MODEEN BUSINESS CAPITAL 137
businesa this view is no longer of particular use for a theoretical handling of the facts. To avoid the tedium of argument it may be conceded that under the old dispensation, of partnerships and individual management in business, the basis of capitalization was the cost of the material equipment owned by any given concern ; and so far as the methods of partnership and private firms still prevail such may still be the current method of capitalization, especially dejure. But in so far as busmess procedure and business conceptions have been shaped in the image of the modem corporation (or limited liability company), the basis of capitalization has gradually shifted, until the basis is now no longer given by the cost of material equipment owned, but by the earning-capacity of the corporation as a going concern.'
A given corporation's capital is, of course, de jure a magnitude fixed in the past by an act of legislature chartering the company, or by an issuance of stock by the company under the terms of its charter or of the acts which enable it. But this de jure capitalization is nominal only, and there are few, if any, cases in which the effective capital of a company coincides with its de jurs
' This sUt« of the cue l* brought odI, In k veiled mumer, by tLa well'kDOWa propoflitloD, expounded In varying form by various writers, that the coat of equlptuent on whicb capltaliutioD mmt, in theory, take pltcs Is tbe cost of reproduction of all valuable ilemi Included, tangible and intangible.
I all