ABSTRACT
Physical capital versus money capital.—Under present conditions of fluctuating prices it would seem necessary, for many purposes, to make a sharp distinction between “capital” and “money.” The problem which is under consideration in these pages, that of the choice of a base for depreciation charges, demands that such a distinction be made. The first principle of sound investment is the safety and assurance of a return of and a return on “capital,” but the full meaning of that principle is uncertain until “capital” has been defined to mean either a sum of “money” (dollars) or a specific quantity of physical assets or “purchasing power.” In these pages there is stressed the importance of the latter concept of capital.
