CAPITALISING PERHAPSES 159

does not represent accumulation out of vast profits
or issues of new shares at a premium, and does not
involve a bonus by the sale to existing shareholders
at a price below the terms which could be got in the
market, but is at first sight pure water, representing
merely possibilities, perhapses, and potentialities.
This kind of Bonus share is chiefly known on the
other side of the Atlantic, and is usually damned
with bell, book and candle by purists among English
financial critics. We say on this side of the water
that every pound of an English well-financed com-
pany represents a pound which has actually been
spent and put into tangible assets which help the
company to earn profits. This boast is by no means
true, since nearly all industrial companies come into
being with something paid for in the shape of good-
will, which is of enormous importance, but can
hardly be called a tangible asset; and even in the
case of our railway companies, many millions of
original capital went into Parliamentary and legal
expenses, which have been, in one sense, dead capital
ever since, though without this expenditure the
railways could never have got to work. The
American system of Common shares, representing
what appears to be water, is only a modification of
what every company has to do, in one form or
another, on this side or anywhere in the world.
Wherever an existing business is bought out some-
thing has to be given over and above the old iron
value of the concern for the value of the connection
and other intangible assets. Wherever an entirely
new industry is started it has to meet certain initial