LABOR, INTELLIGENCE AND MONEY 93 



The great problems of the economics of production have 

 been solved. What interests us most to-day is the question 

 whether the advantages of the prosperity secured are equitably 

 divided among the contributors to it: — (1) capital; (2) super- 

 intendence; and (3) labor. 



1. The share to capital takes the form either of interest 

 or dividends. Now, we find that the rate of interest paid to 

 those furnishing money to industrial enterprises is decreasing. 

 Fifty years ago the average rate throughout the United States 

 was 8 per cent per annum. Now it is less than 5 per cent. 

 This general rule can be laid down, that the greater the con- 

 fidence, the higher and more perfect the industrial organiza- 

 tion, the lower the rate of interest. During the year 1896 

 the stability of American currency and the fundamental con- 

 ditions of American industrial development were regarded by 

 many with doubt; and money loaned as high as 20 per cent. 

 The investor is ever willing to take lower interest in exchange 

 for greater security and for a steadier and less precarious de- 

 mand for his funds, — and so that form of industrial organiza- 

 tion which furthers careful financing, opens wider markets, 

 and guarantees greater confidence and stabihty, is directly 

 in the interest of capital, although the rate of return on capital 

 is thereby steadily reduced. The dividends received by share- 

 holders are larger than the interest rates, because the risk is 

 greater, and, moreover, being partners and shareholders, they 

 are entitled to a larger share in the advantages of combina- 

 tion. Still, it is doubtful if the aggregate of dividends is 

 as large as the aggregate of interest. Moreover, dividends 

 are never absolutely certain, and they are never paid until 

 labor and superintendence have first had their share. 



2. Now, what is the position of the man of superior 

 intelligence ; for superintendence stands midway between capi- 

 tal and labor? Highfy developed organizations, resulting in 

 enormous volume of business, have increased the necessity for 

 intelligence, and as the supply of brains is not equal to the 

 demand, the price of brains is high. The turning over of in- 

 dividual businesses to combinations has caused the retirement 

 of old men to the advisory board for judgment and has made 

 way for young men for action. You ask, "What chances 



