in no other way. The whole
outfit becomes worth more than it was. The increase in monetary value
gauges the claims of the capitalist. If the stock of goods has grown
generally larger, and if prices have fallen, the claim of the
capitalist will fall short of equaling the actual increase of the
merchandise.

The increase in goods of different kinds is, of course, unsymmetrical.
If the man is a manufacturer, his mill and his water power have
probably not increased. He may have some more machinery, and he has
more raw materials and more goods, finished or unfinished, than he had
when he took his last inventory. If he has not more goods of these
kinds, he has something that represents them; and the effect on his
fortunes is as if the mill had stretched itself, and as if the
machines and other capital had multiplied, all in the same ratio.

The man figures his gains in real wealth by the use of money. At the
end of the year he makes a list of all his goods, attaches prices to
them, and sees what the value of the stock has become by the year's
business. He compares the total value in money of the goods on hand in
January, 1907, with that of the stock of January, 1906. If he has
bought and sold for cash only, and if during the year he has drawn for
his maintenance only what he has earned by labor, the excess of value
on hand at the beginning of the year 1907 informs him what his capital
has earned during the preceding twelve months.

_The Effect of Changes of Price on the Claims of Capitalists._--If
prices have remained stable, the earnings of the capital as expressed
in money will accurately correspond with the earnings as computed in
commodity. It is as if the five per cent increase of the sugar and the
flour of our first illustration, or of the mill and the machinery of
the second, had taken place. It could then, by a sale, be converted
into a five per cent increase in money. By selling the stock at its
market value the merchant could realize five per cent more than the
original stock cost him.

If money has gained one per cent in its purchasing power, or if prices
at the end of the year are by so much lower, the inventory will show,
in terms of money, only a four per cent gain. Now, the real increase
of concrete capital is still five per cent, and that, by the law of
interest, is what the capitalist can claim in commodities. This claim
is met by an actual payment in money of four per cent. Give to the
capitalist, in Ja