LXX ADMINISTRATIVE REPORT [kth. axx. 20 



interest on the purchase money may partly or wholh- Ix- jjaitl 

 by the sale of farm products. In whom should the increased 

 value to the land inhere? Men are divided in their opinion 

 about the justmetliod of distributing these increments of Aulue. 

 Our purpose is not to discuss such qiu^stions, but to jjoint out 

 the nature of the jiroljlems which are in\-olved in the stud^' of 

 economics. 



Wealth. Here we have to note that the fundamental })ro- 

 duction of projjerty is apjjropriation from nature by labor. 

 The substance appropriated from njiture becomes new prop- 

 erty at every stage of production, as artifacts, powers, and 

 goods. Forever the value of the property is increased. 



Thus, property remains only as property which is consumed 

 as it is olitained, Init property becomes wealth as it is saved. 

 Frugality is thus the foundation of wealth, though industry 

 and enterprise niay contribute. Frugality, industry, and 

 enterprise niay add to wealth, for wealtli already accunuilated 

 may be used as capital to increase itself 



Capital. Property, which has become wealth, may now be 

 considered as capital. Wealth may lie used as capital in the 

 purchase of machinery and the appliances necessary to the 

 use of machinery, in the purchase of material for further stages 

 of production, and, finally, in the employment of labor to aid 

 in the industry of production. We have thus considered ca])i- 

 tal in its use in manufacturing. In the same manner we niay 

 consider it in its use in commerce. These cases are sufficient, 

 perhaps, to illustrate the jjrinciple. 



Investment. Capital may be invested in such manner as to 

 jjroduce more without the owner of the capital engaging in 

 commerce or manufacturing or in any of the industries of suli- 

 .stantiation which we have heretofore considered. But as capi- 

 tal is of value in all of these industries, and as it mav be 

 invested with others who wish to conduct them, the interest on 

 the capital ruay go to the owner of tlie capital. Thus capital 

 becomes investment. That which in one stage we call prop- 

 erty, in another stage wealth, and in anotlier stage capital, we 

 here call investment, meaning by that pure investment for 

 interest. 



