through credit operations occupies a period of some duration, commonly running over an interval recognized as a period of speculative advance or " rising prosperity." The expansion of capitalized values then takes place more or less gradually through a competitive enhancement of the prices of industrial equipment and the like. The creditors then commonly come in for their resulting share in the industrial equipment only at the period of Hquidalion, with its attendant shrinkage of values. In the timeless credit transactions involved in the modern reorganizations of industrial business, on the other hand, the creditors' claim takes effect without an appreciable lapse of time, a liquidation, or a shrinkage of vahies.
The whole process of credit extension, augmentation of business capital, and distribution of proceeds is reduced to a very simple form. The credit extension is effected in two main forms ; (a) the " financing " undertaken by the credit house in conjunction with the promoter, and (b) the issuance of debentures. The bonus of the financing house and promoter, as well as the debentures, are all included in the recapitalization, together with an increment of good-will and any other incidental items of expense or presumptive gain. The resulting collective capitalization (assets and liabilities) is then distributed to the several parties concerned in the transaction. The outcome, so far
as touches the present argument, being that when the operation is completed the ownership o£ the recapitalized industrial equipment, with whatever other property ia involved, appears distributed between the former ownei-s, the promoter, and the credit house which financed the