88 Do A. BA.RKBR constant. And accounts that chiefly depends. Looking of demand, factors in the capital it is upon the the supply of sum t?tal of curren? money for discounts at the question from the point of view however, we see that the determining are of a less simple discount market is, of commerce, always nature. The credit sold so to speak, the floating available for transfer at a minimum of expense from one industry 't? another. It will be particularly in sions of trade, and will times of sudden contraction. These factors nature less evident and less capable of demand for sudden expan- be equally at a discount in are of a statistical verification than the factors of supply and have there- fore attracted less atbention than they deserve. But if we look again beyond mere temporary fluctuations we shall' find that on the whole and in the long run the rate of discount will vary wi? the rate of interest. mined by the capital and the The ra? of opportunities amount of or being inves?d. Thus the present century there the average interest for the capital during the W&8 & rates of interest and again is de?r- investment of already invesbed first decade of marked increase in of discount despi?e the vast outpouring o? gold from the mines. If the facets usually regarded by business men as governing the rate of discount were alone considered no cause could be found for a rising rate of discount amidst floods of new gold. It may be argued theoretically that large additions to the gold supply bf the world
will necessarily enlarge the cash holdings of bankers and will thus enable them to give more loans, to in- crease current accounts and thus to reduce the rate of discount. It should not be overlooked, however, that, concurrently with an increase of cash and of curren? seeounts will eomea rise of prices whioh will
