Publisher's Synopsis
This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1883 edition. Excerpt: ...the yield of any particular investment, and in taking measures to ward them off. Thirdly, there seems to be a general tendency in the members of any society to estimate the risk of investments in a foreign country more highly, ceteris paribus, than that of home investments; owing to their greater confidence either in the morality or in the good fortune of their own community. The extent to which each of these causes will operate, as between different countries at different times, will of course, vary indefinitely. We can only lay down as a general rule, that the yield of capital in any one country (A) does not tend to differ from the yield of capital in any other country (B) which is in permanent commercial relations with the former, by an amount more than sufficient to compensate for the extra risk of investments in B to the inhabitants of A, as estimated by the latter. Thus any new' cause that operates primarily to increase the supply of capital, and consequently to lower the rate of interest, in A, tends to have its effect extended over the whole aggregate of countries with which A is in commercial relations; the intensity of the effect being, of course, diminished in proportion to the extension of its range. 1 It should be observed that experience shows another way in which a fall in the rate of interest tends to bring about a subsequent rise: i.e. by leading to rash speculations, which result iu a destruction of capital. This effect, however is due to an irrational impatience of interest below a customary level, which cnn hardly be taken into account in a theory of competitive distribution. 6-So far we have considered interest as the share of vx; produce expected by the capitalist as such; since it is the expectation of..."
