MODERN BUSINESS CAPITAL 175
the property, more and more widely as the scope of corporation finance widens. The discretion, the management, liea in the hands of the holders of the intangible forms of property ; and with the extension of corporation methods it is increasingly true that this management, again, centres in the hands of those greater business men who hold large blocks of these intangible assets. The reach of a business man's discretionary control, mider corporation methods, is not proportioned simply to the amount of his holdings. If his holdings are relatively small, they give him virtually no discretion. Whereas if they are relatively large, they may give him a business discretion of much more than a proportionate reach. The effective reach of a business man's discretion might be said to increase as the square of his holdings; although this is to be taken as a suggestive characterization rather than as an exact formula.
Among the holdings of industrial property that coimt in this way toward control of the business situation, the intangible assets (represented by common stock, good-will, and the like) are chiefly of consequence. Hence follow these two results : ^ fortunes of property owners are in large measure dependent on the discretion of others — the owners of intangible property; and the management of the industrial equipment tends strongly to centre in the hands of men who do not own the
industrial equipment, and wh^o have only a remote mterest in the efficient working of this equipment The property of those who owd less, or who own only material goods, is administered by those who own more, especially of immaterial goods ; and the material processes of industry are under the control of men whose interest centres on an increased value of the immaterial assets.^