temw of maWrlftI wealth ; as counted in t«rma of money value, of courw, the holdings ot previous holders do (or need) not suffer, since the new claims take the form of an addition to tbe Dumber of capltaliied value units, although the increased sggregBtfl number ot value units constitutes a claim on the same aggregate mass of wealth as before. The pro rata reduction of tbe material magnitude of the several shares of weallli is not felt as an impoverishment, because it does not take the form of a reduction of the nominal value of the shares.
Thia capitalization of the gains arlsiog from a diQerential advantage results in a large " saving " and increase ot capital. The wealth so drawn io by tbe financiers (entrepreneurs) is nearly all held as capital, very little of it being consumed la current expenses of living. It baa been cogently argued that the profits of tbe undertakers is the chief and normal source of capiialiiied savings in the modem situation, and the method bere Indicated seems to be tiie method by which such saving is cbiefly effected. An extremely suggestive discuaaion of the undertaker's gains in this connection occurs in a paper by L. V. Birok ("DHftsheiTens Gevinst"), read before the Danish Economic Aiaodatlon, December 1901. More Immediately to the point atlll la V. Schon's discussion of Mr. Blrck's paper. (Bee KatlonalSkonomfik rawtn^rt, January-February J903, pp. 7fl. 78-80.) J. B. Clark, la I leoturea hitherto unprinted, follows a line of analysis somewhat elosdjr ' parallel with Scbou, though not carried to quite tbe same length. '
This process of corabined recapitalization and saving may be stat«d formally as follows : The initial value ot the properties submitted for coalition and recapitalization, cap, ia in the normal case augmented by tbe increment A, making tbe effective value of Ihe properties = cap-|- A, in effective units, U,. This augmented effective value ot tbe properties = F,(cap + d) is capitalized at a nominal value ot cap'= [/,(cap + A), In nominal units, Un. nominally equivalent to U^ In tbe recapitalization the number of units of capital izatlou is increased by an element of