rate of 2fr. 80. At the end of December, 1897, the price was 499fr., at the end of December, 1906, it was only 463fr., i.e. a decline of 35fr. The gross dividend is 14fr. In nine years it has brought in 126—35=91 fr., i.e. 1ofr. 11 per annum, or 2.02 per cent. But this is subject to taxation, and if we again deduct the actual tax, the holder's dividend is reduced to 12fr. 46. In nine years he has received 112fr. 14-35-77fr. 14, yielding him 1.54 per cent. per annum. This is the dividend obtained by the holder of a share in the issue of the Crédit Foncier of 1895. At a number of election meetings, and even in the Chamber of Deputies, the income tax is represented as an instrument destined to make railway shareholders disgorge, the shareholders being pictured as vampires which-at the expense of the public-appropriate enormous dividends. The holders of shares in the Compagnie du Nord are among those who are thus attacked. But on examining the illusory dividends received by them from 1898 to 1906, this is what I find. At the end of December, 1898, the stock of the Compagnie du Nord stood at 2,110fr., at the end of December, 1906, it had declined to 1,775, i.e. a fall of 335fr. Now in the eight years from 1899 to 1906, inclusive, the total dividend amounted to 550fr., which, after deducting 335fr., leaves 215. The purchaser of a share at the end of December, 1895, has therefore received 26.87fr. per annum, which amounts to Ifr. 27 per cent., having regard to the purchase price. The income tax of 4 per cent. on 550fr. yields 22fr., but since the income was only 215fr., it actually amounts to 10 per cent. The holder of stock may have done even worse by buying stock at the end of June, 1900, at the price of 2,400fr., if he were forced to sell on May 30th, 1907, at the price of 1,769fr.—a loss of 631fr. Supposing that he drew the whole of the dividends from 1900 to 1906, he has received 472fr. in dividends and his account shews a loss of 159fr. Nevertheless he has had to pay 4 per cent. upon this amount of 472fr., in addition to the lump sum assessed on the nominal capital of the securities and the annual tax of ofr.20 upon their capital value assessed upon their average price during the preceding year, SO that it is necessary to add, in round numbers, another 5ofr. to his loss. This investment in a first class security has therefore resulted, not in a profit, but in an annual loss of 28fr. 50. Take the case of an investment in real property. In some parts of Paris this class of property has depreciated 20 or 30 per cent. in less than ten years, and this should be deducted from the income. And do not upkeep, rebuilding, and improvements frequently represent several years' income? As proprietor of an agricultural estate, am I not continually obliged to undertake building, repairs and work of all kinds? If my income from the property is 3,000fr. and I build new stables at a cost of 6,000, am I not deprived of my income for two years? Income is only a slice of capital, cut off for convenience in accounts, but it cannot be separated from it; profit and loss can no more stop at a fixed point at the end of a year than the physiological condition of the human body can undergo a sudden change. In order to arrive at a correct statement of income, it is necessary to take into account the rise and fall in the value of capital as well as the nominal rate of interest. The examples that I have given prove that capital does not increase automatically by means of compound interest, as Socialists are pleased to assert who, instead of looking at the facts, only seek for arguments in support of their system. THE DISTRIBUTION OF INHERITANCES IN FRANCE Division of inheritances according to their importance -Analysis-Inherited shares compared with undivided inheritances-Decrease in the number of greater shares and increase in the number of shares less than 100,000 fr.-Number of inheritances in relation to number of deaths-Conclusions. SINCE the Finance Law of February 25th, 1901, the details of inheritances after deduction of liabilities, are available. Those who introduced and carried this law include a number of men who, in the absence of adequate information with regard to the previously ascertained facts, imagined that this inventory would supply them with a formidable collectivist argument in favour of the expropriation of the land, of minerals and of all the means of production and exchange. The registry places inheritances in thirteen graduated classes, according to the total amount of their net assets. The figures for 1907 are as follows:-1 1 Estates which have paid duty more than once are only counted once, on the occasion of their first declaration. The small estates of from 1 to 2,000 fr. are 223, 130 in number, i.e. 55 per cent., with net assets of 162 millions, i.e. rather less than 3 per cent. of the whole. The number of people with small inheritances is very large, while the total of their inherited property is restricted. But 562 million francs have to be distributed among 114,695 persons in the series of estates ranging from 2,001 to 10,000 francs. This is a new series representing 28 per cent. of the number of inheritances, and 10 per cent. of the total net assets to be distributed. If one confine oneself to this series, this numerous class is a class of capitalists with a keen desire to increase their capital. Inheritances of between 10,001 and 50,000 francs are 47,967 in number, i.e. I per cent., representing 1,014 millions. If one includes the series between 50,000 and 100,000 francs, i.e. 9 per cent., one finds a total of 40 per cent. for the two series or 18 per cent. of the total. If we take the large fortunes of from a million to 50 million francs, we find 534 estates, with a total of 1,231 millions, i.e. 22 per cent. of the total. There was no estate above 50 millions in 1907. But these estates are divided, and if (after making allowance for charitable bequests) we compare the number of portions with the number of estates, we find: Except in the last series, the number of portions is smaller than the number of estates: the estates are divided and the heirs fall back one or two classes-a movement which is the converse of concentration. In the case of estates, however, of 250,000 francs and under the number of portions. is higher than that of estates to be distributed: The This follows from the same tendency. division of large fortunes has driven the beneficiaries back into the lower series, so that they add to the number of portions into which the lesser estates are divided. This movement is the exact opposite to that which is alleged by Karl Marx and his followers. A comparison of the total assets of estates devolving by succession and of the amount of the portions confirms this explanation : I 500,000 fr 234,476,509 Amount of 743,949 77,239,707 389,140,686 236,461,995 501,989,516 314,348,078 579,240,211 431,094,157 250,000 fr. to 500,000 fr. 602,865,879 573,111,349 In every instance the total of the portions is less than the total of the estates. The effect of division has been to cause the amount of capital to decline class by class down to the class of estates of from 100,001 to 200,000 francs. Below this class the total capital increases in each class concurrently with the number of portions; --- |