Ske. 5] CAPITAL SUMMATION 97

It is therefore a cardinal error to regard credit as increasing
 capital by the amount of that credit. Indirectly,
credit may result in an increase of capital, through
stimulating trade and production and by getting the
management of capital into the right hands and its
ownership into the most effective form; but the amount
of any such increase of capital thus indirectly produced
bears no necessary relation to the amount of the credit
itself. If capital is increased, the credit does not constitute
the increase, but merely represents a part ownership in the
final total, after all the increments have been counted in.

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A great deal of confusion in legislation and writing could
be avoided if the two methods of summing up capital were
distinguished and their interrelations recognized. In taxation,
 the two methods are often confused. A chief problem
 of efficient taxation is how to tax all property once,
and none of it more than once. There are two solutions:
One is to tax the amount owned by each real person in a
list which expresses the method of balances; this method
seeks out the real owners or part owners of wealth. The
other is to tax the actual concrete wealth in a list which
expresses the method of couples; this method seeks out the
real wealth owned. At present the two are much confused.
Legislators too often fail to perceive that under the first,
or owner-method, corporations should not be taxed, for
they are not true owners; and that under the second, or
wealth-method, bonds, stocks, and other part-rights to
wealth should not be taxed, for these are sufficiently included
 when the actual railways and other wealth are taxed,
which these securities represent.
It is not claimed, of course, that a complete system of
taxation ean be worked out merely by choosing one of the
two forms of taxes just indicated. We are here only concerned
 in pointing out that the distinction between the

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