THE THEORY OF INTEREST

they had become so by stinting for those five years, in-stead of receiving in advance, in the shape of food, cloth-ing, and other real income, the discounted value of therailroad.

This example was almost literally realized in the caseof the Mormon settlement in Utah . Those who went thereoriginally possessed little capital, and they did not payinterest for the use of the capital of others. They createdtheir own capital and passed from the category oflaborers to that of capitalists. It will be seen, then, thatcapitalists are not, as such, robbers of labor, but are labor-brokers who buy work at one time and sell its productsat another. Their profit or gain on the transaction, if riskbe disregarded, is interest, a compensation for waitingduring the time elapsing between the payment to laborand the income received by the capitalist from the saleof the product of labor.

§3. Interest Taking Survives all Opposition

Despite the persistence of the idea that interest issomething unnatural and indefensible, despite the oppo-sition to it by socialists and others who rebel against theexisting economic system, despite all attempts to pro-hibit interest taking, there is not and never has been inall recorded history any time or place without the exist-ence of interest.

Several centuries ago, as business operations increasedin importance, certain exemptions and exceptions fromthe ineffectual prohibition of interest were secured. Pawn-shops, banks, and money-lenders were licensed, and thepurchase of annuities and the taking of land on mortgagefor money loaned were made legitimate by subterfuge.One of the subterfuges by which the taking of interest

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