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work, or the performance of some public function which it is supposed will not be undertaken without such franchise. Thus, the privilege is granted to the national banks to issue bills to be circulated as money; or to a railroad company to construct and operate a given line of railroad, free from immediate competition. The value of the franchise, in these cases, is evidently a product of the presence and work of society; and government, acting in the place of society, sells the privilege for the benefit which it is supposed will result to society from the work done. That these franchises are to be considered as a species of property is evident from the fact that they are often sold by the original corporators before a stroke of work is done under them. Railroad charters have frequently been thus sold in this country.

The good-will of an established business is of the nature of a private franchise, the value of which has been created by the long services of the tradesman to a given circle of customers. This good-will is often of great value, and, in the case of an old and well established newspaper, is sometimes the most valuable part of the property. The seller of goodwill agrees to leave the business, and thus, as far as possible, turns his clients, customers, or subscribers over to the purchaser.

Debts, or the notes, bonds, or other evidences of debt, are usually counted as property; but it is clear that debts are but claims of ownership on property supposed to be in the hands of the debtor. If A buys a farm from B, paying $5,000 in cash, and giving a bond and mortgage for the $10,000 yet due, the bond does not increase the amount of property in existence; it only shows that the real ownership of so much of the value of the farm still remains in B, the original holder. The total interest-bearing debt of the United States outstanding July 1, 1881, and represented by government bonds, was $1,639,567,750. These bonds were held as property by those who had purchased them; and to them they stand as SO

much wealth, which they may keep or sell. But these bonds represent only an ownership of so much of the taxes or taxable property of the country, which the government engages to take and turn over to the bond-holders according to the terms of the bonds. These bonds neither increase nor diminish the volume of the nation's wealth; they simply show ownership. This ambiguity of ownership has its chief disadvantage in the double taxation it induces. The holder of a mortgaged farm, for example, is taxed for the entire assessed value of the farm, though he may be the owner of only half its value. Then the holder of the mortgage is taxed for his interest in the farm, or, as it is generally put, for the mortgage he holds; and so the farm is taxed double on that part of its value covered by the mortgage.

CHAPTER XXV.

THE DISTRIBUTION OF WEALTH.

282. Forces of distribution.-Wealth tends not only to constant fluctuations, but also to incessant movement. Like the tides and currents of the ocean, it obeys great attractions from above and from beneath, and yields to its surroundings as the waves yield to the resistless pressure of winds and coast-lines.

The forces which cause the grander movements of wealth are to be found:

1. In the personal desires and business needs of men;

2. In the general conditions and movements of communities and nations;

3. In the agencies and accidents of nature and history. The intense desires of men to amass property, to employ it profitably in business, and to secure it in safe and profitable investments, act as a complex and incessant force to draw wealth from hand to hand; to carry it to this place and that, and to gather it at the promising points of investment. Under the action of this set of forces, property is constantly changing hands and flowing to remote localities.

Communities and peoples influence the flow of wealth by their civilization, by their legislation, and by all the influences and characteristics which affect the safety and determine the enjoyment of wealth, or give honor and dignity to industry. Good morals, liberty, high intelligence, and respect for labor draw wealth as magnets draw iron.

Natural accidents-like the potatoe-rot in Ireland, the philloxera in the wine-growing regions of France, the presence of a sweeping epidemic like the yellow fever in the South, a season of drought as in India, floods and earthquakes, or wars and riots-often change for a time, if not permanently, the movements of wealth.

283. Classes of distribution.-We may properly distinguish between four great classes of distributive movement; as follows:

1. The primary distribution to the several producers, and especially the division of products between labor, capital, and the pay or profits of management.

2. The secondary movement or distribution made by the owners to consumption or to investment.

3. The territorial movement from place to place, as from city to country, or from country to city.

4. An international movement of wealth between nations or countries.

All the forces enumerated in the preceding section will be found at certain times affecting each of these four distributions.

284. Primary distribution.-Values are produced by the application of capital and labor to nature's gifts. If the capital and labor are furnished by the same owner, the product evidently belongs to him. But in most cases, in the modern industries, the capital is furnished by one party, and the labor is performed by others; and frequently the work is planned and directed by a third party. In these cases, the resulting products belong to the several parties contributing to the production; and to each in proportion to the cost, or value, of his contribution.

Labor, capital, and management, each claims its share of the new values produced by their joint efforts. But this is on the supposition that they are all partners in the work, that they all share in the risk of the enterprise, and that they have

not, in any other way, received the price or value of their contribution out of the aggregate product.

Commonly, the laborer is unprepared to share any risks, or even to await the completion of the final products; and often the capitalist declines to run any risks, and prefers a surer, if also a smaller, return in some fixed sum paid for the use of capital. Hence, in the modern industries, capital is frequently borrowed, and labor is commonly hired. The laborer accepts wages in place of his share of the products, and capital takes its share in interest money. If the manager is also a hired and salaried agent, he, too, takes his legitimate share of the values he has helped to produce, in his wages or salary.

In most great industrial enterprises, the use of lands and buildings is involved. These, too, enter usefully into the production; their values are in part consumed, and should reappear in the new values produced. The share which thus goes to land and buildings is taken in the form of rent. It is true that, in general, the land and buildings may be considered a part of the capital invested in the plant; but in agriculture, the land holds so prominent a place, that. men have chosen to recognize its rent as differing in its methods of computation, if not in its principles of right, from other forms of capital.

Should the new products chance to exceed the several sums thus set apart or paid for wages, interest, and rent, this surplus, whether little or much, evidently belongs as profit to the party, whether manager, or laborer, or capitalist, or stockholder, who assumed the risk. If all shared the risk, it belongs to all; but if only one party out of all assumed this risk, after paying the others their full and rightful shares, he may take as legitimate profit all that remains. If there had been a deficiency, he would have been held to make it good.

The primary distribution of wealth, therefore the distribution to the original producers and owners, -is into wages, including all salaries and sums paid for services; interest on cap

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