Chapter 19. Saving and Production as Affected by the Rate of Interest
1. The savings of the people of the United States are nearly a billion dollars a year. What and where are they?
2. What are the main social conditions necessary to saving?
3. What influence has commercial morality on saving?
4. Do savings-banks and insurance companies stimulate saving, or do they exist because of a disposition to save?
5. What influence has the formation of joint-stock companies on saving?
6. Will you save more or less if the rate of interest falls?
7. Distinguish between hoarding and saving.
8. A woman cut the wool from a sheep's back, spun and wove it by old hand-methods, and within twenty-four hours wore the dress made of it. Is more or less time needed in production with the best machinery and processes?
9. Ricardo said that on account of the cheapness of food in America there was less temptation to employ machines than in England, where food was high. What is the fact about this temptation in America?
Note.—The older abstinence theory of interest is given by F. A. Walker, Political Economy, Secs. 87-93. A noteworthy advance was the able article, by T. N. Carver, in Quarterly Journal of Economics, Vol. VIII, p. 40 (1893), "The Place of Abstinence in the Theory of Interest." A number of writers have written (fallaciously, in our judgment) on the "fallacy of saving," arguing that the capital-market easily becomes glutted; the contrary view is well presented by Cassel, The Nature and Necessity of Interest (1903), pp. 96-157, in chapters on what he calls "The Demand for Waiting," and "The Supply of Waiting."