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To: Ilaine who wrote (28191)	1/29/2003 11:48:56 PM
From: Don Lloyd	Respond to of 74559

CB - >>Labor costs consist entirely of allowing the engravers to keep one half of the notes that they produce.<< Based on my understanding of independent contractor law, here's the flaw. You're simultaneously treating the engravers (by whom I assume you mean not just the people who engrave the plates, but the persons who print the notes, cut them up, package them, and so forth) as employees and independent contractors. If they are independent contractors, then they're just another expense. If they are labor, then there's also the cost of the paper, the printing, the machines, etc. Point being that wages and dividends aren't really the only categories. When I invent a fictitious company, I reserve the right to make it as simple as I want. The only employees are the engravers. $50M in real Federal Reserve notes come into the company in a year and $4M go out for paper and ink. The only way to prevent the $46M from piling up is to distribute it in the form of dividends, IFF it can accounted for as earnings or profit. The fact that the employee engravers can buy $100 worth of goods and services with the counterfeit notes they receive has nothing to do with the expense the company experiences. Likewise, the fact that the company markets the notes at $50 apiece is irrelevant to the expense that the company experiences, as long as more can be produced. If the company loses a note to fire, it can be replaced for the cost of paper and ink, which includes the labor costs in this case. If the workers were slave labor and not paid at all, but stole half the notes, the economic results would be the same. Regards, Don