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CHARTS FOR LEARNING THE DAILY DAF

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Bava Metzia Chart #16

Bava Metzia Daf 68a-b

THE MECHANICS OF AN "ISKA"
KEY:
P = Pikadon
M = Milveh		 (A)
THE INVESTOR'S SHARE		 (B)
THE MANAGER'S SHARE
THE MISHNAH'S ISKA
(FORBIDDEN)
1a) DIVISION OF LIABILITY 1/2 P 1/2 M
1b) DIVISION OF PROFIT 1/2 1/2 (1)
RAV ILISH'S 1ST ISKA
(PERMITTED)
2a) DIVISION OF LIABILITY 2/3 P 1/3 M
2b) DIVISION OF PROFIT 1/2 1/2 (2)
RAV ILISH'S 2ND ISKA
(PERMITTED)
3a) DIVISION OF LIABILITY 1/2 P 1/2 M
3b) DIVISION OF PROFIT 1/3 2/3 (2)
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FOOTNOTES:
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 P - The part of the investment for which the *investor* will sustain the loss of principle is considered a "Pikadon" (deposit). This is because we view it as if that part of the investment has not left the domain of the investor. The manager is simply a Shomer Pikadon, who cannot be held responsible for decreases in value.
M - The part of the investment for which the *manager* will absorb the loss of principle is considered a "Milveh" (loan). This is because we view it as if it belongs completely to him (like the money of any loan) during the period of the Iska. The manager must sustain any loss that occurs to this portion if it decreases in value, since he must return to the investor the original amount that he received (as in the case of any loan).

(1) In this case, the manager receives a share of the profit proportionate to the share of the Iska that he accepted as a loan and no more. This proportion of the profit is his by right (like any profit made with funds received as a loan). Thus, it turns out that in return for receiving this loan from the investor he is managing the investor's money gratis. This is prohibited due to Avak Ribis.
(2) In this case, the manager receives a share of the profit that is *greater* than his share of the investment (i.e. the part of the investment which is on loan to him). The extra profit that he receives are his wages for managing the money of the investor. Since he is not doing a free service for the investor (who lent him money), this is not Avak Ribis.

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