MR. BANKER: Yes, we would say in that case, that he had gotten his money back, but he could not get the $200,000 of food and clothing back, for they are in the dam and ditch. The $200,000 he gets for his bonds, if he sold them for that price, is an entirely different $200,000, as you must admit after a moment's thought. Your friend had groceries and clothing which he could sell for $200,000 in money. Now, suppose that you had had at the same time, $200,000 in your business. Your $200,000 with the $200,000 your friend had put into the dam, when finished would amount to $400,000. Now, if he had come to you to dispose of his bonds, and you had thought well enough of them to sell out your business and buy them, your $200,000 bonds would represent the food and clothing in the dam and ditch, and are no longer cash capital any more than a farm is cash capital, and it might take you longer to sell your irrigation bonds than to sell a farm. You said it took the bank ten years to get rid of them. MR. MERCHANT: Oh, I see that now. We have simply converted $200,000 of cash capital into $200,000 of passive or fixed capital. Before he built the ditch he had $200,000 and before I sold out my grocery business I had $200,000, making $400,000 of cash capital. Now he has $200,000 of cash capital and I have $200,000 of fixed capital, possibly an eternal investment in the bonds. That is what you would call a permanent investment, I suppose, for it might take me twenty years to demonstrate the value of the enterprise as it did the bankers. MR. BANKER: Now, Mr. Merchant, I want you to mark and remember this; in fact, I want all of you gentlemen to set this down in your memories so that it can never be dislodged. These irrigation bonds would continue as passive or fixed capital until the earnings or sale of the property, covered by the ditch, should not only pay the interest upon them, but should pay off the principal as well, even if it took a thousand years to accomplish this result. MR. LABORINGMAN: That is nothing but a straight real estate loan as far as I can see, and not a very good one at that.