"But if he sells his labor in any capacity for money: then such labor is capital for him. Thus Huskisson says: 'that he had always maintained that labor is the poor man's capital.' So Mr. Cardwell addressing his constituents said 'labor is the poor man's capital.' And a writer in a daily paper, speaking of agricultural laborers, said: 'The only capital they possess is their labor, which they bring into the market to supply their daily wants.' "So if a man expends money in learning a profession such as that of an advocate, physician, engineer, or a profession of any sort which he practices for profit, the money laid out in acquiring such knowledge is capital: and his skill, ability and knowledge are also capital. He makes an income which is measurable and taxable, just in the same way as if he had made profits by selling goods. "Now, there are two fundamentally distinct ways in which capital may increase: "1. By direct and actual increase of quantity; thus flocks, and herds, and all the fruits of the earth increase by adding to their number and quantity. "2. By exchange. "That is by exchanging something which has a low value in a place, for something which has a higher value. "Now, it is clear that money produces a profit, and becomes capital, by the second of these methods. Money is used as capital by exchanging it for some goods or labor, the produce of which may be sold or exchanged again, for a greater sum than they cost." MR. LAWYER: Mr. Banker, that is very simple and very clear, but it strikes me that a distinction which is of greater importance to us is the form that capital takes, and I would say, as preliminary to a distinction in the different forms of capital, that we should have a broad definition of what capital is, concretely expressed. _Capital is that part of the accumulated wealth of the country that is used for the purpose of profit. It is either Active, Passive, or Fixed._ The Active Capital is that portion of the wealth of the country which is employed in the production, transportation and distribution of consumable commodities, and is more accurately described as the commercial fund of the country. The Passive Capital is that portion of the wealth of the country which is derived from the commercial fund in the form of earnings, profits, savings and income from investments, and is more accurately described as the investment fund of the country. It is represented by bonds, mortgages, and other investment securities. The Fixed Capital is that portion of the wealth of the country which is represented by real estate, buildings and all permanent improvements, such as railroads, mill property, irrigation enterprises, etc.