Distribution of Profits. 43 



and advances made to the laborers before his crops are sold, and 

 the profits (or losses) of the business. The laborers receive wages, 

 often miserably inadequate. 



A very common example of this case in this country is where 

 a merchant as business manager invests a small capital and buys 

 goods systematically on credit, renting a building and hiring 

 clerks. In this iostance the capitalists are the owner of the store 

 who receives rent, and the wholesale dealers of whom goods are 

 bought on credit, who receive interest directly, or indirectly in the 

 enhanced price of the goods, and perhaps also the bank of which 

 the merchant secures accommodation loans from time to time, 

 paying a high rate of interest. The business manager is the 

 merchant who receives interest on the capital he has invested, 

 salary as business manager, wages as salesman, and the profits 

 (or losses) of the business. The clerk or clerks receive wages. I 

 need not say that the result of doing business in this way is in 

 nine cases out of ten a net loss, which falls either upon the mer- 

 chant or fully as often upon his foolish creditors, the wholesale 

 dealers. 



A variety of this case which almost deserves to be set oft' as 

 a case by itself, is when the business manager gives the capitalist 

 a share of the proceeds or of the net profits in lieu of interest or 

 rent. The most familiar example of this is where a farm is rented 

 on shares. This is the usual method in the United States of rent- 

 ing farms, when they are rented at all. It is also, under the name 

 of Metayer rent, the usual method in France and Italy, In this 

 method of carrying on business, the distribution to the laborer is 

 wages; the distribution to the capitalist is rent in the form of a 

 share of the crop, which on the average of years is more than a 

 fair money rent. But this is usually more than offset by the ten- 

 ant's neglect to keep up the land, as he holds only from year to 

 year. And the distribution to the business manager who in this 

 case is the tenant, is interest on the capital he has invested, if any, 

 wages for bis own labor and net profits (or losses) after pacing 

 any laborers he has hired and giving the landlord his share of 

 the crop. 



