12 



ADDRESS. 



purchasers for his commoclitios. The commission merchant who 

 does this, is thus but a salesman — nothing more. 



We have spoken of capital; by this we mean simply, the amount 

 and value of property in possession of, and owned by, any one 

 doing business. Deduct from this his indebtedness, and you have 

 left his own net capital — that is, the amount of his own invest- 

 ment. Still, the gross amount of valuation is the proper capital, 

 and the^ debts owed, merely show how much of other people's 

 capital is being used. What we call business, is merely the 

 changing of capital from one form to another. For instance, a 

 man starts with 810,000 in cash ; he buys and sells merchan- 

 dise ; with the cash thus returned, he buys a factory and raw 

 material, which latter, in time, he sells in the form of manufactured 

 goods ; he sells his factory, and buys lands, or cattle, or ships, 

 or any form of property. These are all business operations, the 

 object of which, or rather, the inducement of him who conducts 

 them, is simply to make money, and this result is attained 

 when the various changes to which capital is subjected, are 

 made, so as to leave in the hands of the seller, more than he paid 

 as a purchaser. That is, the seller must get more than his 

 goods cost him, or he loses money, and each loss, to just its 

 extent, great or small, diminishes his capital ; and thus we come 

 logically to the necessity on which is based one of the golden 

 rules of a prudent business man : Always know the exact cost 

 of what you have to sell. 



This may or may not be easy ; circumstances vary. Of a 

 thing bought to-day and sold to-morrow, the cost is easily ascer- 

 tained. The merchant can easily keep a record of the cost of 

 his wares, so far as the mere monej^ paid for them is concerned, 

 but there is his rent, fuel, taxes, clerk hire, &c., &c., all of which 

 have to be paid, and must be added to the money cost of his 

 merchandise. The exact percentage of this is not easily and 

 exactly ascertained. The manufacturer finds even greater diffi- 

 culty in keeping the record of cost, tracing it through all the 

 various stages of manufacture and making the proper allowance 

 for waste, yield, and shrinkage. Still it is a necessity, and the 

 prudent business man never feels easy unless he knows what his 

 goods cost him. So far then the process of money-making seems 

 easy. It is just to know exactly the cost, and then to be sure 

 and sell for a little more, and the result is certain. 



Alas ! here we come to a difficulty which business men have 

 to encounter, and which is accepted not as a rule for government, 

 but as a truism, a fact not to be disregarded. Any article for 



