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But who is to determine the value of the thing turned into the company by the promoter? It may be a mine. Is the mine worth what the promoter paid for it? 1 It may be worth a great deal more. Who can say? Johnson's famous reply when he was asked how much his benefactor's brewery, which he as executor was selling, was worth, hits the nail on the head "I am not about to sell a parcel of vats and boilers, but the potentiality for growing rich beyond the dreams of avarice.'' Property embarked in business is worth more, as an entity, than as a group of assets regarded separately. Assets are worth, indeed, what they will earn capitalized at a reasonable rate. What is a reasonable rate will depend on the conditions surrounding the business. An earning power of $100,000 a year dependent upon a state 1 The legal questions involved are fairly simple. A promoter begins to be a promoter from the moment he conceives the idea of forming the company. Property held by him at that time may be turned in at its value, irrespective of what was paid for it. Property acquired by a promoter after that time must be turned in by the promoter at what he paid for it, irrespective of how much more it really may be worth. Of world war or the continuation of large armaments after the war, is clearly worth not as much as an earning power of $100,000 growing out of the production of goods which satisfy an everyday need of the people. It is wise to capitalize on an earning-power basis, and, if the earning power changes, to recapitalize. The recapitalization may take the simple form of a stock dividend, or it may be more complex. If, for example, earning power is high, but cash is needed, stock may be sold and partly paid with a contemporaneously declared dividend....