OUB NATIONAL PROSPERITY 373
are always a property income, but in cases where an individual who uses property is also the owner, his real income appears on its face as wholly a service income, although it arises through the two different sources. Here are two men in all respects equal, and laboring upon two properties in all respects alike. But the one rents his property and the other is an owner. The books of the one will show that rent is paid to some third party to whom the rent is a property income. But the books of the other will have no such rent item. However, his income will be larger than that of the first man by an amount equivalent to the rent and this amount of his income is a true property income even though it is produced by his labor. Although his labor is precisely the same as that of the first man, and applied upon a precisely similar prop- erty, yet he has the advantage in the unequal ownership of opportunity. In a Utopian state in which opportunity was equally divided, it might be weU to change our definitions, saying that there was no property income and that service income was the actual product of the labor. But in the present non-utopian state the distinction is a necessary one, since our customs make possible the ai^ropriation of a part of the labor product.
Various estimates have been made of the ratio between property in- come and aU income. Nearing estimates that from five to ten billion dollars is the amount annually paid to owners of property in the United States. Five per cent, on all the wealth accounted for by the Census would yield a total property income for the year 1913, of about ten bil- lion dollars. That the mean rate on this property is 5 per cent, is, of course, an assumption. The total annual income for 1913 is twenty- eight billion dollars as listed on Fig. 2. Bearing in mind that hear- ing's estimate does not include income on property used by the owner, it would probably be near the truth to say that a third of all income was property income, and two thirds service income. Other estimates have placed the property income at 40 per cent, of the total.
Beyond the fact that property incomes come mostly to the wealthy we are able to say little about the relative distribution of the two kinds of income. Among those with small income there will here and there be cases of income which is nevertheless derived from property, such as the poor widow owning a few thousand in railroad shares. And among the wealthy there will here and there be cases of large income derived from service, such as managers, corporation presidents, and famous actors and painters. We must remember, however, that many high salaries which are apparently service incomes, are in reality property incomes which take the form of high salaries in order to conceal inor- dinately high returns on certain properties of an unusually monopo- listic nature. But on the whole the btdk of property income will go to the wealthy because the wealthy are the owners of the bulk of property.
�� �
