The nature of capital and income

Bibliographic data

Multivolume work

Identifikator:: 1896404200

Document type:: Multivolume work

Title:: Encyklopädie der Rechtswissenschaft

Place of publication:: Leipzig

Publisher:: Duncker & Humblot [u.a.]

Year of publication:: 1904-

Collection:: Economics Books

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Volume

Identifikator:: 1896404294

URN:: urn:nbn:de:zbw-retromon-236881

Document type:: Volume

Title:: Encyklopädie der Rechtswissenschaft

Volume count:: Bd. 2

Place of publication:: Leipzig [u.a.]

Publisher:: Duncker & Humblot [u.a.]

Year of publication:: 1904

Scope:: 1184 S.

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Multivolume work

Structure type:: Chapter

Title:: IV. Öffentliches Recht

Collection:: Economics Books

130 NATURE OF CAPITAL AND INCOME [Cmar. VII method is not, of course, restricted to a group of articles of the same kind, like the fifty houses of the building and loan association or the stock of stoves of the stove dealer. It applies to any stock of miscellaneous articles, and even to the entire stock of wealth of a community or the world. The net income from any such group is simply the sum of the net incomes of the various articles of wealth in exist- ence at all the points of time within the period for which that income is reckoned. In like manner may be obtained the income from any collection of property rights as capital. This application of income-and-outgo accounts occurs especially in the case of an individual. For we then find that the sources of income consist largely, not of capital-wealth, but of capi- tal-property, — partial rights to wealth, such as bonds, stocks, and mortgages. But the introduction of the idea of property as distinct from that of wealth involves no new difficulties; for we have seen that property is only another aspect of wealth, and represents simply rights to some of the services of wealth. Thus in respect to partnership rights, each partner in the firm of Smith & Jones, farmers, receives half the income of the farm. The same principle applies in respect to shares, bonds, or other forms of prop- erty. Business men are accustomed to say that a railway bond yields or earns so much income. But this merely means that the railway behind this bond yields income, a specified share of which belongs to the bondholder. Thus the true source of the services which flow to the property holder is the concrete wealth; his property-right merely specifies such portion of those services as are his. The income of a stockholder, for instance, consists of all the benefits he receives from being a stockholder, less all the sacrifices. Usually, for him, both benefits and sacrifices accrue in monetary form. His income from his stock is usually the receipt of dividends. The total net income of a person is, then, the sum of

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