Originally
the financier supplied the capital, and the managing partner conducted
the business. They would share equally in the profits. If the venture
failed, the financier would sustain the loss.
Since
financiers were not eager, the Rabbis enacted that the managing partner
sustain a share of the losses, corresponding to his share of the
profits. Now half of the capital is essentially loaned to the managing
partner, since he is responsible to return it intact. Thus the managing
partner receives profit from his half of the capital and manages the
financier’s half for free. This free service constitutes interest, so
the managing partner must also receive wages.
