Bomething of a monopoly position, locally or generally." Should the management not succeed in these endeavors to gain an assured footing on some such "immaterial" ground, its chances of success among rival corporations are precarious, its standing is insecure, and its managers have not accomplished what is looked for at their hands. The '| substantial foundation of the industrial corporation is its immaterial assets.
The typical modern industrial corporation is a concern of sufficient magnitude to be of something more than barely local consequence, and extends its trade relations beyond the range of the personal contact of its directive officials. Its properties and its debts are also commonly owned, in part at least, by persons who stand in no direct personal relation to the board of managers. In an up-todate corporation of this character the typical makeup of the corporate capital, or capitalization, is somewhat as follows : The common stock approximately covers the immaterial properties of the conoem, unless these immaterial properties are disproportionately large and valuable ; in case of a relatively small and local corporation the common stock will ordinarily somewhat more than cover the value of the immaterial property and comprise something of the plant ; in case of the larger concerns the converse is likely to be true, so that here
See Chapter m. abon.
the immaterial property, intangible assets, is made to serve in some measure as a basis for otker seciiritiea as well aa for the common stock.