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cent lower than at the dates at which their recapitalizations occurred. Mr. Hudson's platitudes against "stock-watering," so long as he confines himself to platitudes and truisms merely, are perfectly safe. But when, in 1887, he prints the newspaper-clippings of 1872-74, and moralizes therefrom, he can hardly complain if his public demur, not only to his antique instances, but to his general safety as a guide in the complicated questions with which he assumes to deal. I mention these two examples (which are now ancient history) not to suggest an excuse for them, but as showing how entirely superfluous Mr. Hudson's employment of them is; and how as a matter of fact the wrong, so far as the public is concerned, has been entirely neutralized by application of the pooling system. Other things being equal, there is no reason why a railroad should not capitalize its earnings by employing them for betterments, any more than that an individual should capitalize his by putting back his earnings into his business. Nor is it quite apparent that any moral dishonesty enters into the act of even capitalizing those betterments which Nature and the march of civilization bring, which I understand are called (just now) "the unearned increment." I do not remember that any company has so far been guilty of this particular sort of watering; but, had the early Dutch settlers of Manhattan Island built the present elevated railway, it is interesting to speculate what sin would have been committed against natural or moral law had their assigns in 1887 capitalized that structure, not at an approximate to its earning power at the date of its construction (in, say, 1666), but at a sum representative of its actual earning power in the later year. Neither am I aware by what mental processes one can insist on "unearned" increments at all, if by that popular term we mean the increase to one's property by the efforts or investments of one's neighbors. It is fashionable, I am aware, to say that if A's corner lot increases fifty per cent by reason of the purchase and improvement of adjoining lots by B, C, D, E, and F, that fifty percentage is A's unearned increment; but is A's foresight and shrewdness in investing in the corner lot aforesaid, when he might have placed his money elsewhere, to count for nothing? Are not brains a part of one's capital, and may not A's foresight and shrewdness have been and continued a considerable part of his capital or stock in trade or earning power? Assuming that Mr. Hudson does not contemplate the removal of cerebral inequality between man and man by due process of law, it might occur that whereas the rest of the alphabet had no confidence in the future of—let us say, a certain B and C Railroad—A might foresee a Pacific Railway, or a commercial development, or the bankruptcy of a competing line—which would make it valuable, and so might without sin buy up its stock at five cents on a dollar and in due time reap substantial rewards. And supposing even that A, by the transaction (or even by recapitalizing this same B and C Railroad), was ultimately enabled to accumulate one of those enormous fortunes