is paying 10 per cent., it is actually paying its new shareholders only 5 per cent. The margins are immediately capitalised; profits are not available for improving the business itself, nor for increasing the wages of the employees; rapid capitalisation acts as a sponge and sucks up the life sap of the enterprise. This can be seen by the study of any handbook on public companies which gives the actual dividends paid on the current price of stock. These figures work out at something about 4 per cent.
Over-capitalisation is the direct result of the joint stock phase of capitalist control. It has been estimated that the over-capitalisation of American railroads is from 50 to 200 per cent. of their actual value. The Sugar Refining Company is capitalised at three or four times its actual value, the Felt Company at ten times, the Steel and Wire Company at three times, the Standard Oil Company at six times. Our own large companies are not quite so free to over-capitalise themselves as those of America, owing to our Free Trade system, but our railways, our shipping combines, our large stores, some of our manufacturing trusts, are carrying far too heavy financial responsibilities, and the public suffer grievously in consequence.
Thus the weight of capital on industry becomes excessive, the exploiting investor becomes all-powerful, and though the statistics of incomes may improve in appearance, as a matter of fact a system of distribution is being established which must ultimately
