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10 NATURE OF CAPITAL AND INCOME [Crae. I
and this may be done in dollars and cents, pounds and shil-
lings, francs and centimes, and so forth. This is also a spe-
cies of physical measurement, but involves the principle of
exchange. S0 much mystery has surrounded the term
¢«yalue”’ that we cannot be too careful to obtain correct
and simple ideas on the subject. In the explanation which
follows, the concept of value is made to depend on that
of price; that of price in turn on exchange; and finally,
that of exchange on transfer.
An article of wealth is said to be transferred when it
changes owners. It is to be observed that such a change
does not necessarily imply any change of place. Ordinarily,
the transfer of an article involves change in its posi-
tion. The purchase of tea or sugar is accompanied by
the delivery of these articles across the counter from dealer
to customer. But in many cases such a change of position
does not occur, and in the case of real estate it is even im-
possible. This distinction between change of ownership
and change of position is not always borne in mind. It is
sometimes said, for instance, that exports and imports
must balance in a certain manner. But if by “exports”
we mean articles that are sent out of the country, and by
“imports” those which come into it, the proposition will
not hold true. When, some years ago, Englishmen were
buying American breweries, these articles, of course,
were not exported, though they were transferred to foreign
ownership.
Transfers may be voluntary or involuntary. Examples
of involuntary transfers of wealth are transfers effected
either (1) through force and fraud of individuals, as in rob-
bery, burglary, embezzlement, ete.; or (2) through force
of government, as in taxes, court fines, ete. But at present
we have to do with voluntary transfers.
Voluntary transfers are of two kinds: (1) one-sided trans-
fers, i.e. gifts and bequests; and (2) reciprocal transfers or ez-
changes, which are the most important for economic science.
