In certain cases the wear and tear, and therefore its replacement, is practically infinitesimal so that nothing but costs of repairs have to be charged. Lardner's statements below relative to works of art in railroading apply in general to all such durable structures as docks, canals, iron and stone bridges, etc. "That wear and tear which, being due to the slow operation of time acting upon the more solid structures, produces an effect altogether insensible when observed through short periods, but which, after a long interval of time, such, for example, as centuries, must necessitate the reconstruction of some or all even of the most solid structures. These changes may not unaptly be assimilated to the periodical and secular inequalities which take place in the movements of the great bodies of the universe.
The operation of time upon the more massive works of art upon the railway, such as the bridges, tunnels, viaducts, etc., afford examples of what may be called the secular wear and tear. The more rapid and visible deterioration, which is made good by repairs or reconstruction effected at shorter intervals, is analogous to the periodic inequalities. In the annual repairs is included the casual damage which the exterior of the more solid and durable works may from time to time sustain; but, independently of these repairs, age produces its effects even on these structures, and an epoch must arrive, however remote it be, at which they would be reduced to a state which will necessitate their reconstruction. For financial and economic purposes such an epoch is perhaps too remote to render it necessary to bring it into practical calculation, and therefore it need here only be noticed in passing."(Lardner, loc. cit., pp., 38, 39.)
This applies to all similar structures of secular duration, in which cases therefore the capital advanced need not be gradually replaced commensurate with their wear and tear, but only the annual average costs of maintenance and repair need be transferred to the prices of the product.
Although, as we have seen, a greater part of the money returning for the replacement of the wear and tear of the fixed capital is annually, or even in shorter intervals, reconverted into its bodily form, nevertheless every single capitalist requires a sinking fund for that part of his fixed capital which falls due for reproduction only after a lapse of years but must then be entirely replaced. A considerable component part of the fixed capital precludes gradual reproduction because of its peculiar properties.
Besides, in cases where the reproduction takes place piecemeal in such a way that at short intervals new stock is added to the depreciated old stock, a previous accumulation of money of a greater or smaller amount, depending on the specific character of the branch of industry, is necessary before the replacement can be effected. Not just any sum of money will suffice for this purpose; a definite amount is needed.
If we study this question on the assumption of ****** circulation of money, without regard to the credit system, of which we shall treat later, [The capitalist credit system is treated in parts IV and V of the third volume of Capital. -- Ed .] then the mechanism of this movement is as follows: It was shown (Buch I, Kap. III, 3a) [English edition: Ch.
III, 3a, -- Ed .] that the proportion in which the aggregate mass of money is distributed over a hoard and means of circulation varies steadily, if one part of the money avail-able in society constantly lies fallow as a hoard, while another per-forms the functions of a medium of circulation or of an immediate reserve fund of the directly circulating money. Now in our case money that must be accumulated as a hoard in the hands of a relatively big capitalist in rather large amounts is thrown all at once into circulation on the purchase of the fixed capital. It then divides again in society into medium of circulation and hoard. By means of the sinking fund, in which the value of the fixed capital flows back to its starting-point in proportion to its wear and tear, a part of the circulating money again forms a hoard, for a longer or shorter period, in the hands of the same capitalist whose hoard had, upon the purchase of the fixed capital, been transformed into a medium of circulation and passed away from him. It is a continually changing distribution of the hoard which exists in society and alternately functions as a medium of circulation and then is separated again, as a hoard, from the mass of the circulating money. With the development of the credit system, which necessarily runs parallel with the development of modern industry and capitalist production, this money no longer serves as a hoard but as capital; however not in the hands of its owner but of other capitalists at whose disposal it has been placed.
NOTES
[20] On account of the difficulty of determining what is fixed and what circulating capital, Herr Lorenz Stein thinks that this distinction is meant only to facilitate the treatment of the subject.
[21] End of Manuscript IV, beginning of Manuscript II. -- Ed .
[22] The quotations marked R. C. are from: Royal Commission on Rail- ways. Minutes of Evidence taken before the Commissioners. Presented to both Houses of Parliament, London, 1867.
The questions and answers are numbered and the numbers given here.
