The only advantage which Smith proposes by substituting paper in the room of gold and silver money, B. 2. c. 2. 434, is "to replace an expensive instrument with one much less costly, and _sometimes_ equally convenient;" that is to say, page 437, "to allow the gold and silver to be sent abroad and converted into foreign goods," and to substitute paper as being a cheaper measure. But this makes no addition to the stock or capital of the nation. The coin sent out was worth as much, while in the country, as the goods imported and taking its place. It is only, then, a change of form in a part of the national capital, from that of gold and silver to other goods. He admits, too, that while a part of the goods received in exchange for the coin exported may be materials, tools and provisions for the employment of an additional industry, a part, also, may be taken back in foreign wines, silks, &c., to be consumed by idle people who produce nothing; and so far the substitution promotes prodigality, increases expense and corruption, without increasing production. So far also, then, it lessens the capital of the nation. What may be the amount which the conversion of the part exchanged for productive goods may add to the former productive mass, it is not easy to ascertain, because, as he says, page 441, "it is impossible to determine what is the proportion which the circulating money of any country bears to the whole value of the annual produce. It has been computed by different authors, from a fifth[6] to a thirtieth of that value." In the United States it must be less than in any other part of the commercial world; because the great mass of their inhabitants being in responsible circumstances, the great mass of their exchanges in the country is effected on credit, in their merchants' ledger, who supplies all their wants through the year, and at the end of it receives the produce of their farms, or other articles of their industry. It is a fact, that a farmer with a revenue of ten thousand dollars a year, may obtain all his supplies from his merchant, and liquidate them at the end of the year, by the sale of his produce to him, without the intervention of a single dollar of cash. This, then, is merely barter, and in this way of barter a great portion of the annual produce of the United States is exchanged without the intermediation of cash. We might safely, then, state our medium at the minimum of one-thirtieth. But what is one-thirtieth of the value of the annual produce of the industry of the United States? Or what is the whole value of the annual produce of the United States? An able writer and competent judge of the subject, in 1799, on as good grounds as probably could be taken, estimated it, on the then population of four and a half millions of inhabitants, to be thirty-seven and a half millions sterling, or one hundred and sixty-eight and three-fourths millions of dollars. See Cooper's Political Arithmetic, page 47.