[Letter] Oct.11,[1887?] [to F.H. Giddings]

Oct. 11, [1887?], n. p.

Dear Mr. Giddings,
       I enclose a few
sheets which you left.
Concerning terminology,
- most English writers use
'Profits' in the comprehensive
popular way. e.g. A. Smith's
'Profits of Stock', Mr. Sidgwick
says the shares in Distribution
are (1) wages, including
salaries (2) Profits of persons
employing labor, with capital
and sometimes land, (3)
payments for the use of
borrowed capital and land
including (a) Interest (b) Rent.
This comes very close to my
nomenclature, as at first
adopted, and would wholly
coincide with it if the
employer's own salary were
specifically referred to.
Walker also comes near to
this nomenclature, dividing
returns of industry into

 Rent of Land
 Wages of Labor
 Interest of Capital
 Entrepreneur's Profit

 From the last he deducts
a sum (in his Quarterly article,
not the text book) representing
the wage that the employer could
get by becoming a workman.
 Continental writers usually
exclude interest but include the
wage of the employer's labor. I
think M. Léon Walras makes
some analysis that on this
point is closer, but I have never
seen his book! In view of the
tendency of recent writers to reserve
the term profit for that which
is neither rent, interest, nor wages. How would
it do for the present to say Gross Profit
when we mean to include all that a business
man would have in mind, and Pure Profit
when we mean that which is entirely clear of
non-mercantile elements, as salary and interest?
Net Profit would be ambiguous, as it is a
commercial word, and would throw us at once
on the current practical nomenclature.

       Yours Very Truly,
            J. B. Clark