or six per cent, on safe loans, compared with about four per cent, fifteen years ago. On $1,000 the lender now receives $50 or $60 interest, compared with $40 fifteen years ago. The higher interest rate has resulted as part adjustment for the advancing prices or the decrease in the value of money. But again, just as in the case of wages, the adjustment has not gone far enough, so that there has been a net loss to the lender.
In general, as a summary of the points that have been made, wage earners, salaried employees and cautious investors have lost, while with few exceptions owners of industry and the more speculative investors have gained. The first class includes all contractual incomes, like wages, salaries and interest, which are fixed by agreement; while the second class includes principally non-contractual incomes, like dividends on stocks, profits on real estate, factories, stores of goods, etc.—incomes not fixed by agreement, but depending upon the success of the business.
Some one remarks that the losses and gains have no particular social significance; some classes merely have lost while others have gained in the scramble for income. The answer is, in part, that whenever undue losses are brought upon large classes in society, resulting in hardships and discontent, the evils communicate themselves even to the classes not so directly affected. No class lives unto itself; discontent in one will work through the whole group. However, there are also evils which are distinctly social, affecting society as such, distinct from individual classes. These evils may be outlined briefly as follows:
1. The advancing prices have introduced an extraordinary risk element into business. Undue gains have been made by some classes and undue losses by others. Gains and losses have been fortuitous; they have not resulted from mere careful or careless management; they could not be definitely foreseen, and therefore planned for or avoided. "Who can tell whether prices in general will rise next year? Or the price of a particular commodity? Or wages? Or salaries? For the individual business, or person, is not a particular advance wholly an accidental matter? If with one class rising prices mean greater profits, then with another class do they not mean greater costs, which, too, are uncertain?
So far as possible, business men and people in general seek to eliminate risk from their daily relations, and they have invented insurance for this purpose. But you can not insure against rising prices, for they do not move by any definitely known law of averages. Economics can tell you why prices change, but it has not the data upon which to predict with reasonable accuracy any particular change.