premium, or sell for somewhat more in the 
market than the quantity of gold or silver currency 
for which it was issued. Some people 
account in this manner for what is called the 
agio of the bank of Amsterdam, or for the superiority 
of bank money over current money
though this bank money, as they pretend, cannot 
be taken out of the bank at the will of the 
owner. The greater part of foreign bills of exchange 
must be paid in bank money, that is, by 
a transfer in the books of the bank, and the directors 
of the bank, they allege, are careful to 
keep the whole quantity of bank money always 
below what this use occasions a demand 
for. It is upon this account, they say, the 
bank money sells for a premium, or bears an 
agio of four or five per cent. above the same 
nominal sum of the gold and silver currency 
of the country. This account of the bank of 
Amsterdam, however, it will appear hereafter, 
is in a great measure chimerical
A paper currency which falls below the value 
of gold and silver coin, does not thereby 
sink the value of those metals, or occasion 
equal quantities of them to exchange for a 
smaller quantity of goods of any other kind
The proportion between the value of gold and 
silver and that of goods of any other kind, depends 
in all cases, not upon the nature and 
quantity of any particular paper money, which 
may be current in any particular country, but 
upon the richness or poverty of the mines, 
which happen at any particular time to supply 
the great market of the commercial world 
with those metals. It depends upon the proportion 
between the quantity of labour which 
is necessary in order to bring a certain quantity 
of gold and silver to market, and that 
which is necessary in order to bring thither
certain quantity of any other sort of goods. 
If bankers are restrained from issuing any 
circulating bank notes, or notes payable to 
the bearer, for less than a certain sum; and 
if they are subjected to the obligation of an 
immediate and unconditional payment of such 
bank notes as soon as presented, their trade 
may, with safety to the public, be rendered in 
all other respects perfectly free. The late 
multiplication of banking companies in both 
parts of the united kingdom, an event by 
which many people have been much alarmed, 
instead of diminishing, increases the security 
of the public. It obliges all of them to be 
more circumspect in their conduct, and, by 
not extending their currency beyond its due 
proportion to their cash, to guard themselves 
against those malicious runs, which the rivalship 
of so many competitors is always ready 
to bring upon them. It restrains the circulation 
of each particular company within a 
narrower circle, and reduces their circulating 
notes to a smaller number. By dividing the 
whole circulation into a greater number of 
parts, the failure of any one company, an accident 
which, in the course of things, must 
sometimes happen, becomes of less consequence 
to the public. This free competition
too, obliges all bankers to be more liberal 
in their dealings with their customers, lest 
their rivals should carry them away. In general, 
if any branch of trade, or any division 
of labour, be advantageous to the public, the 
freer and more general the competition, it will 
always be the more so. 
There is one sort of labour which adds to the 
value of the subject upon which it is bestowed
there is another which has no such effect
The former as it produces a value, may be 
called productive, the latter, unproductive[30] labour
Thus the labour of a manufacturer 
adds generally to the value of the materials 
which he works upon, that of his own maintenance, 
and of his master's profit. The labour 
of a menial servant, on the contrary, adds 
to the value of nothing. Though the manufacturer 
has his wages advanced to him by his 
master, he in reality costs him no expense
the value of those wages being generally restored, 
together with a profit, in the improved 
value of the subject upon which his labour is 
bestowed. But the maintenance of a menial 
servant never is restored. A man grows rich 
by employing a multitude of manufacturers
he grows poor by maintaining a multitude of 
menial servants. The labour of the latter, 
however, has its value, and deserves its reward 
as well as that of the former. But the 
labour of the manufacturer fixes and realizes 
itself in some particular subject or vendible 
commodity, which lasts for some time at least 
after that labour is past. It is, as it were, a 
certain quantity of labour stocked and stored 
up, to be employed, if necessary, upon some 
other occasion. That subject, or, what is the 
same thing, the price of that subject, can afterwards, 
if necessary, put into motion
quantity of labour equal to that which had 
originally produced it. The labour of the 
menial servant, on the contrary, does not fix 
or realize itself in any particular subject or 
vendible commodity. His services generally 
perish in the very instant of their performance, 
and seldom leave any trace of value behind 
them, for which an equal quantity of service 
could afterwards be procured
The labour of some of the most respectable