PROFITS AND THE COUNTING-ROOM 285 



In fact, the American whale fishery admirably illustrated 

 what has been termed, aptly enough, the "prizes and blanks" 

 theory of business profits. This concept holds that in any 

 field of business activity, but particularly in the more hazard- 

 ous ones, the individual instances of exceptionally high profits 

 serve merely to offset other individual cases of disastrous re- 

 verses and of appreciable losses. Specific illustrations of great 

 profits do not necessarily betoken an unusually prosperous in- 

 dustry: they may be only a counterpoise which is essential in 

 order to bring the returns for the industry as a whole up to an 

 ordinary level. ^^ Such an analysis, whatever may be its claim 

 to general acceptance, seems peculiarly applicable to the condi- 

 tions of the whaling industry. For certainly the lottery of 

 individual whaling voyages yielded both prizes and blanks 

 aplenty. 



Thus the normal rate of profit for the industry as a whole 

 resulted, in large part at least, from the cancellation of ex- 

 tremes. But in spite of the staggering variations in its constit- 

 uent elements, this normal rate of profit continued to absorb a 

 surprisingly steady percentage of the total net proceeds of the 

 industry. Several independent sets of figures agree in show- 

 ing that approximately seventy per cent of the net proceeds of 

 American whaling went to the entrepreneurs, leaving the re- 

 maining thirty per cent for officers and men. As early as 

 1834 a writer in the North American Review stated that, on 

 the average, whaling owners secured sixty-nine per cent of the 

 net income of the whaling industry, and that officers and men 

 were rewarded with the balance of thirty-one per cent.^* Sim- 

 ilar estimates of seventy per cent and thirty per cent, respec- 

 tively, were repeated in 1844 by an early whaling statisti- 

 cian.^^ And finally, a chance sampling of seven voyages, for 

 which suitable and accurate accounts were available, yielded 

 average figures of 69.7% and 30.3%. The sums and per- 

 centages pertaining to each voyage are given below.^^ 



23 See especially Marshall, Alfred, "Principles of Economics," 7th Edition, 

 p. 621. 



2* Williams, J. R., writing in the North American Revieiu for January, 1834, 

 Vol. XXXVIII, p. 105. 



25 Grinnell, Joseph, "Speech on the Tariff, With Statistical Tables of the 

 Whale Fishery," p. 9. 



26 The figures for the six voyages of the Minerva and the Marcella were 



