Due to motion of charges of atoms of a substance there are magnetic properties associated with atoms and hence the molecules. Thus we have:
(i) Each molecule of magnetic substance, (whether magnetised or unmagnetised) is an independent magnet.
(ii) In an unmagnetised substance, these molecular magnets are randomly oriented and form closed chains.[Fig. LAQ 19 (a)] so they neutralise the effect of each other.
(iii) In a magnetised substance, these molecules are arranged such that the north pole of each molecular magnet points in one direction and the south pole in the opposite direction [Fig. LAQ 19 (b)]. It is obvious from the figure that near one end of the bar, there is north pole of each molecular magnet and therefore acts like a strong N pole, while near the other end, there is south pole of each molecular magnet and therefore acts like a strong S pole.
(iv) When a piece of iron is magnetised, the molecular magnets start setting themselves along straight chains and the magnetism of the piece increases.
(v) When all the molecular magnets are set along the direction of an externally applied magnetic field, the magnetic substance is said to be saturated with magnetism, and its magnetism cannot be further increased.
(vi) It also establishes that the strength of the two poles are equal.

(vii) When a magnet is strongly heated or hammered, the kinetic energy of the molecules increases and, therefore, the molecular alignment gets disrupted and molecules go back to the closed chain arrangement due to thermal agitation and thus the magnet gets demagnetised.