To accomplish the turnover we have examined above, merchant's capital does not first have to buy commodities for its full amount of value, and then to sell them. Instead, the merchant performs both movements simultaneously. His capital then breaks up into two parts. One of them consists of commodity-capital, and the other of money-capital. He buys and converts his money into commodities at one place. Elsewhere, he sells and converts another part of his commodity-capital into money. On one side, his capital returns to him in the form of money-capital, while on the other he gets commodity-capital. The larger the portion in one form, the smaller the portion in the other. This alternates and balances itself. If the use of money as a medium of circulation combines with its use as a means of payment and the attendant development of the credit system, then the money-capital part of merchant's capital is reduced still more in relation to the volume of the transactions this merchant's capital effects. If I buy £3,000 worth of wine on three months' credit and sell all the wine for cash before this term expires, I do not need to advance a single penny for these transactions. In this case it is also quite obvious that the money-capital, which here acts as merchant's capital, is nothing more than industrial capital in its money-capital form, in its process of reflux in the form of money. (The fact that the manufacturer who sold £3,000 worth of wine on three months' credit may discount his promissory note at the banker's does not alter the matter at all and has nothing to do with the merchant's capital.) If market-prices should fall in the meantime by, say, 1/10, the merchant, far from making a profit, would recover only £2,700 instead of £3,000. He would have to put up £300 out of his own pocket. These £300 would serve merely as a reserve to balance the difference in price. But the same applies to the manufacturer. If he himself had sold at falling prices, he would likewise have lost £300, and would not be able to resume production on the same scale without reserve capital.