Private capital

“ The essential features in the adoption of any plan should be that the returns of the private owner should be in proportion to the skill and economy which he exercises in managing his business; that competition and its resulting waste be done away with; and that the industry be placed on such a safe and stable basis that the capital invested in it shall receive the lowest possible rate of interest, thus leaving the greatest possible amount for the payment of wages of labor and permitting sales of the product at a low price. ”

“ A discussion of right of property introduces an elucidation of the theory of the social fund and the doctrine that private capital is stolen from it, and the astonishing declaration that under the system prevailing in the nineteenth century, if one monopolist could have acquired title deeds to all of the earth, he might have ordered the human race off of it. ”

“ The section of the community which owns and directs the investment of the bulk of these means has received the name of capitalists.
Almost all the capital accumulated within the 25 United States is privately owned. Since the beginning of our industrial history the opportunities for accumulation have been left to individuals and the capital which industry has used has been provided by private owners. ”

“ But its direct proclamation that the system of private capital meant the abuse of wage-earners, and that it was only where the whole people owned and controlled the means of production, distribution, and exchange that the poorer section could get economic security, was never popular. ”

“ That can make a big difference, in terms of whether or not we attract private capital back into the marketplace. And ultimately the government cannot substitute for all the private capital that has been withdrawn from the system. We've got to restore confidence, so that private capital goes back in.
Okay. Jake.
JAKE: Thank you, Mr. President. My question follows Julianna's in content.
The American people have seen hundreds of billions of dollars spent already. And still the economy continues to free-fall. ”

“ Is there any organization or social system which could check the evils resulting from the present competitive system, and secure that every one who is willing to work should be furnished with remunerative employment? Socialists are quite convinced that the whole problem would be solved were private capital to be converted into co-operative or public capital. ”

“ What is needed now is not the multiplication of government reports, but corporate industry, the formation of land companies, development companies, irrigation companies, any kind of corporation that will call out private capital from its hiding places, offer employment to millions and start the wheels moving again. ”

“ To infer, because shareholders own capital which is indispensable to industry, that therefore industry is dependent upon the maintenance of capital in the hands of shareholders, to write, with some economists, as though, if private property in capital were further attenuated or abolished altogether, the constructive energy of the managers who may own capital or may not, but rarely, in the more important industries, own more than a small fraction of it, must necessarily be impaired, is to be guilty of a robust non-sequitur and to ignore the most obvious facts of {92} contemporary industry. ”

“ One is to sell it to a limited company which in return for certain concessions kindly puts up the necessary capital for development; the other way is to find the capital out of one's own private resources, and annex all the resultant profits. ”

“ To effect this, corporations have been created in most of the states and granted such liberal corporate powers, without respect to the nature of the business to be conducted, and with terms and privileges so favorable, that private enterprise without large capital cannot compete with them. ”

“ In the first place, in order to destroy the effect of chance and of the utilization of chances in creating the present accumulations in private hands, it is necessary to divert into the public treasury as far as possible the whole of that part of the national income which goes now, in the form of rent, interest, or profit, into the pockets of the owners of land and capital, and the conductors of business enterprises. ”

“ But further, apart from the class of lazy annuitants thus created, and from the improvised wealth of the financiers, middlemen between the government and the nation—as also apart from the tax-farmers, merchants, private manufacturers, to whom a good part of every national loan renders the service of a capital fallen from heaven—the national debt has given rise to joint-stock companies, to dealings in negotiable effects of all kinds, and to agiotage, in a word to stock-exchange gambling and the modern bankocracy. ”

“ Production on a large scale is greatly promoted by the practice of forming a large capital by the combination of many small contributions; or, in other words, by the formation of stock companies. The advantages of the principle are important, [since] (1) many undertakings require an amount of capital beyond the means of the richest individual or private partnership. ”

“ The characteristic feature of enlarged reproduction of the aggregate social capital—just as in our previous assumption of simple reproduction—is the reproduction of individual capitals, since production as a whole, whether regarded as simple or as enlarged production, can in fact only occur in the form of innumerable independent movements of reproduction performed by private individual capitals. ”

“ In face of the orderly communal arrays, playing into each other’s hands, with the credit of the country behind them, the ventures of the private capitalist will be at as great a disadvantage as the cottage industries of the [143] last century in face of the factory industries of our own period. The Trusts have taught us how to drive competing capitals out of the market by associated capitals. The Central Boards or County Councils will be able to utilise this power of association further than any private capitalists. ”

“ Its first and last policy is to prevent the acquisition or exclusive use of capital, by any person or association under the control of the state, with the exception, perhaps, of articles of luxury or enjoyment procured by the savings of wages. No savings can give rise to what is properly called capital, or means of production in private hands. ... Commun·ism, in its ordinary signification, is a system or form of common life, in which the right of private or family property is abolished by law, mutual consent, or vow. ”

“ Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper, as we were formerly by the old Continental paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burthen all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs. ”

“ We are afraid to put men to live and trade each on his own private stock of reason; because we suspect that the stock in each man is small, and that the individuals would do better to avail themselves of the general bank and capital of nations and of ages. ”

“ The most skilfully combined, and with the greatest foresight of objections, of all the forms of Socialism, is that commonly known as Fourierism. This system does not contemplate the abolition of private property, nor even of inheritance; on the contrary, it avowedly takes into consideration, as an element in the distribution of the produce, capital as well as labour. ”

“ Therefore in the accumulation of wealth, so far as it arises from the saving by anyone of the products of his labour, from his bequest of this capital to another who farther adds to it by saving some of the profit which the capital yields, as employed in the payment for labour or in trade either by the capitalist himself or someone to whom he lends it, and from the continuation of this process through generations, there is nothing which tends to lessen for anyone else the possibilities of ownership. ”

“ Besides these territorial corporations for purposes of government, as counties, towns, cities, &c., there are incorporated companies for carrying on business of various kinds, as turnpike and rail-road companies, and companies for the purposes of banking, insurance, manufacturing, &c. These kinds of business, to be carried on successfully, sometimes require a larger amount of money than one man possesses. A number of persons, therefore, unite their capital under an act of incorporation granting them power to manage their business which they could not have in an ordinary business partnership. ”

“ To make their industry most effective, and to enable them, individually, to put into their own pockets as large a portion as possible of their own earnings, they need, on an average, one thousand dollars each of money capital. ”

“ It most certainly follows that provisions which inhibit men from transfering capital from one capital use to another, as the exigencies of business may require, leaving, of course, the enlargement of income that thus becomes available for Governmental purposes, must strongly tend not only to impoverishment of the community, but to the depletion of Governmental resources. No man of large business activity can honestly fail to testify to innumerable cases where both the National wealth and the Government's revenue have suffered from this very cause. ”

“ At first, corporations could be formed under the general laws only for a limited number of purposes-usually those which required a relatively large fixed capital, like transportation, banking, and insurance, and mechanical, mining, and manufacturing enterprises. ”

“ It is the circulating capital which furnishes the materials and wages of labour, and puts industry into motion. Every saving, therefore, in the expense of maintaining the fixed capital, which does not diminish the productive powers of labour, must increase the fund which puts industry into motion, and consequently the annual produce of land and labour, the real revenue of every society. ”

“ Surely the legislative intent that the full value of the stock authorized and required to be subscribed, in other words, the entire capital, shall be, in fact, paid in when required,-that it shall be real, and not merely nominal,-is plain enough when the authority to exist as a corporation and to do business is given on condition that the capital subscribed shall not be less than a specified sum. ”

“ Industry has created wealth as with the touch of a magic wand; and this rapidly growing wealth has been made available capital through the instrumentality of the corporation which, by means of stocks and bonds, has gathered into giant organizations the property of hundreds and even thousands of individuals. The industrial corporations have been greatly assisted in their work of concentrating and applying capital, by the banks and other institutions that have enlarged credit and made a given amount of property capable of performing a much larger work. ”

“ It is too powerful a weapon in the hands of those alive to its possibilities, enabling a small group of men with a relatively insignificant investment of capital to control a country-wide industry. Take the simplest possible illustration: The industry of manufacturing a particular commodity is carried on by a number of corporations scattered throughout the country with an aggregate capitalization of, say, $10,000,000. A, B, and C form a holding company to acquire a bare majority of the stock of each corporation, say $5,100,000 in the aggregate. ”

“ It is investment in industry which affords the right to share in corporate control. Capital and Management receive representation on this basis. If Capital and Management are so entitled, why not Labor also? Industry is a joint venture, a venture of Labor as well as of Capital. The difference in the nature of the investment of Capital and Labor only serves to emphasize the fundamental justice of Labor's right to a share in control. The investment of Capital is in the nature of an investment of substances and dollars ; the investment of Labor is an investment in the nature of skill and life. ”

“ Now, the owner of the valuable, having transformed it into capital from this motive, is under a commercial necessity to hire laborers, in order by their help to make his capital yield a profit. Capital lying idle decreases in value even, to say nothing of its yielding no increase to itself; and the motive of the capital-owner, accordingly, is strong [192] and constant to buy the services of laborers, to marry these services with his own capitalized products, and thus to produce commodities for sale, whose value shall be greater than the present value of the capital and the services combined. ”

“ On the contrary, the corporation not only makes the control of production by a few banks and industrial combines possible; it also furnishes a means by which the very smallest fortunes can be transformed into capital and thereby be made to contribute to the centralizing process on capitalism. ”

“ Under our present system of tenure, to be sure, the purchase price of land—that is, the investment of capital that the owner has made in order to get title—may represent human labour—but this is merely to say that the owner has invested his capital in privilege, or law-made property; that he has purchased, under governmental guarantee, a certain delegation of taxing-power, precisely as the investor in governmental securities purchases a governmental guarantee that a certain share of future labour-products will be taken from the producers and turned over to him. ”