_Profits defined._—Profits may be defined as the indefinite returns for exertion, including all risks, which any manager of his own or others’ industry secures by bringing his products into open market. In general the term includes the recompense for any kind of labor, however rendered, if the uncertainty of demand and supply belongs to the one who renders the service. Thus even the fees of a lawyer or a doctor come under the general principles of profits, whenever the conditions of payment in any respect depend upon success. If, on the other hand, such fees are stipulated sums for a stated service, they fall into the rank of wages. That the dividing line between wages and profits is not always clear is shown in comparing payment by the piece in manufacturing clothing, for instance, and payment by the hour for the same kind of work. In the payment by the piece, the stimulant of enterprise borders upon the nature of profits. In payment by the hour, that stimulant is wanting. Yet we are likely to consider the difference as simply a difference in method of estimating wages. Two men ditching side by side may work, one by the day and the other by the rod. It is possible even to combine the two systems of payment so as to involve both wages and profits. Farm hands in England have been paid a certain price per month, with a share in the profits, measured by the number of cart-loads of grain marketed. Clerks and agents frequently work for stipulated wages, with an added percentage upon the value of sales. Most farmers in estimating the results of a year’s labor count their own services, at the price of a hand, as a part of the cost of their products, and distinguish as profits the surplus of product above all expenditures. Thus a farmer may estimate as outgo the interest on capital invested, the wear and tear of machinery, the produce consumed upon the farm, the taxes paid to the government, and the wages to all who labor, including himself and his family. Any return from his products beyond enough to meet these outgoes he will consider profits. These will reward him for extra foresight and contrivance in management and marketing, as well as risk arising from possibility of failure in his plans, destruction of his crop or stock, fluctuations in price, and uncertainty of collection for his sales. Such risks and exertions every independent worker assumes. Usually the exertions are impossible to the inexperienced, and the risks cannot be taken without accumulated capital or a credit established upon well-known character and ability. This fact naturally limits the number of competitors for profits. The effect is clearly illustrated in the difference between an ordinary farm hand and the renter of a farm. Few farmers would encourage the best of their farm hands to take the burden of risks and care implied in renting. The successful farm renter requires abilities and means, gained only by experience and accumulation.