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The broad territorial division of labor is seen when these percentages are given separately for groups of states:

TABLE III

PER CENT OF GAINFUL WORKERS IN EACH CLASS OF OCCUPATIONS BY GROUPS OF STATES: 19002

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In Table IV the various occupations differentiated in the Census Report on Occupations have been classified somewhat in accordance with their natural ranking, the amount of skill they require, and the educational influence which they exercise over the people who follow them. In each element of the population the females

1 Twelfth Census Special Report on Occupations, 1904, p. lxxxvi.
• Special Report on Occupations, 1904, pp. xciv and cii.

MINING AND
QUARRYING

MANUFACTURES

PROPER

are found to a larger extent than the males in the lower grades of skill. For both male and female negroes, the percentage of those engaged in unskilled labor is very large. For the other elements of the population there is an upward trend out of this lowest grade.

TABLE IV

PERCENTAGE OF NATIVE AND FOREIGN BORN ELEMENTS AND NEGROES ENGAGED IN THE SPECIAL GROUPS OF OCCUPATIONS CLASSIFIED BY SEX: 1880, 1890, AND 1900

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Prepared by Mr. H. J. Dahl, of the University of Wisconsin, from the Reports of the Twelfth Census, and from Mr. W. C. Hunt's monograph, entitled, Workers at Gainful Occu pations, published in the Bulletin of the Department of Labor, No. 11, July, 1897.

QUESTIONS

1. Is the employee in a planing mill in a worse position than the old-time carpenter who has to do his planing by hand?

2. Is an insurance agent a producer of wealth?

3. What would happen if there should be too much saving?

4. When you spend money, do you ordinarily think of how hard you had to work to get it?

5. Why is Massachusetts the center of the boot and shoe industry?

REFERENCES

CARVER, T. N. The Distribution of Wealth, Chap. II.

FISHER, IRVING. The Nature of Capital and Income, Chaps. V and VI. HOBSON, J. A. The Social Problem, Book II, Chap. II.

MARSHALL, ALFRED. Principles of Economics, Book IV.

VEBLEN, T. B. The Theory of Business Enterprise, Chaps. II and III.

Valuable collateral reading will be found in recent bulletins of the

Census Bureau describing specific branches of production.

CHAPTER X

BUSINESS ORGANIZATION

THE dominance of "business" in our present social economy is so familiar and commonplace a thing that we are apt to forget its real significance. But it indicates, as nothing else does, the cleavage that exists in modern times between money making and the other things of life between exchange economy and domestic economy. Commerce and manufactures have each in turn been brought under the dominion of business enterprise; business methods and motives are also of the first importance in agriculture, although in this last field production for domestic use still continues and promises to continue hand in hand with production for the market.

"Business" means profit seeking. It does not cover so broad a field as does "production," nor is it quite the same thing as "production for the market." Business is acquisitive rather than productive, and while acquisition usually implies production, this is not invariably the case. The economic world, in its business aspect, is a world of buying and selling rather than of making and using things; it is a world in which prices, expenses, debts and credits, and contractual relations are the dominating things rather than the technical processes of production or the ultimate costs of production as measured in human effort and sacrifice.

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The Nature of Business Units. -Under competitive conditions profit seeking involves risk taking. The business world is made up of profit-seeking, risk-taking units, entrepreneurial units. We are apt to think of business units as concrete things, composed of individual men or groups of men. In an ultimate sense this is true, but for present purposes we may more profit

ably view business units as abstract things,

the centers or

foci of the contractual and other legal relations that bind the business world together. These relations are recorded and stated more or less fully in the accounts of each business unit; ultimately, however, they are matters of legal fact, and, as we shall see, the legal aspect and the accounting aspect of these relations are not always identical.

Without entering into either the general theory or the details of accounting, we may note that the simplest general way in which a business unit can be described by its accounts is by means of the income statement, which is a simple record of money receipts and money expenditures during a given period, such as a month or a year. Of more significance, however, in the present connection, is the balance sheet, which is the statement of the assets or resources and the liabilities or obligations of the business unit as they exist at a particular time. The income statement is a historical record, the balance sheet a photographic snap-shot. The following is a simplified form of balance sheet for a small manufacturing establishment:

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The itemized assets explain themselves, but the meaning of the various liabilities may not be so clear. In this statement all the items of the liabilities except "accounts payable" refer to the liabilities of the business unit, as an abstract entity, to the owner

1 The profit-and-loss statement is another important exhibit. It differs from the income statement in that it is a showing of the amount of sales in a given period compared with the expense of producing the particular things sold. Accurate profit-and-loss statements represent the highest achievements of modern accounting and cost-keeping methods.

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