ble which represents the groups of the industrial system, we shall
see that improvements of method in the general group _H-H'''_ have the
effect of liberating capital in the other groups and subgroups. _H'''_
is the comprehensive symbol that represents active instruments of all
kinds. It is engines and boilers, looms and spindles, lathes and
planers, rails, cars, bridges, tunnels, canals, ships, buildings, and
all the myriad instruments which actively aid man in making the things
he wants for consumption. New methods at _H-H'''_ make the supply of
all these things cheaper, which means that the labor and capital of
the group _H-H'''_ which would have been required for replacing the
instruments used in the other groups will more than suffice for that
purpose, and a part of their time may be given to making machinery,
etc., not formerly used. This amounts to liberating a part of the
fixed capital in the three groups producing _A'''_, _B'''_, and
_C'''_, although the free capital that is thus gained may in part be
used in furnishing additional appliances for use in these same groups.

_Local Concentration of Capital which causes a General Liberation of
It._--In such a case the new method used at _H'''_ may, at its
introduction, require more capital than was formerly used at that
point in the system. Building Bessemer converters was a costly
operation, though the output of cheap steel afterward saved far more
capital than the converters required. The power canals of Niagara cost
something, but the products created by means of them are cheapening
many tools of industry; and like effects follow most applications of
electricity for utilizing waterfalls and carrying to great distances
the power which they generate. They follow on a considerable scale as
the culm of coal mines is economically burned and made to generate
steam and drive dynamos. All cheapening of transportation, besides
making consumers' goods cheaper, has the same effect on producers'
goods, and by this means liberates capital. It causes a single
productive appliance to cost less than it otherwise would cost and
renders available for other purposes a part of the outlay that was
formerly required for replacing it at the end of its industrial
career.

_Effect of Speeding Machinery._--Increasing the speed of a machine is
a capital-liberating operation, since it enables a certain number of
machines to do the work of a larger number. Running spindles and looms
rapid