CHAPTER IV 
ESSENTIALS OF VALUE 
Cost of Physical Elements 
Supply and Demand. — The value of any property is usually 
determined by the law of supply and demand. This is perhaps 
best illustrated by reference to perishable property such as 
articles of food which can be preserved in marketable condition 
for a limited time only. According to information that may be 
available relating to the world’s supply of wheat and of coffee 
the value of the wheat or coffee will be high or low. The harvest 
prospect in the case of such perishable elements has a direct 
effect upon the market value. Or as an additional illustration 
take the limited output of a great sculptor or artist. The de- 
mand, particularly after the sculptor or artist has ceased to 
produce, may greatly exceed the supply and in such case the 
market value may rise far in excess of what would otherwise be 
the value. 
The popular actor, or vocalist, the skillful musician, the poet 
and the author have something to offer in the world’s market 
which is unique and may be in great demand, and therefore may 
command a return out of all proportion to the compensation for 
ordinary individual effort. 
Cost of Physical Elements in Relation to Value. — Productions 
of this type which have value are not here under consideration. 
It is the revenue producing property which is to be discussed 
and to which the chapters of this volume are addressed. Nearly 
every such property is made up of both physical and intangible 
elements. Taken in the aggregate this combination of physical 
and intangible elements has value” based upon earning 
capacity. This is a fundamental fact which if lost sight of may 
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