CHAPTER XI 
FOUR INCOME-CAPITAL RATIOS 
§1 
Wx have now learned what capital and income are and 
how each is measured. We have seen that capital is not to 
be confined to any particular part or kind of wealth, but that 
it applies to any or all wealth existing at an instant of time, 
or to property-rights in that wealth, or to the values of that 
wealth or of those property-rights. We have seen that in- 
come is not restricted to money income, nor does it, consist 
of a flow of commodities, nor isit a composite of commodities 
and services, nor is it necessarily regular in its receipt, nor 
must it necessarily be such as to leave capital unimpaired; 
but that it consists simply of the services of wealth, and 
that, analogously to capital, income may be measured 
either by the mere quantity of the various services rendered, 
or by their value. We have seen that in the summation 
. both of capital-value and of income-value there are two 
methods available for canceling positive and negative 
items called the “method of balances” and the “method 
of couples.” By the method of balances the negative items 
in any individual account are deducted from the positive 
items in the same account, and the difference, or balance, 
shows the net capital (or income, as the case may be) with 
which that account deals, whether this be the net capital 
(or income) of a particular owner, or of a particular article 
or group of articles of capital. The method of couples, on 
the other hand, cancels items in pairs and is founded 
on the fact that, as to capital, every liability rela- 
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