A social reproduction approach to depreciation

It is my theme to prove that the collaboration of depreciation procedure and banking is indispensable to keep social reproduction. My proof is carried out by developing the part 3 of volume II of Capital. This part takes up the problems of social reproduction. There the case of simple reproduction is explained in detail, but in the explanation of the reproduction on an expanded scale you must meet a logical difficulty caused by the inconsistency of depreciation and renewal of fixed capitals. However, the schema of reproduction must have no contradiction. How to solve? In this article, the difficulty can be solved by collecting depreciation fund and distributing them socially. In Soviet and China, before the banking system was established, finance department in government would distribute fund to national companies for plant and collect depreciation fund with profit. It looked like a mystery for our capitalistic system. My paper can also make clear the reason why they adopted a strange accounting procedure.