318 NATURE OF CAPITAL AND INCOME [Cmar. XVII 
items of income from the layer next above. In Figure 
29 the interaction @ may be taken as the discounted value 
of the income taken from the layer next above, between 
the points P and @. Here we have a geometrical repre- 
sentation of the fact so often insisted upon by Professor 
Bohm-Bawerk ! and Professor Taussig that the pro- 
duction of this year’s wool is for next year’s (or next 
month’s) yarn, of this year’s yarn for next year’s cloth, of 
this year’s cloth for next year’s clothes, ete. 
In tracing the connection between the income items in 
different layers, we may consider either a cross-section be- 
tween the different layers, by drawing two vertical lines 
  
Fi. 29. 
separated by a certain interval and noting the intervening 
income taking place simultaneously in the various layers; 
or we may follow the successive time connections involved 
between one layer and the next. In the treatment which 
has been given in the previous chapters, the former method 
was employed. The present diagrammatic representation 
gives us a bird's-eye view of both. Thus, in Figure 30, 
representing the logging camp, sawmill, lumber yard, ete., 
having selected a period represented between the vertical 
line drawn at 4 and B, we may either address ourselves to 
the mutual relations of the various layers there comprised ; 
or we may address ourselves to the income item a, whose 
! Positive Theory of Capital, English translation, 1890, pp. 179-189. 
? Wages and Capital, New York (Appleton), 1896, Chapters II, ITI.