Sec. 8] INCOME ACCOUNTS 137
of making sume deductions from the total money receipts.
He also instinctively feels that not all of the disbursements
should be thus deducted ; otherwise little or nothing would
remain. The ordinary makeshift is to deduct the *“ business
expenses,” — the $500 invested in stocks and bonds and
the $500 for clerk hire. The remainder will then be
$3000, which is, for practical purposes, a sufficiently close
approximation to the true net income of $2800.
Practically, therefore, either money receipts (less “business’’
expenses) or the sum of the net incomes from securities
and labor, are good makeshifts for true income. But
even from a practical point of view they will not always
serve, while as a matter of strict theory they are always
wrong. They could be right only under the condition that
all income, from whatever source, flowed through the cash
drawer. If it were true that the net income from stocks and
bonds, the net income from the lawyer’s practice, and, in
like manner, the net income from every other source flowed
into the cash drawer, while, on the other hand, the flow out
of that drawer consisted exclusively of expenditures for
each and every satisfaction as it occurred, then the flow of
money through the cash drawer would serve as a true measure
of income, and the cash drawer might be called a sort of
income meter. The flow into it would be money income
and the eventual satisfactions obtained from it would be
real income. The two would then also have the relation
usually ascribed to them by economists. This case is
practically realized in the case of a rentier, who simply receives
money from investments and spends it for immediate
satisfactions, renting, let us say, not only a dwelling
but its furniture as well, so that practically no part of his
income can reach him except by passing through the money
stage. But few people are in exactly this position, so that
not all income passes through the meter. Some passes
around it, as, for instance, the shelter derived from a man’s
own house or the comforts from his own furniture, and hence
