32

ECONOMIC PRINCIPLES

induced to specify two problems, the one relating to the
existing supply of capital, in more or less specialised forms,
considered as a store of capital; the other relating to the
supply of new capital, considered as a stream. The capital
in the store is mainly in forms which cannot be applied to
any purpose other than that for which the form was designed,
without loss of efficiency. The stream of new capital may
be given whatever forms seem most likely to render it most
effective, Regarded as a supply, its units may be treated as
interchangeable with one another as freely as different coins
of the same denomination. We have already given some
attention to the conditions determining demand for new
capital. The anticipations of being able to so use it as to
cause it to return more than it costs are the sources of such
demand, that is to say, the field of profitable investment is
the determining feature. This is partly found in extensions
 of existing enterprises, partly in new ventures. The
probable yield from such investments will need to be
=stimated after making allowance for risks of loss or of
irregular returns, and also for services of management,
before the demand-price for the use or control of capital,
merely as such, can be arrived at. The field of investment
may present opportunities for the employment of small
amounts of capital so as to give a large yield, but, the larger
the amount of capital for which there are desired investments,
 the smaller the net yield below which expectation of
return is not required to sink. So far as concerns the
axtension of old lines of investment, experience may afford
a more conservative estimate of probable net yields than is
entertained where new ventures tempt the investor. The
estimate of the risk is not made alike by all investors, and
equal gross yields may represent very different net yields,
very different demand-prices for capital, to different investors.
This is a feature of the constitution of the market for the
loan of capital which must not be ignored. Actual investment
 of new capital may take place in old enterprises; that
is to say, the owner of the uninvested capital may exchange
his command of fluid capital for the ownership of capital
already invested. The new capital is not, however, finally