A capitalist desires to set up a cotton manufactory. He erects buildings, he purchases machines, he buys cotton-wool, he engages workmen. The annual value of the buildings and of the machines,--that is the interest upon their cost, added to their loss by wear and tear--the price of the raw material, and the wages of the workmen, are all calculated to be paid out of the price at which the cotton thread will be sold. To engage in such large undertakings, in which the returns are slow, there must be great accumulation of capital. To engage in such large undertakings, in which the risk is considerable, there must be abundant enterprise. Without extensive accumulations of capital, which produce enterprise, they could not be engaged in at all. Capital employed in commerce circulates through the world in a thousand forms; but it all comes back in produce to the country that sends it out. Nations that have no accumulated stock, that is no capital, have no commerce; and where there is no commerce there are no ships and no sailors; and there are no comforts besides those which spring up at the feet of the more fortunate individuals of such nations. In all these operations of capital upon the enterprises of agriculture, manufactures, and commerce, another power, which is the result of accumulation, is more or less, in most cases, called into action. That power is Credit. Credit, upon a large scale, arose from the difficulty of transmitting coined money from place to place, and particularly from one country to another; and hence the invention of bills of exchange. A bill of exchange is an order by one person on another, to pay to a specified person, or his order, a sum of money specified, at a certain time and a certain place. It is evident that the bill of exchange travels as much more conveniently than a bag of money, as the bag of money travels more conveniently than the goods which it represents. For instance a box of hardware from Birmingham might be exchanged for a case of wine from Bordeaux, by a direct barter between the tradesman at Birmingham and the tradesman at Bordeaux; but this sort of operation must be a very limited one. Through the agency of merchants, the hardware finds it way to Bordeaux, and the wine to Birmingham, without any direct exchange between either place, or without either having more of the commodity wanted than is required by the market,--that is, the supply proportioned to the demand of each town. Through the division of labour, the merchant who exports the hardware to Bordeaux, and the merchant who imports the wine from Bordeaux, are different people; and there are other people engaged in carrying on other transactions at and with Bordeaux, with whom these merchants come in contact. When, therefore, the merchant at Bordeaux has to pay for the hardware in England, he obtains a bill of exchange from some other merchant who has to receive money from England, for the wine which he has sent there.