capital, in the same manner as that of the instruments 
of husbandry; their maintenance 
is a circulating capital, in the same manner as 
that of the labouring servants. The farmer 
makes his profit by keeping the labouring 
cattle, and by parting with their maintenance
Both the price and the maintenance of the cattle 
which are bought in and fattened, not for 
labour, but for sale, are a circulating capital
The farmer makes his profit by parting with 
them. A flock of sheep or a herd of cattle
that, in a breeding country, is brought in neither 
for labour nor for sale, but in order to 
make a profit by their wool, by their milk
and by their increase, is a fixed capital. The 
profit is made by keeping them. Their maintenance 
is a circulating capital. The profit is 
made by parting with it; and it comes back 
with both its own profit and the profit upon 
the whole price of the cattle, in the price of 
the wool, the milk, and the increase. The 
whole value of the seed, too, is properly
fixed capital. Though it goes backwards and 
forwards between the ground and the granary, 
it never changes masters, and therefore 
does not properly circulate. The farmer 
makes his profit, not by its sale, but by its 
The general stock of any country or society 
is the same with that of all its inhabitants 
or members; and, therefore, naturally divides 
itself into the same three portions, each of 
which has a distinct function or office. 
The first is that portion which is reserved 
for immediate consumption, and of which 
the characteristic is, that it affords no revenue 
or profit. It consists in the stock of food
clothes, household furniture, &c. which have 
been purchased by their proper consumers, 
but which are not yet entirely consumed. The 
whole stock of mere dwelling-houses, too, 
subsisting at any one time in the country
make a part of this first portion. The stock 
that is laid out in a house, if it is to be the 
dwelling-house of the proprietor, ceases from 
that moment to serve in the function of a capital
or to afford any revenue to its owner
A dwelling-house, as such, contributes nothing 
to the revenue of its inhabitant; and though 
it is, no doubt, extremely useful to him, it is 
as his clothes and household furniture are useful 
to him, which, however, make a part of 
his expense, and not of his revenue. If it is 
to be let to a tenant for rent, as the house itself 
can produce nothing, the tenant must always 
pay the rent out of some other revenue
which he derives, either from labour, or stock
or land. Though a house, therefore, may yield 
a revenue to its proprietor, and thereby serve 
in the function of a capital to him, it cannot 
yield any to the public, nor serve in the function 
of a capital to it, and the revenue of 
the whole body of the people can never be 
in the smallest degree increased by it. Clothes 
and household furniture, in the same manner
sometimes yield a revenue, and thereby 
serve in the function of a capital to particular 
persons. In countries where masquerades 
are common, it is a trade to let out 
masquerade dresses for a night. Upholsterers 
frequently let furniture by the month 
or by the year. Undertakers let the furniture 
of funerals by the day and by the 
week. Many people let furnished houses, and 
get a rent, not only for the use of the house
but for that of the furniture. The revenue
however, which is derived from such things
must always be ultimately drawn from some 
other source of revenue. Of all parts of the 
stock, either of an individual or of a society
reserved for immediate consumption, what is 
laid out in houses is most slowly consumed
A stock of clothes may last several years; a 
stock of furniture half a century or a century; 
but a stock of houses, well built and properly 
taken care of, may last many centuries. 
Though the period of their total consumption
however, is more distant, they are still as 
really a stock reserved for immediate consumption 
as either clothes or household furniture
The second of the three portions into which 
the general stock of the society divides itself, 
is the fixed capital; of which the characteristic 
is, that it affords a revenue or profit without 
circulating or changing masters. It 
consists chiefly of the four following articles. 
First, of all useful machines and instruments 
of trade, which facilitate and abridge 
Secondly, of all those profitable buildings 
which are the means of procuring a revenue
not only to the proprietor who lets them for 
a rent, but to the person who possesses them, 
and pays that rent for them; such as shops
warehouses, workhouses, farm-houses, with all 
their necessary buildings, stables, granaries
&c. These are very different from mere dwelling-houses
They are a sort of instruments 
of trade, and may be considered in the same 
Thirdly, of the improvements of land, of 
what has been profitably laid out in clearing, 
draining, inclosing, manuring, and reducing 
it into the condition most proper for tillage 
and culture. An improved farm may very 
justly be regarded in the same light as those 
useful machines which facilitate and abridge 
labour, and by means of which an equal circulating 
capital can afford a much greater revenue 
to its employer. An improved farm is 
equally advantageous and more durable than 
any of those machines, frequently requiring 
no other repairs than the most profitable application 
of the farmer's capital employed in 
cultivating it. 
Fourthly, of the acquired and useful abilities 
of all the inhabitants and members of 
the society. The acquisition of such talents, 
by the maintenance of the acquirer during his