Third, the business man, having paid all of the necessary expenses of doing business (the running expenses and the fixed charges), has left a fund (net income) which, roughly speaking, is the profits of the business. Out of this net income, dividends are paid, improvements and extensions of the plant are provided for. Fourth, the careful business man increases the stability of his business by adding something to his surplus or undivided profits. The operating statistics of the United Steel Corporation for 1918 illustrate the principle: 1. Gross Receipts $1,744,312,163 Manufacturing and Operating expenses including ordinary repairs 1,178,032,665 --------------- 2. Gross Earnings $ 566,279,498 Other income 40,474,823 --------------- $ 606,754,321 General Expense, (including commission and selling expense, taxes, etc.) 337,077,986 Interest, depreciation, sinking fund, etc. 144,358,958 -------------- 3. Net Income $ 125,317,377 Dividends 96,382,027 -------------- 4. Surplus for the year $ 28,935,350 Total surplus 460,596,154 Like every carefully handled business, the Steel Corporation,-- 1. Paid its running expenses, 2. Paid its fixed obligations, 3. Divided up its profits, 4. And kept a nest egg. The effectiveness of such means of stabilizing property income is illustrated by a compilation (published in the _Wall Street Journal_ for August 7th, 1919) of the business of 104 American corporations between December 31, 1914, and December 31, 1918. The inventories--value of property owned--had increased from 1,192 millions to 2,624 millions of dollars; the gain in surplus, during the four years, was 1,941 millions; the increase in "working capital" was 1,876 millions. These corporations, representing only a small fraction of the total business of the country, had added billions to their property values during the four years. These various items,--up-keep; depreciation; insurance; taxes; interest; dividends and surplus,--are recognized universally by legislatures and courts as "legitimate" outlays. They, therefore, are elements that are always present in the computation of a "fair" price. The cost to the consumer of coffee, shoes, meat, blankets, coal and transportation are all figured on such a basis. Hence, it will be seen that each time the consumer buys a pair of shoes or a pound of meat, he is paying, with part of his money, for the stabilizing of property.