Is the distinction between productive and unproductive capital real? It has been urged by many writers at considerable length. It is susceptible of much illustration. It involves many important considerations.

There is, however, no such thing as unproductive capital. There may be misapplied wealth, misused wealth, wasted wealth; but capital reproduces. If any discrimination is necessary between that portion of wealth which is applied successfully to reproduction, and that which is intended for such an end, but fails in attaining it, we may say that capital is that portion of wealth applied to reproduction, which secures a compensation to its owner. Whatever his intention, if he uses any part of his wealth without multiplying it, it remains wealth; he has not made it capital; it may, by unproductive use, cease even to be wealth. "Wealth put into an enterprise which results in nothing is no more capital than wealth put into a house which burns down, and probably is wealth as little.

Nay, more: so far as wealth thus applied, while making some return, fails of securing the fair, average remuneration of capital, it so far ceases to be capital. It may be wealth merged for a time; it may be wealth lost for ever : it is not capital.

A complete illustration of this principle is found in common business. Suppose a man to be possessed of fifty shares of certain stock, par value one hundred dollars. The enterprise does not succeed; the stock does not pay adequate dividends; the value of the shares has sunk to fifty dollars. Would any one say that his capital, so far, was five thousand dollars? Clearly, it is but two thousand five hundred dollars. Half of his investment has been sunk; half is capital.

But it has been urged, that much capital is reproductive that does not afford a remuneration to its owner. For example: a railroad is projected and built, does not pay; its stock sinks to nothing; yet, though it does not pay dividends, it improves the industry of the country through which it passes.

We have nothing to do, in the discussion of production, with any such incidental advantages, even if they exist. It may be, that, in the consumption of wealth, we shall find principles explaining the effects of such an investment.

In the light of production, however, we can only say, that, in so far as the railroad does not remunerate its owner, it ceases to be capital. So far as it is supposed to promote agriculture or manufactures, and indirectly help the industry of the community,- it is simply on the level of the gratuitous gifts of Nature, — the powers of the wind, rain, and sun, or the courses of streams and valleys ; assisting man unquestionably, but having no value, being neither capital nor wealth.

A canal that does not pay for its building is no more capital than a river. Both may transport commodities with a great saving of labor, and with great encouragement to production. The world abounds in natural bridges, causeways, roads, mountain cuts, dikes, &c. If a man, with ill advice, constructs artificial works of this character, which prove failures, he adds just so much to what is gratuitous in the world. Economically speaking, it has ceased to be property : it has become common.