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282 ECONOMIC INQUIRIES AND STUDIES
Where and to what extent this may be done are, of
course, questions of fact. It is important to observe,
however, that even such a transfer, though it may take
place, would not of itself show a nation engaged in the
transfer to be living on its capital. If a nation, at the
moment of parting with some of its property or capital
to individuaJs of another nation, should at the same
time be investing an equal amount at home, clearly
there would be no reduction'of that nation's capital in
the aggregate. I t would merely be substituting an in-
vestment at home for an investment abroad, an econo-
mic circumstance of some importance, but not the same
thing as a nation living on its capital.
When we come, then, to examine specific cases of
nations wasting or spending their capital, what we have
to look for are signs 9f the national estate or property
deteriorating for want of repairs, or signs of its stocks
of useful things diminishing in the aggregate. All must
be put together and an increase in one direction set
against a decrease in another direction. For this pur-
pose, it will, probably, be found convenient to apply
values to each kind of property, so as to be furnished
with a common denominator for measuring loss in one
direction and gain in another. But it must not be in-
ferred or assumed in any way that a diminution of
capital in some specific direction involves an equivalent
loss, on balance, to the community. It might happen,
for instance, that stocks of some of the goods diminish
because of an acceleration of business methods which
make a smaller stock sufficient for the work to be done.
If, against the smaller stock of some goods, there could
be set some increase of other goods, or an increase of
fixed property of equal value, then such diminution of
stocks would clearly imply no impoverishment in any
way. The effect is that the valuation of the whole
property of a nation, at frequent intervals, appears to
be the best way to bring to book the question of ex-
penditure or waste of the property itself. Whatever
may be the precise method followed, there must be a