354 THE POPULAR SCIENCE MONTHLY. 



inunity with a heavy tax for bankruptcy. That administrative 

 ability is much rarer than opportunities for its exercise is clearly 

 one of the causes for low interest, and for the addition thereto 

 which bankers and other lenders must charge in order to cover 

 commercial risks. 



The third influence bearing on the rate of interest is the com- 

 parative scarcity or plentifulness of capital. This is determined 

 not only by the amount and efficiency of capital productively em- 

 ployed, but by the ratio of reproduced capital which is saved. 

 Taking it by and large there seems no reason to believe that hab- 

 its of thrift are losing their hold on the people of this country. 

 As will shortly be seen, the returns of savings-banks bear this 

 out. If persons of small capital are exposed to a reduction of in- 

 terest from the safest forms of investment, this very liability may 

 lead to greater thrift among those of forecasting mind. Where 

 accumulation is quite too small for its income to yield a living, it 

 is the capital sum that is looked to as a resource against a rainy 

 day. 



Lastly, as to the soundness of the currency. While " the con- 

 sensus of the competent " holds that there is the menace of finan- 

 cial derangement in the legal-tender decision of the Supreme 

 Court of the United States, and in the silver legislation of Con- 

 gress, neither of these seems as yet to have affected the rate of 

 interest. To provide against the contingency of a depreciated 

 currency, whether fiat-paper or silver, now sought to be artifi- 

 cially bolstered in value, certain loans of large amount have re- 

 cently been effected in Wall Street with the express stipulation of 

 payment in gold coin. The precaution is significant. 



Refraining from any attempt to weigh and balance others of 

 the multifarious influences working for the depression or elevation 

 of the rate of interest, it may be enough to say that the prevailing 

 impression among both economists and men of business is that 

 downward influences will probably continue the stronger in the 

 years of the near future. This means hardship to many worthy 

 people whose time of competence it postpones indefinitely ; hard- 

 ship, too, for the class who, unable to accept business risks or 

 manage business investments, must needs accept less and less re- 

 turn from a little capital. Small comfort for them to hear that 

 prices are falling, so that their loss of income is largely or wholly 

 offset; does not rent rise constantly, and does not the area of 

 " necessities " expand the while with an imperiousness scarcely to 

 be withstood ? But, turning from cases of this kind, which are 

 after all comparatively few, the reduction of the rate of interest 

 paid by secure investments is in the main a benefit ; it means in- 

 crease in the shares of produced wealth divisible as wages and 

 profits, if it also means more for rent. It indicates that the 



