Simplicity in "capitalization" is always to be commended, and the simpler form the less likelihood there will be of the need to call the "doctors of finance " in the shape of a " reorganization committee." A simple " capitalization " is one class of stock and perhaps a single issue of bonds, if desired - secured by a " first mortgage." This does not argue that there are not securities of corporations with nowhere near this simple " capitalization," which are not sound, for there are hundreds of such which are extremely safe, but these are very largely the outgrowth of this resourceful and rapidly growing country. Many of the older corporations did not adequately provide for this growth in their first " capitalization," and newer and more complex issues had to be brought out to provide legitimate funds for the company's increased demand for business. The advice at the beginning of this paragraph is for new companies forming. " Capitalize " simply, and look far enough ahead so that enough of all issues may be authorized to meet any demand for increased service.
Another writer puts it, "Capital is wealth which is devoted or intended to be devoted to the production of fresh wealth." - " Economic Method and Economic Fallacies," W. W. Carlile.