computed at current rates of discount and allowing for risks. Cf. Beport of the Indvttrial Commiation, vol. L p. 687 (Testimony of Rogers) ; vol. Xni. pp. 108-107 (Testimony of B. R. Chapman). See also Chapter VI. below.
THE USE OF LOAN CREDIT 119
financiering in industry, as, e.g., in the railroad financiering of the third quarter of the nineteenth century, the process of expansion by means of debenture credit, in any given case, was worked out gradually, over a more or less extended period of time. But as the possibilities of this expedient have grown familiar to the business community, the time consumed in perfecting the structure of debentures in each case has been reduced ; until it is now not unusual to perfect the whole organization, with its load of debentures, at the inception of a corporate enterprise. In such a case, when a corporation starts with a fully organized capital and debt, the owners of the concern are also its creditors ; they are, at the start, the holders of both common and preferred stock, and probably also of the bonds of the company — so adding another increment of confusion to the relation between modem capital and credit, as seen from the old-fashioned position as to what capitalization and its basis should be.
This syncopated process of expanding capital by the help of credit financiering, however, is seen at its best in the latter-day reorganizations and coalitions of industrial corporations; and as this class of transactions also illustrate another interesting and characteristically modern feature of credit financiering, the whole matter may best be set out