well as artificial, panics and contractions, and they all result in the transfer of the capitals of the small fry to the big sharks, or in their utter waste and destruction, as will be seen later.
Aside, however, from the "evils" and "abuses" of the corporation system, aside from the casual, although periodically recurring, waste of small capitals and their transfer to the big magnates of capital in times of panics and contractions, the usual and necessary results of the corporation system, its very uses and mode of operation are such as to make it almost nugatory as a preservative of the numbers of the capitalist class—as a means of staving off the destruction of the independent middle class.
The ordinary and usual course of corporation business is such that only a few persons, the rich who organize and control it, get most or all of the benefits derived therefrom. In order that we may clearly understand this point we must bear in mind the difference between business and loan capital. There is a difference between the return a man gets from his capital when he employs it in business himself and when he lends to another capitalist to be used in the same business. In the first contingency he gets all the profit that is made in the business, in the second only that part of the profit which is called interest. The amount of interest is not always the same proportion of the amount of profit realized, but it is always only a share and never the whole thereof. In determining the proportionate share of the owner of the capital and the undertaking capitalist, respectively, in the profits realized in the business, all other things being equal, regard is had to the risk assumed or undergone by the owner of the capital, the lowest proportion being paid as interest where the owner of the capital takes no risks whatever. This is interest proper. The balance of the profit, whatever is left after the deduction of this interest for the mere use of the capital with no risk attached, remains in the hands of the capitalist, according to capitalistic notions, for his work of supervision of the industrial
