turning over his stock, and is on the look-out for opportunities of applying and replacing it frequently. This is equally true of the capital of the financier and the merchant; and till recently it held good of capital engaged in the processes of manufacture and of tillage. The age of invention has rendered it necessary to lock up large amounts of capital in expensive machinery, or to sink it in permanent improvements of the soil; but, at the beginning of the modern era, capital might be described as a mass of wealth that was constantly being put into circulation and replaced. The financier exchanged his ready money for securities, which he held till the sum was repaid; the merchant bought and exported a cargo of goods which he hoped to sell for money; manufacturers obtained the services of labour by paying wages, and bought materials which were converted into commodities for sale. Facilities for exchange were necessary at every step, before the capitalist administration of industry and agriculture could be introduced; there had been no opportunity for such an introduction, so long as society was organised on a basis of natural economy. In any department of life where payments are made in kind or in service rather than in money, no room remains for the operation of the capitalist. So long as the cultivator' continues to live on the produce of his fields and his stock, and only occasionally offers some of his surplus for sale, he is conducting his business in a fashion quite incompatible with the aims of the enterprising capitalist, who desires to dispose of his whole crop at a profit. During the long ages when society had been organised in self-sufficing estates, the famXlia, in each being engaged in catering for household needs and not in working for a market, there was no true exchange, and therefore no occasion for a measure of value, or for the use of money, among those engaged in different avocations.
The transition from natural to money economy was a gradual process, and afforded great opportunities of gain to the men whose wealth consisted of coins and bullion. In the twelfth and thirteenth centuries many private persons had large hoards, and received a handsome income by making advances to such wealthy people as were in temporary straits for want of ready money. Much of this business arose in connexion with the revenue system; kings were glad to borrow on the security of the royal jewels, thus making it possible to anticipate the slow collection of taxes and fit out an armed expedition. The financiers also lent money to landed proprietors, to enable them to meet some sudden demand for an aid, and took as security the title-deeds of an estate so as to enjoy the certainty of being reimbursed when rents were due. The lending of the thirteenth and fourteenth centuries was almost entirely for military and other unproductive purposes; it enriched the moneyed men who obtained high interest on their loans, but it did not provide capital or invigorate the industry of the country. Even in those cases where debts were contracted in order to erect magnificent