than a steadily increasing population, provided the quality and frequency of exceptionality are not diminishing through an untoward reproductive selection.
How carefully should statesmen strive to prevent all hindrances to the successful operation of this fundamental law of social progress which is imbedded in the very nature of knowledge. With what forethought should we strive to prevent the wastes of nations. To the wastes of nations such as disease, ignorance, vice, crime, injustice, bad government, lack of opportunity for the exceptional and war, must we ascribe the hideous catastrophes which have wrecked successively one nation after another.
On account of the above law that there tends to be an annual increase in capital value of the new arts, and varying with the square of the population, we are led to the conclusion that herein lies the cause of interest. In those fields where inventions are being made most rapidly at any time, capital is needed. The savings in part effected by the new arts are paid over for the use of the capital. The existence of an interest rate which, eliminating the element of risk, probably varies between two per cent, and eight per cent, is the shadow of this law of progress which says in substance that the product of the annual work of the exceptional men tends to vary as the square of the population, and it follows that as population slowly increases, this surplus fund comes into existence out of which interest is paid. The above, then, seems to be the major cause of interest, and many known facts are in harmony with this theory. Interest has increased historically in times of rapid invention. It rules highest in industries where new inventions are taking place most rapidly. Interest is higher in new countries where population is rapidly increasing. Further, in the case of nations retrograding through disease, vice, bad government and decreasing population, commercial interest sinks to a very low figure. The elaborate agio theories of interest seem to me to throw no light on the cause of interest. A geometrical increase of wealth, which is so universal, must have an adequate cause. I am aware that there are very many important considerations not touched upon in the foregoing, but in a series of notes, this must of necessity be so.
