246 NATURE OF CAPITAL AND INCOME [Cmar. XIV

rarily below the standard. A community which owns both
mine and timber land will consequently find that the increase
 and decrease will offset each other, so that its income
will be more nearly standard than if it merely possessed
either one without the other.

§9

The last-named method is applied to the case of capital
which consists of a large number of instruments in different
 stages of production or consumption. If a weaving
mill is equipped with 20 looms of the same degree of wear,
the value of this plant will evidently depreciate and a depreciation
 fund may be necessary. But if the 20 looms are
evenly distributed throughout the different stages of wear,
and if, for convenience, we assume that one loom wears

A 8 Brueres SEU

Fie. Y.

out each year, no depreciation fund will be necessary. The
replacement of one loom annually is equivalent to such a
depreciation fund, and the capital is thereby maintained at
a constant level.
Any income stream whatever, even if its component
parts are very irregular, will, if these parts are renewed at
frequent and regular intervals, necessarily produce in total
a uniform or standard income. Let ABC (Figure 9) represent
 an income stream which at first is negative and afterward
 positive, such, for instance, as is occasioned by first
constructing and then using a machine. Let an exactly
similar income stream A’B’C’ begin a short time later, as
at A’, and so on indefinitely, at equal intervals. Tt is evident
 that after we have reached the point C' at which our
first income stream ends, we have a fairly uniform income