CAPITAL. In the early stages of civilisa tion. sheep and cattle acted as a currency. " Being counted by the head, the trine was called capitale, whence the economical term capital, the law term chattel, and our common name cattle " (Jevons).
In a joint stock company the capital is the sum subscribed by the members of the company—that is, the shareholders—for the purposes of the business. The amount which is authorised by the memorandum of association is the " nominal " capital. Of the nominal capital there is often only a part of it issued, called the " issued " capital, the remainder being referred to as " unissued." Further portions may be issued from time to time, until the full nominal capital has been issued. Of the capital which has been " issued " (called also the " subscribed " capital), only that part of it is paid up, or subscribed by the shareholders, which the directors have " called up." The part which has been called up and paid is called the " paid up " capital, the remaining part being termed the " uncalled " capital ; and it remains unpaid until a " call " is made for it by the directors. If the whole has been called up, the shares are said to be " fully paid." Of the uncalled capital, a certain portion may, if the company has so resolved, form a reserve liability, which is not to be called up except in the event of the company being wound up. (Section 59, Companies (Consolidation) Act, 1908 see RESERVE LIABILITY.) For example :
Nominal (or Authorised, or Itetistered Capital, 20,u00 shares, 0 each . . 4:1 Subscribed (or Issued) Capital, 10,00u shares f, 5 each . . . . .
10,001) shares, !!", each . .
Thesubscribed capital maybe divided into : Paid-up Capital, 10,000 shares, 12 each Uncalled Capital, 10,0oo shares, each :— Callable, it Pis, per share . . .
Reserve (callable ni a winding, up , 11 per share L10.0(li H. 1). Macleod defines capital as " an economic quality used for the purpose of profit." Under the name of capital arc included money, goods, land, personal skill, energies. labour, credit, and anything that is used to produce a profit. But wealth, in whatever form, if unemployed, is not capital. There are two species of capital, circulating or floating capital and fixed capital. Circu lating capital, in the words of John Stuart Mill, " does its work not by being kept but by changing hands." " This portion of capital requires to he constantly renewed by the sale of the finished product and when renewed is perpetually parted with in buying materials and paying %vages." Fixed capital produces its effect not by being parted with hut by being kept. Wealth expended in land, buildings, docks, roads, machinery, railways, etc., is fixed capital. (Sec SHAR' CAPITAL. •