Book II: Chapter 4 - Page 2

replaced from the rents of their estates. It is not properly
borrowed in order to be spent, but in order to replace a capital which had
been spent before.

Almost all loans at interest are made in money, either of paper, or of gold
and silver ; but what the borrower really wants, and what the lender readily
supplies him with, is not the money, but the money's worth, or the goods
which it can purchase. If he wants it as a stock for immediate consumption,
it is those goods only which he can place in that stock. If he wants it as a
capital for employing industry, it is from those goods only that the
industrious can be furnished with the tools, materials, and maintenance
necessary for carrying on their work. By means of the loan, the lender, as
it were, assigns to the borrower his right to a certain portion of the
annual produce of the land and labour of the country, to be employed as the
borrower pleases.

The quantity of stock, therefore, or, as it is commonly expressed, of money,
which can be lent at interest in any country, is not regulated by the value
of the money, whether paper or coin, which serves as the instrument of the
different loans made in that country, but by the value of that part of the
annual produce, which, as soon as it comes either from the ground, or from
the hands of the productive labourers, is destined, not only for replacing a
capital, but such a capital as the owner does not care to be at the trouble
of employing himself. As such capitals are commonly lent out and paid back
in money, they constitute what is called the monied interest. It is
distinct, not only from the landed, but from the trading and manufacturing
interests, as in these last the owners themselves employ their own capitals.
Even in the monied interest, however, the money is, as it were, but the deed
of assignment, which conveys from one hand to another those capitals which
the owners do not care to employ themselves. Those capitals may be greater,
in almost any proportion, than the amount of the money which serves as the
instrument of their conveyance; the same pieces of money successively
serving for many different loans, as well as for many different purchases.
A, for example, lends to W £1000, with which W immediately purchases of B
£1000 worth of goods. B having no occasion for the money himself, lends the
identical pieces to X, with which X immediately purchases of C another £1000
worth of goods. C, in the same manner, and for the same reason, lends them
to Y, who again purchases goods with them of D. In this manner, the same
pieces, either of coin or of paper, may, in the course of a few days, serve
as the Instrument of three different loans, and of three different
purchases, each of which is, in