THE THEORY OF INTEREST

ing facilities. In many cases, the money payment followsrather than precedes the enjoyment.

§4. Cost of an Article vs. Cost of Its Use

The only time discrepancy worth careful noting is thatwhich occurs when the money spent is not simply for thetemporary use of some object but for the whole object,which means merely for all its possible future uses. If ahouse is not rented but bought, we do not count the pur-chase price as all spent for this year’s shelter. We expectfrom it many more years of use. Hence out of the entirepurchase price, we try to compute a fair portion of thepurchase price to be charged up to this year’s use. Inlike manner, the statisticians of cost of living should dis-tribute by periods the cost of using a person’s housefurnishings, clothing, musical instruments, automobilesand other durable goods, and not charge the entire costagainst the income of the year of purchase. To any givenyear should be charged only that year’s upkeep and re-placement, which measures, at least roughly, the servicesrendered by the goods in question during that particularyear. The true real annual income from such goods is theequivalent approximately of the cost of the services givenoff by those goods each year.

Strictly speaking, then, in making up our income statis-tics, we should always calculate the value of services,and never the value of the objects rendering those serv-ices It is true that, in the case of short-lived objects likefood, we do not ordinarily need, in practice, to go to thetrouble of distinguishing their total cost from the cost oftheir use. A loaf of bread is worth ten cents because itsuse is worth ten cents. We cannot rent food; we can onlybuy it outright. Yet there is some discrepancy in time in

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