Review of Veblen’s "The Use Of Loan Credit In Modern Business," The 
Decennial Publications Of The University Of Chicago, First Series, Volume 
IV – Investigations Representing The Departments -, (Chicago, Ill.), 1903), 
Printed April 1, 1903, pp. 29-50.
By The New York Times, (Feb., 15, 1903),
[article: Defense of Watered Stock]
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DEFENSE OF "WATERED STOCK"

Prof. Veblen of the University of Chicago Declared That It Is Merely 
Capitalized Good Will.
Special to The New York Times.

CHICAGO, Feb. 14. – Prof Thorstein B. Veblen of the Department of Political 
Economy at the University of Chicago, in a contribution to the Decennial 
Series of university publications, explains many virtues in "watered 
stock."
According to Prof. Veblen, "watered Stock" is a slangy term which is never 
permitted to creep into his text, but is relegated to the footnotes. "You 
should call it 'good will,' capitalized good will, something no self-
respecting corporation should be without," he declares.
In modern business capital means "capitalized presumable earning capacity," 
and that includes the good-will of corporations, which was once known as 
watered stock, the writer continues. "The line between credit and capital, 
or between debt and property, in the values handled throughout these 
strategic operations of coalition, remains uncertain. Indeed, the old-
fashioned concepts of 'debt' and 'property' or 'liabilities' and 'assets' 
are not fairly applicable to the facts of the case – except, of course, in 
the way of a technical legal distinction."
Prof. Veblen argues that it is only a poor struggling corporation under 
incompetent management which, in these days, does not carry plenty of 
water. The preferred stock should be the material capital and the common 
stock "water" or "good-will."
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