Sec. 6] EARNINGS AND INCOME 241 
contribution to the depreciation fund is evidently $30. 
For at the end of the first year, before the income is re- 
ceived, the capital-value will, under the supposed condi- 
tions, become not $1070, but only $1040. The first item 
of income, $70, is then received. This being deducted 
from $1040 leaves $970, which is $30 short of the original 
  
  
  
  
  
B 
E 
G 
Cc \ -=D 
A F 
Fic. 8. 
capital-value. Consequently it is necessary to restore $30 
to the capital, in order to bring it up to the original level of 
$1000. i 
Tt will evidently make no difference whether the income 
items are reinvested simply as additions to the original 
capital, or invested at the same rate of interest In some other 
form of capital. The owner of depreciating machinery may 
R