MR. BANKER: Mr. Lawyer, I think that that last statement of yours will assist Mr. Farmer very greatly in understanding the real difference between wealth and property. The difference is certainly very evident.
MR. FARMER: Yes, I have caught on. There may be a very great difference between wealth and property, although we are in the habit of using these two words without any reference to the special meaning that really attaches to them. In our conversation we use them indiscriminately, and I don't know as that makes any difference; but for our purposes, that is, for the purposes of these discussions, I think it is very important that we should know the difference; because something may arise that will compel a recognition of the real difference between these two words.
MR. BANKER: I was just going to remark that the very difference between these two words suggests one of the other words we have agreed to consider tonight, and that is the word "capital"; for capital is a form of wealth, although all wealth is not capital.
(1) Of material things, such as houses, land, etc.;
(2) Of productive power, called labor, etc.;
(3) Of rights, such as checks, notes, bonds, etc.
The owner of these things may use some of them for his convenience. He may so use some of them as to produce a profit. Now, when anything is traded with, or so used as to produce a profit, or as we often say used productively, it is called capital.
Stephens defines capital thus: "Capital, the source whence any profit or revenue flows."
So Senior says: "Economists are agreed that _whatever_ gives a profit is properly called _capital_."
Again M.D. Fontenay says: "Wherever there is a _revenue_, you perceive _capital_."
MacLeod says: "Capital is an economic quantity used for the purpose of profit." I would suggest that we say _Capital is anything used for the purpose of profit_.
MacLeod uses this language also: "If a person has a sum of money, he may expend it on his household requirements; or in gratifying his personal taste by buying books, or statues, or pictures, etc. Money spent in this way is not _capital_.
"But if he buys goods of any sort for the purpose of selling them again with a _profit_: Then the money so employed is '_capital_,' and the goods so purchased are also _capital_, because they are intended to be sold with a '_profit_.'