingarevenue，eitherasprofitorasrent，maymaintainindifferentlyeitherproductiveorunproductivehands。
Whateverpartofhisstockamanemploysasacapital，healwaysexpectsistobereplacedtohimwithaprofit。Heemploysit，therefore，inmaintainingproductivebandsonly;andafterhavingservedinthefunctionofacapitaltohim，itconstitutesarevenuetothem。Wheneverheemploysanypartofitinmaintainingunproductivehandsofanykind，thatpartis，fromthatmoment，withdrawnfromhiscapital，andplacedinhisstockreservedforimmediateconsumption。
Unproductivelabourers，andthosewhodonotlabouratall，areallmaintainedbyrevenue;either，first，bythatpartoftheannualproducewhichisoriginallydestinedforconstitutingarevenuetosomeparticularpersons，eitherastherentoflandorastheprofitsofstock;or，secondly，bythatpartwhich，thoughoriginallydestinedforreplacingacapitalandformaintainingproductivelabourersonly，yetwhenitcomesintotheirhandswhateverpartofitisoverandabovetheirnecessarysubsistencemaybeemployedinmaintainingindifferentlyeitherproductiveorunproductivehands。Thus，notonlythegreatlandlordortherichmerchant，buteventhecommonworkman，ifhiswagesareconsiderable，maymaintainamenialservant;orhemaysometimesgotoaplayorapuppetshow，andsocontributehissharetowardsmaintainingonesetofunproductivelabourers;orhemaypaysometaxes，andthushelptomaintainanotherset，morehonourableandusefulindeed，butequallyunproductive。Nopartoftheannualproduce，however，whichhadbeenoriginallydestinedtoreplaceacapital，iseverdirectedtowardsmaintainingunproductivehandstillafterithasputintomotionitsfullcomplementofproductivelabour，orallthatitcouldputintomotioninthewayinwhichitwasemployed。Theworkmanmusthaveearnedhiswagesbyworkdonebeforehecanemployanypartoftheminthismanner。Thatpart，too，isgenerallybutasmallone。Itishissparerevenueonly，ofwhichproductivelabourershaveseldomagreatdeal。Theygenerallyhavesome，however;andinthepaymentoftaxesthegreatnessoftheirnumbermaycompensate，insomemeasure，thesmallnessoftheircontribution。Therentoflandandtheprofitsofstockareeverywhere，therefore，theprincipalsourcesfromwhichunproductivehandsderivetheirsubsistence。
Thesearethetwosortsofrevenueofwhichtheownershavegenerallymosttospare。Theymightbothmaintainindifferentlyeitherproductiveorunproductivehands。Theyseem，however，tohavesomepredilectionforthelatter。Theexpenseofagreatlordfeedsgenerallymoreidlethanindustriouspeople。Therichmerchant，thoughwithhiscapitalhemaintainsindustriouspeopleonly，yetbyhisexpense，thatis，bytheemploymentofhisrevenue，hefeedscommonlytheverysamesortasthegreatlord。
Theproportion，therefore，betweentheproductiveandunproductivehands，dependsverymuchineverycountryupontheproportionbetweenthatpartoftheannualproduce，which，assoonasitcomeseitherfromthegroundorfromthehandsoftheproductivelabourers，isdestinedforreplacingacapital，andthatwhichisdestinedforconstitutingarevenue，eitherasrentorasprofit。Thisproportionisverydifferentinrichfromwhatitisinpoorcountries。
Thus，atpresent，intheopulentcountriesofEurope，averylarge，frequentlythelargestportionoftheproduceofthelandisdestinedforreplacingthecapitaloftherichandindependentfarmer;theotherforpayinghisprofitsandtherentofthelandlord。Butanciently，duringtheprevalencyofthefeudalgovernment，averysmallportionoftheproducewassufficienttoreplacethecapitalemployedincultivation。Itconsistedcommonlyinafewwretchedcattle，maintainedaltogetherbythespontaneousproduceofuncultivatedland，andwhichmight，therefore，beconsideredasapartofthatspontaneousproduce。
Itgenerally，too，belongedtothelandlord，andwasbyhimadvancedtotheoccupiersoftheland。Alltherestoftheproduceproperlybelongedtohimtoo，eitherasrentforhisland，orasprofituponthispaltrycapital。Theoccupiersoflandweregenerallybondmen，whosepersonsandeffectswereequallyhisproperty。Thosewhowerenotbondmenweretenantsatwill，andthoughtherentwhichtheypaidwasoftennominallylittlemorethanaquit—rent，itreallyamountedtothewholeproduceoftheland。Theirlordcouldatalltimescommandtheirlabourinpeaceandtheirserviceinwar。Thoughtheylivedatadistancefromhishouse，theywereequallydependentuponhimashisretainerswholivedinit。Butthewholeproduceofthelandundoubtedlybelongstohimwhocandisposeofthelabourandserviceofallthosewhomitmaintains。InthepresentstateofEurope，theshareofthelandlordseldomexceedsathird，sometimesnotafourthpartofthewholeproduceoftheland。Therentofland，however，inalltheimprovedpartsofthecountry，hasbeentripledandquadrupledsincethoseancienttimes;andthisthirdorfourthpartoftheannualproduceis，itseems，threeorfourtimesgreaterthanthewholehadbeenbefore。Intheprogressofimprovement，rent，thoughitincreasesinproportiontotheextent，diminishesinproportiontotheproduceoftheland。
IntheopulentcountriesofEurope，greatcapitalsareatpresentemployedintradeandmanufactures。Intheancientstate，thelittletradethatwasstirring，andthefewhomelyandcoarsemanufacturesthatwerecarriedon，requiredbutverysmallcapitals。These，however，musthaveyieldedverylargeprofits。
Therateofinterestwasnowherelessthantenpercent，andtheirprofitsmusthavebeensufficienttoaffordthisgreatinterest。Atpresenttherateofinterest，intheimprovedpartsofEurope，isnowherehigherthansixpercent，andinsomeofthemostimproveditissolowasfour，three，andtwopercent。
Thoughthatpartoftherevenueoftheinhabitantswhichisderivedfromtheprofitsofstockisalwaysmuchgreaterinrichthaninpoorcountries，itisbecausethestockismuchgreater:
inproportiontothestocktheprofitsaregenerallymuchless。
Thatpartoftheannualproduce，therefore，which，assoonasitcomeseitherfromthegroundorfromthehandsoftheproductivelabourers，isdestinedforreplacingacapital，isnotonlymuchgreaterinrichthaninpoorcountries，butbearsamuchgreaterproportiontothatwhichisimmediatelydestinedforconstitutingarevenueeitherasrentorasprofit。Thefundsdestinedforthemaintenanceofproductivelabourarenotonlymuchgreaterintheformerthaninthelatter，butbearamuchgreaterproportiontothosewhich，thoughtheymaybeemployedtomaintaineitherproductiveorunproductivehands，havegenerallyapredilectionforthelatter。
Theproportionbetweenthosedifferentfundsnecessarilydeterminesineverycountrythegeneralcharacteroftheinhabitantsastoindustryoridleness。Wearemoreindustriousthanourforefathers;becauseinthepresenttimesthefundsdestinedforthemaintenanceofindustryaremuchgreaterinproportiontothosewhicharelikelytobeemployedinthemaintenanceofidlenessthantheyweretwoorthreecenturiesago。Ourancestorswereidleforwantofasufficientencouragementtoindustry。Itisbetter，saystheproverb，toplayfornothingthantoworkfornothing。Inmercantileandmanufacturingtowns，wheretheinferiorranksofpeoplearechieflymaintainedbytheemploymentofcapital，theyareingeneralindustrious，sober，andthriving;asinmanyEnglish，andinmostDutchtowns。Inthosetownswhichareprincipallysupportedbytheconstantoroccasionalresidenceofacourt，andinwhichtheinferiorranksofpeoplearechieflymaintainedbythespendingofrevenue，theyareingeneralidle，dissolute，andpoor;asatRome，Versailles，Compiegne，andFontainebleu。IfyouexceptRouenandBordeaux，thereislittletradeorindustryinanyoftheparliamenttownsofFrance;andtheinferiorranksofpeople，beingelderlymaintainedbytheexpenseofthemembersofthecourtsofjustice，andofthosewhocometopleadbeforethem，areingeneralidleandpoor。ThegreattradeofRouenandBordeauxseemstobealtogethertheeffectoftheirsituation。
Rouenisnecessarilytheentrepotofalmostallthegoodswhicharebroughteitherfromforeigncountries，orfromthemaritimeprovincesofFrance，fortheconsumptionofthegreatcityofParis。BordeauxisinthesamemannertheentrepotofthewineswhichgrowuponthebanksoftheGaronne，andoftheriverswhichrunintoit，oneoftherichestwinecountriesintheworld，andwhichseemstoproducethewinefittestforexportation，orbestsuitedtothetasteofforeignnations。Suchadvantageoussituationsnecessarilyattractagreatcapitalbythegreatemploymentwhichtheyaffordit;andtheemploymentofthiscapitalisthecauseoftheindustryofthosetwocities。IntheotherparliamenttownsofFrance，verylittlemorecapitalseemstobeemployedthanwhatisnecessaryforsupplyingtheirownconsumption;thatis，littlemorethanthesmallestcapitalwhichcanbeemployedinthem。ThesamethingmaybesaidofParis，Madrid，andVienna。Ofthosethreecities，Parisisbyfarthemostindustrious;butParisitselfistheprincipalmarketofallthemanufacturesestablishedatParis，anditsownconsumptionistheprincipalobjectofallthetradewhichitcarrieson。
London，Lisbon，andCopenhagen，are，perhaps，theonlythreecitiesinEuropewhichareboththeconstantresidenceofacourt，andcanatthesametimebeconsideredastradingcities，orascitieswhichtradenotonlyfortheirownconsumption，butforthatofothercitiesandcountries。Thesituationofallthethreeisextremelyadvantageous，andnaturallyfitsthemtobetheentrepotsofagreatpartofthegoodsdestinedfortheconsumptionofdistantplaces。Inacitywhereagreatrevenueisspent，toemploywithadvantageacapitalforanyotherpurposethanforsupplyingtheconsumptionofthatcityisprobablymoredifficultthaninoneinwhichtheinferiorranksofpeoplehavenoothermaintenancebutwhattheyderivefromtheemploymentofsuchacapital。Theidlenessofthegreaterpartofthepeoplewhoaremaintainedbytheexpenseofrevenuecorrupts，itisprobable，theindustryofthosewhooughttobemaintainedbytheemploymentofcapital，andrendersitlessadvantageoustoemployacapitaltherethaninotherplaces。TherewaslittletradeorindustryinEdinburghbeforetheunion。WhentheScotchParliamentwasnolongertobeassembledinit，whenitceasedtobethenecessaryresidenceoftheprincipalnobilityandgentryofScotland，itbecameacityofsometradeandindustry。Itstillcontinues，however，tobetheresidenceoftheprincipalcourtsofjusticeinScotland，oftheBoardsofCustomsandExcise，etc。Aconsiderablerevenue，therefore，stillcontinuestobespentinit。IntradeandindustryitismuchinferiortoGlasgow，ofwhichtheinhabitantsarechieflymaintainedbytheemploymentofcapital。Theinhabitantsofalargevillage，ithassometimesbeenobserved，afterhavingmadeconsiderableprogressinmanufactures，havebecomeidleandpoorinconsequenceofagreatlordhavingtakenuphisresidenceintheirneighbourhood。
Theproportionbetweencapitalandrevenue，therefore，seemseverywheretoregulatetheproportionbetweenindustryandidleness。Wherevercapitalpredominates，industryprevails:
whereverrevenue，idleness。Everyincreaseordiminutionofcapital，therefore，naturallytendstoincreaseordiminishtherealquantityofindustry，thenumberofproductivehands，andconsequentlytheexchangeablevalueoftheannualproduceofthelandandlabourofthecountry，therealwealthandrevenueofallitsinhabitants。
Capitalsareincreasedbyparsimony，anddiminishedbyprodigalityandmisconduct。
Whateverapersonsavesfromhisrevenueheaddstohiscapital，andeitheremploysithimselfinmaintaininganadditionalnumberofproductivehands，orenablessomeotherpersontodoso，bylendingittohimforaninterest，thatis，forashareoftheprofits。Asthecapitalofanindividualcanbeincreasedonlybywhathesavesfromhisannualrevenueorhisannualgains，sothecapitalofasociety，whichisthesamewiththatofalltheindividualswhocomposeit，canbeincreasedonlyinthesamemanner。
Parsimony，andnotindustry，istheimmediatecauseoftheincreaseofcapital。Industry，indeed，providesthesubjectwhichparsimonyaccumulates。Butwhateverindustrymightacquire，ifparsimonydidnotsaveandstoreup，thecapitalwouldneverbethegreater。
Parsimony，byincreasingthefundwhichisdestinedforthemaintenanceofproductivehands，tendstoincreasethenumberofthosehandswhoselabouraddstothevalueofthesubjectuponwhichitisbestowed。Ittends，therefore，toincreasetheexchangeablevalueoftheannualproduceofthelandandlabourofthecountry。Itputsintomotionanadditionalquantityofindustry，whichgivesanadditionalvaluetotheannualproduce。
Whatisannuallysavedisasregularlyconsumedaswhatisannuallyspent，andnearlyinthesametimetoo;butitisconsumedbyadifferentsetofpeople。Thatportionofhisrevenuewhicharichmanannuallyspendsisinmostcasesconsumedbyidleguestsandmenialservants，wholeavenothingbehindtheminreturnfortheirconsumption。Thatportionwhichheannuallysaves，asforthesakeoftheprofititisimmediatelyemployedasacapital，isconsumedinthesamemanner，andnearlyinthesametimetoo，butbyadifferentsetofpeople，bylabourers，manufacturers，andartificers，whoreproducewithaprofitthevalueoftheirannualconsumption。
Hisrevenue，weshallsuppose，ispaidhiminmoney。Hadhespentthewhole，thefood，clothing，andlodging，whichthewholecouldhavepurchased，wouldhavebeendistributedamongtheformersetofpeople。Bysavingapartofit，asthatpartisforthesakeoftheprofitimmediatelyemployedasacapitaleitherbyhimselforbysomeotherperson，thefood，clothing，andlodging，whichmaybepurchasedwithit，arenecessarilyreservedforthelatter。Theconsumptionisthesame，buttheconsumersaredifferent。
Bywhatafrugalmanannuallysaves，henotonlyaffordsmaintenancetoanadditionalnumberofproductivehands，forthatortheensuingyear，but，likethefounderofapublicworkhouse，heestablishesasitwereaperpetualfundforthemaintenanceofanequalnumberinalltimestocome。Theperpetualallotmentanddestinationofthisfund，indeed，isnotalwaysguardedbyanypositivelaw，byanytrust—rightordeedofmortmain。Itisalwaysguarded，however，byaverypowerfulprinciple，theplainandevidentinterestofeveryindividualtowhomanyshareofitshalleverbelong。Nopartofitcaneverafterwardsbeemployedtomaintainanybutproductivehandswithoutanevidentlosstothepersonwhothuspervertsitfromitsproperdestination。
Theprodigalpervertsitinthismanner。Bynotconfininghisexpensewithinhisincome，heencroachesuponhiscapital。
Likehimwhopervertstherevenuesofsomepiousfoundationtoprofanepurposes，hepaysthewagesofidlenesswiththosefundswhichthefrugalityofhisforefathershad，asitwere，consecratedtothemaintenanceofindustry。Bydiminishingthefundsdestinedfortheemploymentofproductivelabour，henecessarilydiminishes，sofarasitdependsuponhim，thequantityofthatlabourwhichaddsavaluetothesubjectuponwhichitisbestowed，and，consequently，thevalueoftheannualproduceofthelandandlabourofthewholecountry，therealwealthandrevenueofitsinhabitants。Iftheprodigalityofsomewasnotcompensatedbythefrugalityofothers，theconductofeveryprodigal，byfeedingtheidlewiththebreadoftheindustrious，tendsnotonlytobeggarhimself，buttoimpoverishhiscountry。
Thoughtheexpenseoftheprodigalshouldbealtogetherinhome—made，andnopartofitinforeigncommodities，itseffectupontheproductivefundsofthesocietywouldstillbethesame。
Everyyeartherewouldstillbeacertainquantityoffoodandclothing，whichoughttohavemaintainedproductive，employedinmaintainingunproductivehands。Everyyear，therefore，therewouldstillbesomediminutioninwhatwouldotherwisehavebeenthevalueoftheannualproduceofthelandandlabourofthecountry。
Thisexpense，itmaybesaidindeed，notbeinginforeigngoods，andnotoccasioninganyexportationofgoldandsilver，thesamequantityofmoneywouldremaininthecountryasbefore。
Butifthequantityoffoodandclothing，whichwerethusconsumedbyunproductive，hadbeendistributedamongproductivehands，theywouldhavereproduced，togetherwithaprofit，thefullvalueoftheirconsumption。Thesamequantityofmoneywouldinthiscaseequallyhaveremainedinthecountry，andtherewouldbesideshavebeenareproductionofanequalvalueofconsumablegoods。Therewouldhavebeentwovaluesinsteadofone。
Thesamequantityofmoney，besides，cannotlongremaininanycountryinwhichthevalueoftheannualproducediminishes。
Thesoleuseofmoneyistocirculateconsumablegoods。Bymeansofit，provisions，materials，andfinishedwork，areboughtandsold，anddistributedtotheirproperconsumers。Thequantityofmoney，therefore，whichcanbeannuallyemployedinanycountrymustbedeterminedbythevalueoftheconsumablegoodsannuallycirculatedwithinit。Thesemustconsisteitherintheimmediateproduceofthelandandlabourofthecountryitself，orinsomethingwhichhadbeen，purchasedwithsomepartofthatproduce。Theirvalue，therefore，mustdiminishasthevalueofthatproducediminishes，andalongwithitthequantityofmoneywhichcanbeemployedincirculatingthem。Butthemoneywhichbythisannualdiminutionofproduceisannuallythrownoutofdomesticcirculationwillnotbeallowedtolieidle。Theinterestofwhoeverpossessesitrequiresthatitshouldbeemployed。Buthavingnoemploymentathome，itwill，inspiteofalllawsandprohibitions，besentabroad，andemployedinpurchasingconsumablegoodswhichmaybeofsomeuseathome。Itsannualexportationwillinthismannercontinueforsometimetoaddsomethingtotheannualconsumptionofthecountrybeyondthevalueofitsownannualproduce。Whatinthedaysofitsprosperityhadbeensavedfromthatannualproduce，andemployedinpurchasinggoldandsilver，willcontributeforsomelittletimetosupportitsconsumptioninadversity。Theexportationofgoldandsilveris，inthiscase，notthecause，buttheeffectofitsdeclension，andmayeven，forsomelittletime，alleviatethemiseryofthatdeclension。
Thequantityofmoney，onthecontrary，mustineverycountrynaturallyincreaseasthevalueoftheannualproduceincreases。Thevalueoftheconsumablegoodsannuallycirculatedwithinthesocietybeinggreaterwillrequireagreaterquantityofmoneytocirculatethem。Apartoftheincreasedproduce，therefore，willnaturallybeemployedinpurchasing，whereveritistobehad，theadditionalquantityofgoldandsilvernecessaryforcirculatingtherest。Theincreaseofthosemetalswillinthiscasebetheeffect，notthecause，ofthepublicprosperity。Goldandsilverarepurchasedeverywhereinthesamemanner。Thefood，clothing，andlodging，therevenueandmaintenanceofallthosewhoselabourorstockisemployedinbringingthemfromtheminetothemarket，isthepricepaidfortheminPeruaswellasinEngland。Thecountrywhichhasthispricetopaywillneverbelongwithoutthequantityofthosemetalswhichithasoccasionfor;andnocountrywilleverlongretainaquantitywhichithasnooccasionfor。
Whatever，therefore，wemayimaginetherealwealthandrevenueofacountrytoconsistin，whetherinthevalueoftheannualproduceofitslandandlabour，asplainreasonseemstodictate;orinthequantityofthepreciousmetalswhichcirculatewithinit，asvulgarprejudicessuppose;ineitherviewofthematter，everyprodigalappearstobeapublicenemy，andeveryfrugalmanapublicbenefactor。
Theeffectsofmisconductareoftenthesameasthoseofprodigality。Everyinjudiciousandunsuccessfulprojectinagriculture，mines，fisheries，trade，ormanufactures，tendsinthesamemannertodiminishthefundsdestinedforthemaintenanceofproductivelabour。Ineverysuchproject，thoughthecapitalisconsumedbyproductivehandsonly，yet，asbytheinjudiciousmannerinwhichtheyareemployedtheydonotreproducethefullvalueoftheirconsumption，theremustalwaysbesomediminutioninwhatwouldotherwisehavebeentheproductivefundsofthesociety。
Itcanseldomhappen，indeed，thatthecircumstancesofagreatnationcanbemuchaffectedeitherbytheprodigalityormisconductofindividuals;theprofusionorimprudenceofsomebeingalwaysmorethancompensatedbythefrugalityandgoodconductofothers。
Withregardtoprofusion，theprinciplewhichpromptstoexpenseisthepassionforpresentenjoyment;which，thoughsometimesviolentandverydifficulttoberestrained，isingeneralonlymomentaryandoccasional。Buttheprinciplewhichpromptstosaveisthedesireofbetteringourcondition，adesirewhich，thoughgenerallycalmanddispassionate，comeswithusfromthewomb，andneverleavesustillwegointothegrave。
Inthewholeintervalwhichseparatesthosetwomoments，thereisscarceperhapsasingleinstantinwhichanymanissoperfectlyandcompletelysatisfiedwithhissituationastobewithoutanywishofalterationorimprovementofanykind。Anaugmentationoffortuneisthemeansbywhichthegreaterpartofmenproposeandwishtobettertheircondition。Itisthemeansthemostvulgarandthemostobvious;andthemostlikelywayofaugmentingtheirfortuneistosaveandaccumulatesomepartofwhattheyacquire，eitherregularlyandannually，oruponsomeextraordinaryoccasions。Thoughtheprincipleofexpense，therefore，prevailsinalmostallmenuponsomeoccasions，andinsomemenuponalmostalloccasions，yetinthegreaterpartofmen，takingthewholecourseoftheirlifeatanaverage，theprincipleoffrugalityseemsnotonlytopredominate，buttopredominateverygreatly。
Withregardtomisconduct，thenumberofprudentandsuccessfulundertakingsiseverywheremuchgreaterthanthatofinjudiciousandunsuccessfulones。Afterallourcomplaintsofthefrequencyofbankruptcies，theunhappymenwhofallintothismisfortunemakebutaverysmallpartofthewholenumberengagedintrade，andallothersortsofbusiness;notmuchmoreperhapsthanoneinathousand。Bankruptcyisperhapsthegreatestandmosthumiliatingcalamitywhichcanbefallaninnocentman。Thegreaterpartofmen，therefore，aresufficientlycarefultoavoidit。Some，indeed，donotavoidit;assomedonotavoidthegallows。
Greatnationsareneverimpoverishedbyprivate，thoughtheysometimesarebypublicprodigalityandmisconduct。Thewhole，oralmostthewholepublicrevenue，isinmostcountriesemployedinmaintainingunproductivehands。Sucharethepeoplewhocomposeanumerousandsplendidcourt，agreatecclesiasticalestablishment，greatfleetsandarmies，whointimeofpeaceproducenothing，andintimeofwaracquirenothingwhichcancompensatetheexpenseofmaintainingthem，evenwhilethewarlasts。Suchpeople，astheythemselvesproducenothing，areallmaintainedbytheproduceofothermen’slabour。Whenmultiplied，therefore，toanunnecessarynumber，theymayinaparticularyearconsumesogreatashareofthisproduce，asnottoleaveasufficiencyformaintainingtheproductivelabourers，whoshouldreproduceitnextyear。Thenextyear’sproduce，therefore，willbelessthanthatoftheforegoing，andifthesamedisordershouldcontinue，thatofthethirdyearwillbestilllessthanthatofthesecond。Thoseunproductivehands，whoshouldbemaintainedbyapartonlyofthesparerevenueofthepeople，mayconsumesogreatashareoftheirwholerevenue，andtherebyobligesogreatanumbertoencroachupontheircapitals，uponthefundsdestinedforthemaintenanceofproductivelabour，thatallthefrugalityandgoodconductofindividualsmaynotbeabletocompensatethewasteanddegradationofproduceoccasionedbythisviolentandforcedencroachment。
Thisfrugalityandgoodconduct，however，isuponmostoccasions，itappearsfromexperience，sufficienttocompensate，notonlytheprivateprodigalityandmisconductofindividuals，butthepublicextravaganceofgovernment。Theuniform，constant，anduninterruptedeffortofeverymantobetterhiscondition，theprinciplefromwhichpublicandnational，aswellasprivateopulenceisoriginallyderived，isfrequentlypowerfulenoughtomaintainthenaturalprogressofthingstowardsimprovement，inspitebothoftheextravaganceofgovernmentandofthegreatesterrorsofadministration。Liketheunknownprincipleofanimallife，itfrequentlyrestoreshealthandvigourtotheconstitution，inspite，notonlyofthedisease，butoftheabsurdprescriptionsofthedoctor。