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64 NATURE OF CAPITAL AND INCOME [Crap IV 
it does not matter what purpose is behind it. A social 
club, an art gallery, or a hospital may have a capital. 
In one year a joint stock company with capital stock was 
proposed for the purpose of building the yacht for defend- 
ing the America Cup. If a private family should call it- 
self a joint stock company and draw up a balance sheet, 
entering all its property, house, furniture, provisions, ete., 
on one side, with the debts on the other, no business man, 
we imagine, would hesitate to call the balance of assets over 
liabilities, which is the total wealth-value of the family, 
by the name “capital.” As a business man said to 
the writer, “Capital isn't a part of wealth, but all a 
man has got, including his automobile.” “Is that cigar 
in your mouth capital?” he was asked. “No,” he said, 
hesitatingly; but this opinion he quickly reversed as in- 
consistent with his former statement, and admitted that a 
box of cigars and each cigar in it, or out of it, for that matter, 
were a part of his stock or reserve. 
The phrases “to capitalize” and “to live on capital,” 
as used by business men, imply that capital is simply a fund. 
When we “capitalize” an annuity of $5 a year at a 
given sum, as $100, we mean that $100 is the fund of 
ready-money equivalent of $5 flowing in annually. It does 
not matter what kind of goods the $5 of income or the 
$100 of capital represents. Again, when we say that a 
man is “living on capital,” we mean that he is using up 
his stock faster than he is replacing it. The reference 
is not to any particular part or kind of the stock. A 
wealthy New Yorker who ‘was recently forced to “live 
on capital” did so by selling his accumulations of art treas- 
ures; it would be the same if he had sold his stocks and 
bonds. 
So far, then, as popular and business usage is concerned, 
we have ample warrant for the definition of capital here 
accepted, and no warrant whatever for the definitions 
ordinarily found in economic text-books.