munity 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 comparative scarcity or plentifulness of capital. This is determined not only by the amount and efficiency of capital productively employed, but by the ratio of reproduced capital which is saved. Taking it by and large there seems no reason to believe that habits 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 interest 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 consensus of the competent" holds that there is the menace of financial derangement in the legal-tender decision of the Supreme Court of the United States, and in the silver legislation of Congress, 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 artificially bolstered in value, certain loans of large amount have recently 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; hardship, too, for the class who, unable to accept business risks or manage business investments, must needs accept less and less return 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 increase in the shares of produced wealth divisible as wages and profits, if it also means more for rent. It indicates that the
