Middletown transcript., 1873-02-15

which tho difference OF proht OF cnpita
depends, perhaps would DO impossible
Those which seem to nc Of the nort gen
cral importance are
!. Fertility If Land lie who wishes
to borrow money to invest in agriculture
could aircrd to pny higher interest, whcr
the land produced fifty bushels to the acre
than when j, produced twenty FIVE bushel,
to the acre provided be could procure the
land for the purchase money.
.. Prodnc'ir,acss Of Industry. The
use Of natural agents adds greatly to the
value annually produced from given a
noun, Of capital This will tend to raise
the price Of capital; since n man will give
more for money to invest in machine
which will produce one thousand dollars a
year than in one which will produce only
Ave hundred dollars. II il true that the
influx Of capital will tend to bring any
one brach Of industry. in process Of time,
20 tho general level. Blu, that progress
sivc increase Of proiuc,ivencss, which be-
longs TO the progress Of civilization, tends
to keep up the price Of capital, which
would. otherwise. fall unreasonably low.
3 The Dmand for Exchange. The
greater the demand for exchange, the
moro profitable must be that capital which
is inverted in exchange. In town where
mercantile business is brisk, and man
can sell all his stock Mt good profit two
or three times in the course Of year.
money will bear a higher interest thnn in
n town whore exchanges are slow and he
must keep his goods on hand for year or
two.
II. Thc Ratio beireen .Sapp'y and
D,mu3. This produces the same effect
upon the rate of interest as upon every
thing else Whatever be the prof, Of
capital il the supply be- very small, the
price will rise il proportion; since he.
who rs cmrl Sing it 1t high price can
mnh a small profit, will rather SO employ
it, than. ly doing without it, make no
prof At ali Thus, ifby the use Of one
thousand 'l,llars tnr year, | could realize
aye hundred dollars. might be willing 10
ply ,wo hunlr.d iar the u>c of il. rather
fiAu not 10 have ~ for in the latter ease
| should gain nothing. II then there were
hut littlr capital IN the market, and many
persons were NJ willing I, give thi. rate Of
interest ns myself | should he obliged to
give it But il, on the contrary, there
wcrc many persons drsirous of lending,
and there was mu u capital in the market,
AMI were ,hr only person who would be
willing TO give this interest they would
nuleriil each other aud | should he able
u procure il ot hin who would loan il TO
me at Tie low i rate Hence. the r1te Of
money Will vnry IN any country. accord
ing - tha riIgrt pf tlrse two circumsian.
cc> fN portion Of th, treatise Is omit
tea here. n MT being specially relevant
TO the subject in hand
From what has been said, we come to
,h' following general conclusions:
That other thing, heipc equal. inter
~ will b. hish, when the risk j. great
anl law whtn the risk i. small
That n,crrs, viii ba high. when the
profit Il capital is great; and low when
the ri>k /, small
" Tint both Of these affect each other.
within certlin Limit, tia, i. when profit
/, great. If 'bo r.k ~ alsa great. interest
viii h. yary high because the increase Of
ri,k diminish, the supply
But WHOM profit = low aud risk is
gr II, iIsre will ba matc than can be
s,inai y u.c, aul, htnee, men could no,
NJ pralitoi ~ borrowing
: And hence tic rae af interest will
be always affected by every circumstance
whirh Affect, either rick or prof, Of caIi-
tai Hence w. see tha, in or.
itr II firm ans rotrce, opinion resp citing
rhe condition rf Tbs country from the pre-
>Dut iatP of interest. W. must always sfck
fnr IT. ran-,s oF that rate instead II De.
c.diae ffHm the mefr rate it, r. E"
Naw, gentlemen &C the Senate and
I!oasa of p,legatcs u Delaware, nov
c,w, III paw of this article, quoted far
your constellation Please give it your
serious attention Say, this eminent wri-
t.r;
l. i almost unnecessary, after what
ha- bsen alr,aly advanced, - state tia,
in the view Of thc Political Economist.
laws regulating tht rate Of interest are in.
.jurious 10 the prosperity OF country
Some Of the reasons for this opinion are
the foll5wing:
| Such laws violate the righ, of prop
ufy \ man has the same right 10 the
market price Of his capital in money, as
be has 10 the market prico of his house,
hi horse, hi, ship or any other Of his pos
sessions.
} The ra' price Il capital cannot b.
aSrl II law, any more than the real price
II four, or iron, or any other commodity
There is, therefore, no more reason for
assigning to i; fixed value than there is
for assigning fixed value to any other
commodity,
3 The price Of capital, or money Is
really more variable than that OF any 9th :.
cr commodity. Most other commodities
have but one sou:ce Of variation. namely /:
use on profit. But capital in the form of
money. i liabl" to two sources of yaria
tiou, risk aud use These vary, at differ