Ibt RURAL. NEW-YORKER 
1913 
A Primer oi Economics 
By John J. Dillon 
Part III 
What is capital? 
Capital is that part of wealth which is 
saved to aid directly in future production. 
Are money and capital synonymous? 
Money and capital are not the same. 
Money is capital when it is used to pay 
labor. It can. of course, always be 
changed into capital. Credit is not capi¬ 
tal, but it, too. may be converted into 
capital, but. neither the tiling bought for 
money or on credit is capital unless it is 
used directly in production. Capital is the 
material, machinery, tools, buildings, 
equipment and wages or other mainten¬ 
ance of labor used in the process of pro¬ 
duction. 
A farmer’s good reputation may enable 
him to borrow money or to buy machinery 
on credit. Neither the reputation nor the 
credit is capital; but when the money is 
used to pay or sustain labor and the 
machinery is used in production, both 
become capital. If they would otherwise 
remain idle, the farmer added to the 
capital fund of the country by putting 
them to productive use6. 
Is all the wealth owned by a producer 
or manufacturer capital? 
The whole of a manufacturer’s or pro¬ 
ducer’s wealth is not capital. lie may 
possess luxuries and idle wealth, 1 ik-» 
diamonds and pictures. Only the wealth 
that is actually being consumed in new 
productions is capital. 
May the amount of capital in an en¬ 
terprise be expressed in terms of money? 
Capital may be expressed in two ways: 
by an inventory of the wealth employed 
in the undertaking: or we may express 
its value in dollars and cents. Instead 
of enumerating the improvements of a 
farm we would say the farmer has a 
capital of .$10,000. or any amount rep¬ 
resenting the money value of the things 
he uses to produce new wealth. 
How is capital classified? 
Capital is sometimes classified as fixed 
capital and circulating capital. When 
capital is all consumed in a single use. 
according to Mill, it is called circulating 
capital. When it is not entirely con¬ 
sumed in a single use. it is called fixed 
capital. The farmer’s barn and drain 
tile are fixed capital. His seed and horse 
feed are circulating capital. The rule is. 
however, a little rigid. The lines are 
not usually so definitely fixed, because 
of the variation of utilities. A berry 
basket or an egg crate may be used the 
second time, and under this rule would 
be classed as fixed capital. A harvester 
is a good example of fixed capital, be¬ 
cause it can be used in many harvests, 
but the binder twine on it is destroyed 
in one operation, and is circulating 
capital. 
How is capital created? 
Capital is wealth, and is created by the 
agency of land, capital and labor; but it 
i6 the result of saving. If all wealth 
were consumed as fast as it is created, 
or if it were all hoarded and stored, there 
would be no capital. Wheat lying idle 
in a bin is wealth, because it may be 
exchanged for other useful things; it be¬ 
comes capital when used to feed labor 
or when it is sown iu the field to pro¬ 
duce a new crop. 
What are the inducements to save and 
to use wealth as capital? 
Wealth becomes capital only when it is 
being consumed in whole or iu part in the 
production of new wealth. There are 
two incentives for saving: to provide for 
the future, and to increase wealth by in¬ 
vestments which pay interest and profits. 
Another inducement to save is the priv¬ 
ilege to use capital to employ one’s self in 
production. The prospect of becoming the 
owner of a farm is a greater incentive to 
the hired man to save than the mere in¬ 
terest on the saving would be. 
Ts it advisable to encourage the saving 
and use of wealth as capital? 
The more capital we use in raw ma¬ 
terial, building, implements, tools, ma¬ 
chinery, wages, etc., the more demand 
there will be for labor and the more 
wealth will be created. Of course, the 
more wealth there is the better it will be 
for everyone. The use of wealth as cap¬ 
ital is therefore desirable, aud the hoard¬ 
ing of wealth is waste. 
Can society encourage saving? 
Society encourages saving through the 
institution of private* property, aud the 
maintenance of stable governments, and 
equitable administration of law. If prop¬ 
erty were held iu common the individual 
would probably lose the incentive to save. 
If revolutions and riots were frequent and 
lawless, it would discourage savinr be¬ 
cause no one would be secure in his pos¬ 
sessions, and there would be no incentive 
to abstain from immediate enjoyment of 
the things in hand. 
What was the origin of wealth and 
capital ? 
The first man probably lived in a cave 
and subsisted on berries and nuts and 
other free gifts of nature. He had no 
wealth or capital. He labored to gather 
the food. The requisites of his existence 
were labor and natural gifts in land, and 
the powers that go with it. In time pop¬ 
ulation increased and there was need of 
more food. Up to that time, food had 
been consumed as soon as it was gath¬ 
ered. Then some enterprising member of 
the tribe gathered enough food in one day 
to keep him two days. He saved half of 
it to sustain himself during the second 
day. in which he made a rude instrument 
to catch fish. The food he saved and 
consumed while he made the fish net was 
capital. The net became capital as soon 
as he begau to use it to catch fish. 
Others would be willing to accept fish in 
exchange for the berries and nuts which 
they had gathered, so the fish and the 
nuts were wealth. The part of the fish 
and other food consumed to catch fish was 
also capital. So. too. were the first boat 
used to fish ; the trap, and the spear used 
to capture game, and the first rude im¬ 
plements used to till the soil. Capital, 
therefore, had its origin in labor and iu 
the instinct to save. Capital is the con¬ 
tribution that past labor makes to the 
present production, and it is the duty of 
society to see that its benefits are fairly 
and equally distributed among the pro¬ 
ducers of the present time. 
Pruning Grapevines 
What time of the year is desirable to 
prune grapevines and how? Vines are 
about 15 years old. and look as though 
they had not been trimmed in some years. 
Jersey City, N. J. a. a. s. 
Grapevines are usually pruned some 
time during the dormant period. At the 
time this is written pruning in the Chau¬ 
tauqua and Lake Erie fruit belt is under 
way. It is best, however, before begin¬ 
ning the work to wait until after several 
hard freezes have occurred, as these en¬ 
able one to select the best-matured wood. 
However, if one has but a small amount 
of pruning, as iu the home garden, it 
can best be delayed until shortly before 
the starting of growth in the Spring. At 
this tint*' all of the poorly ripened wood 
is plainly seen, ai d only that which is 
good is retained. 
For Concord grape the pruning should 
result in a trunk or stem from the ground 
level to a height of 5 ft., and from near 
the top of this two canes of last season’s 
growth are retained. These canes are to 
bear the fruit of the current sesaon. ami 
each carries from 0 to 10 buds. About 
two feet below this level two more canes 
are left, but of four to eight buds in 
length. The canes at the ton and those 
below are tied laterally to the wires or 
slats of the trellis. Another method 
maintains a trunk or stem to a height of 
‘JO in. from the ground, and from this 
two arms are carried along a wire at this 
level. Canes from these arms are se¬ 
lected to tie directly or obliquely to a 
wire that is about 30 iu. above the lower. 
In this case three or four well-spaced 
canes are chosen, depending on the va¬ 
riety and vigor. The principles involved 
in training to any method are the fitting 
of the pruning to the trellis if that be 
already established, the establishment of 
parts of the vino that are to serve as a 
support, i. e.. trunk and arms, and the 
pruning to fruiting wood arising from 
the older trunk and arms. Wood over 
two years serves the vine only as a sup¬ 
port. Many methods of training have 
been evolved, but the training of all va¬ 
rieties can be adapted to three at the 
most, two of which have been suggested 
above. f. e. gladwin. 
“All right back there?” called the con¬ 
ductor from the front of the car. “Hold 
on.” came a feminine voice. “Wait till I 
get my clothes on.” The entire carful 
turned and craned their necks expectant¬ 
ly. A girl got on with a basket of laun¬ 
dry !— Credit Lost. 
Restore the Potash 
During the past few years farmers have been urged to bend 
every effort to produce maximum crops without giving 
much consideration to the effect on their soils. Established 
rotations were broken up and the very best parts of the 
farm put into the most needed crops, while the poorer 
parts were neglected. 
In a way it was a return to the pioneer’s method of mining 
the soil. 
Today is the period of readjustment for the fartner as weU 
as for the merchant and the manufacturer. 
The farm labor situation and the uncertainty of future 
prices are such that prudence demands that the cost of 
producing a unit of crop be reduced as much as possible. 
This requires more crop units per acre and a return to the 
rotations known to be best for a given locality. 
The great factor in reducing the cost of crop production is 
the right method of feeding the crops. 
The composition of commercial plant foods has been pro¬ 
foundly changed during the period of Potash famine. Phos¬ 
phoric Acid has replaced all or a part of the Potash in Ameri¬ 
can fertilizer formulas, while just the opposite has taken 
place in Europe, -where there was a shortage of phosphates. 
Now is the time to get back to normal again and to return 
to the fertilizer formulas that were so profitable and satis¬ 
factory in the past. But this cannot be done without 
effort'on the part of the farmer and without sufficient 
notice to the manufacturer to prepare for the change. 
Therefore think the matter over carefully, and if your 
previous experience has shown you that 
Potash Pays 
notify your dealer that you wish to use fertilizers with 5 to 
10 per cent, of Potash and a little more to make up for the 
drain on the soil during the Potash famine. 
And do it right away, for it takes time for the manufacturer to import it 
and it is only fair that he should know what your demands will be. 
The price of Potash fias fallen much faster than the prices of farm prod¬ 
ucts so you may feel assured that you can again get a profit from its 
use. The main point is to insist that the right kind of fertilizer shall be 
ready for you when needed. In order to insure thi3, prompt action on 
your part is essential. 
Take up the matter with your dealer at once. If we can help you write to us. 
SOIL AND CROP SERVICE, POTASH SYNDICATE 
II. A. HUSTON, Manager 
42 Broadway New York 
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Trade Mark 284 Bridge Sb. MONTGOMERY, N.V. 
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