pelled to sell on "price," even without the added difficulty of our depreciated and ever fluctuating currency. This is but one of the innumerable problems "that no human ingenuity could solve."
Another, and, indeed, the most difficult element in business enterprise is b"risk." As has been pointed out, if not entirely overlooked, it has been completely ignored, and, yet, it is one of the chief considerations of all Political Economists. It has been definitely determined to be an absolutely essential consideration by the Supreme Court, even in rate cases concerning public utility monopolies. Adam Smith, again and again, treats of it with the greatest clearness. It would require much space to quote all he says on the subject. A few passages will suffice. He observes:[1] "Profit is so very fluctuating that the person who carries on a particular trade cannot always tell you himself what is the average of his annual profit. It is affected not only by every variation of price in the commodities which he deals in, but by the good or bad fortune both of his rivals and of his customers, and by a thousand other accidents to which goods when carried either by sea or by land, or even when stored in a warehouse, are liable. It varies, therefore, not only from year to year, but from day to day, and almost from hour to hour. * * * The lowest ordinary rate of profit must always be something more than what is sufficient to compensate the occasional losses to which every employment of stock is exposed. It is this surplus only which is called neat or clear profit. What is called 'gross profit' comprehends frequently, not only this surplus, but what is retained for compensating such extraordinary losses. * * * The chance of loss is frequently undervalued and scarce ever valued more
- ↑ Adam Smith's "Wealth of Nations," Book I, Chap. IX.
