In general, the wealth of a community is better judged by its fixed capital, while its thrift is known from its circulating capital. Fixed capital is always secured by consumption of circulating capital. The extension of railroads always implies great reduction of ready supplies. Money _between_ individuals and communities ranks as circulating capital, but _within_ any community the stock of money needed for domestic trade may be thought of as a permanent machine. Even machinery may be circulating capital in the hands of one who manufactures or sells it, though fixed when located in its work, and for the whole community is "fixed" as soon as its destined use is determined by its form. Thus the distinction, though real, is flexible. Its importance in discussing the industries of a country, or in understanding the relations of various industries to each other and to the world, will appear later in the book.
_Capital unproductive._--Capital is sometimes said to be unproductive in contrast with _productive_, although the very nature of capital requires productiveness. The occasion for this distinction is in the fact that means devoted to future production of wealth in a particular way may be years in returning the product; the destination is evident and the return confidently expected, yet the owner is without income or near prospect of income. Such ventures are seen in the reclaiming of waste lands by drainage, the equipment of extensive mines, and the construction of dykes and levees. Land held for sale or use in the indefinite future is a most common illustration of unproductive capital.
If wealth in some readily exchangeable form is intended for productive use, but is held for a satisfactory opportunity, it is sometimes called free or _floating capital_. It may be available for any temporary use, and so afloat among a variety of investments. Some great enterprises, like the building of the Suez canal, are begun in view of attracting floating capital. Borrowers generally look to such accumulations for their supply of funds.
_Capital in farming._--A clear view of the uses of capital may be gained from estimating the needs of a young farmer just starting out for himself. For all his equipments he must depend upon the time and effort of somebody embodied in form of tools, material and sustenance, for capital in any form is simply this. A farm of 160 acres improved, or already out of the crude pioneer stage, represents about ten years of one man's time, say $3,000. A house suitably furnished for himself and his young wife means three years of time, $1,000. His barns and corrals and intersecting fences cost two years of time, $600. His team and stock and the necessary tools make nearly three years of time again, $900. Seed, feed, provisions, clothing, insurance and wages for help, all to be used before his first year's crop is sold, require at least $500 worth of time, or nearly two years more. The needed capital for such a farm thus represents full eighteen years of the time of an able-bodied man, or $6,000. If we add to this the cost of bringing to mature age and intelligence the three able and efficient workers needed to manage and work that farm, we shall credit the past, without counting the time and energy of the young people themselves in growing and learning and gaining their skill, with thirty years of labor; $10,000, put into the farm and its occupants as they stand ready for a year's work. This accumulation is likely to show all the forms of capital described.