128 NATURE OF CAPITAL AND INCOME [Cmar. VII
proper to regard it as outgo in the case of each single house;
for the income account of the total mass of the commu-
nity’s capital is simply the combined accounts of the
individual elements. We cannot consistently do other-
wise than regard all costs, whether recurrent or not, as
outgo.
In actual business there are usually many articles of
the same kind, so that it is seldom necessary to reckon the
net income from each individual article. Such articles may
be conveniently lumped together. This we have just seen
in the case of the houses of the loan association. As an-
other example we may take the stock-in-trade of a mer-
chant. This stock yields him income, not, as in the case
of the house, by rent, but by sale; the difference between
rent and sale being simply that rent consists of a series of
contributions to income, whereas sale consists only of one.
A stock of stoves, just as a stock of houses, yields income
which is the sum of the net incomes from its individual
constituents. But the stove dealer would find the book-
keeping very troublesome were he to reckon in a separate
account the net income from each individual stove which
he buys and sells. He reaches the same final result for
his stock as a whole (or rather, for each specific category
of articles in his stock) by taking from his gross receipts
obtained by selling stoves the year’s cost of replenishing
his stock, the rent of his warehouse, salaries of clerks, and
other outgo. Were he to arrive at this result by applying
the same process to each individual stove, the individual
results would, of course, vary widely; for a stove left over
from last year (and therefore free from any item of cost
in this year’s accounts), if sold this year, would give a
large net income, while another stove, bought this year,
but not sold until next, would only have debit items in
this year’s account. But the sum of these irregular
incomes from individual parts of the merchant’s stock
will give a steady income for the whole.
