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within reasonable limits； that is to say； within such limits as
will serve to maintain reasonably profitable prices； that is to
say； such prices as will yield the largest obtainable net return
to the concerns engaged in the business。 In this connection； and
under the existing conditions of investment and credit；
〃reasonable returns〃 means the same thing as 〃the largest
practicable net returns。〃 It all foots up to an application of
the familiar principle of 〃charging what the traffic will bear〃；
for in the matter of profitable business there is no reasonable
limit short of the maximum。 In business； the best price is always
good enough； but； so also； nothing short of the best price is
good enough。 Buy cheap and sell dear。
Intangibles of this kind； which represent a 〃conscientious
withdrawal of efficiency；〃 an effectual control of the rate or
volume of output； are altogether the most common of immaterial
assets； and they make up altogether the largest class of
intangibles and the most considerable body of immaterial wealth
owned。 Land values are of much the same nature as these corporate
assets which represent capitalised restriction of output； in that
the land values； too； rest mostly on the owner's ability to
withhold his property from productive use； and so to drive a
profitable bargain。 Rent is also a case of charging what the
traffic will bear； and rental values should properly be classed
with these intangible assets of the larger corporations； which
are due to their effectual control of the rate and volume of
production。 And apart from the rental values of land； which are
also in the nature of monopoly values； it is doubtful if the
total material wealth in any of the civilised countries will
nearly equal the total amount of this immaterial wealth that is
owned by the country's business men and the investors for whom
they do business。 Which evidently comes to much the same as
saying that something more than one…half of the net product of
the country's industry goes to those persons in whom the existing
state of law and custom vests a plenary power to hinder
production。
It is doubtful if the total of this immaterial wealth exceeds
the total material wealth in the advanced industrial countries；
although it is at least highly probable that such is the case；
particularly in the richer and more enlightened of these
countries； as； e。 g。； in America or the United Kingdom； where the
principles of self…help and free bargain have consistently had
the benefit of a liberal that is a broad construction and
an unbending application。 The evidence in the case is not to be
had in such unambiguous shape as to carry conviction； for the
distinction between tangible assets and intangible is not
consistently maintained or made a matter of record。 So； e。g。； it
is not unusual to find that corporation bonds railroad or
industrial which secure their owner a free income and are
carried as an overhead charge by the corporation； are at the same
time a lien on the corporation's real property； which in turn is
likely to be of less value than the corporation's total
liabilities。 Evidently the case is sufficiently confusing；
considered as a problem in the economic theory of capital； but it
offers no particular difficulty when considered as a proposition
in corporation finance。
There is another curious question that will also have to be
left as a moot question； in the absence of more specific
information than that which is yet available； more a question of
idle curiosity； perhaps； than of substantial consequence。 How
nearly is it likely that the total gains which accrue to these
prosperous business concerns and their investors from their
conscientious withdrawal of efficiency will equal the total loss
suffered by the community as a whole from the incidental
reduction of the output？ Net production is kept down in order to
get a profitable price for the output； but it is not certain
whether the net production has to be lowered by as much or more
than the resulting increased gain which this businesslike
strategy brings to the businesslike strategists。 The strategic
curtailment of net production below productive capacity is net
loss to the community as a whole； including both the business men
and their customers； the gains which go to these business
concerns in this way are net loss to the community as a whole；
exclusive of the business concerns and their investors。 The
resulting question is； therefore； not whether the rest of the
community loses as much as the business men gain； that goes
without saying； since the gains of the business men in the case
are paid over to them by the rest of the community in the
enhanced （or maintained） price of the products； but rather it is
a question whether the rest of the community； the common man；
loses twice as much as the business concerns and their investors
gain。
The whole case has some analogy with the phenomena of
blackmail； ransom； and any similar enterprise that aims to get
something for nothing； although it is carefully to be noted that
its analogy with these illegitimate forms of gainful enterprise
must； of course； not be taken to cast any shadow of suspicion on
the legitimacy of all the businesslike sabotage that underlies
this immaterial corporate capital and its earning…capacity。 In
the case of blackmail； ransom； and such like illegal traffic in
extortion； it is known that the net loss suffered by the loser
and the gainer together exceeds the net gain which accrues to the
beneficiary； by as much as the cost of enforcement plus the
incidental inconvenience to both parties to the transaction。 At
the same time； the beneficiary's subsequent employment and
consumption of his 〃ill…gotten gains；〃 as they are sometimes
called； whether he consumes them in riotous living or in the
further pursuit of the same profitable line of traffic； all
this； it is believed； does not in any degree benefit the rest of
the community。 As seen in the perspective of the common good；
such enterprise in extortion is believed to be quite wastefully
disserviceable。
Now； this analogy may be taken for what it is worth；
〃Analogies do not run on all…fours。〃 But when seen in the same
perspective； the question of loss and gain involved in the case
of these intangible assets and their earning…capacity falls into
something like this shape： Does the total net loss suffered by
the community at large； exclusive of the owners of these
intangibles； exceed two…hundred percent of the returns which go
to these owners？ or； Do these intangibles cost the community more
than twice what they are worth to the owners？ the loss to the
community being represented by the sum of the overhead burden
carried on account of these intangibles plus the necessary
curtailment of production involved in maintaining profitable
prices。 The overhead burden is paid out of the net annual
production； after the net annual production has been reduced by
so much as may be necessary to 〃maintain prices at a reasonably
profitable figure。〃
A few years ago any ordinarily observant person would
doubtless have answered this question in the negative； probably
without hesitation。 So also； any ordinarily intelligent votary of
the established order； as； e。g。； a corporation lawyer； a
commercial trade journal； or a trade…union official； would
doubtless； at that period； have talked down such a question out
of hand； as being fantastically preposterous。 That would have
been before the war experience began to throw light into the dark
places of business enterprise as conducted under the new order of
industry。 Today （October； 1918） it is to be admitted with such
emotion as may come to hand this question is one which can be
entertained quite seriously； in the light of experience。 In the
recent past； as matters have stood up to the outbreak of the war；
the ordinary rate of production in the essential industries under
businesslike management has habitually and by deliberate
contrivance fallen greatly short of productive capacity。 This is
an article of information which the experience of the war has
shifted from the rubric of 〃Interesting if True〃 to that of
〃Common Notoriety。〃
The question as to how much this 〃incapacity by advisement〃
has commonly amounted to may be attempted somewhat after this
fashion。 Today； under compulsion of patriotic devotion； fear；
shame and bitter need； and under the unprecedentedly shrewd
surveillance of public officers bent on maximum production； the
great essential industries controlled by the vested interests
may； one with another； be considered to approach perhaps even
conceivably to exceed a fifty…percent efficiency； as counted
on the basis of what should ordinarily be accomplished by use of
an equally costly equipment having the disposal of an equally
large and efficient labor force and equally good natural
resources； in case the organisation were designed and managed
with an eye single to turning out a serviceable product； instead
of； as usual； being manage