SOME COMMON PITFALLS

was excused suggests the true idea of interest as an indexof impatience. It was conceded that, although a loanshould be professedly without interest, yet when thedebtor delayed payment, he should be fined for his delay(morn), and the creditor should receive compensationin the form of interesse. Through this loophole it becamecommon to make an understanding in advance by whichthe payment of a loan was to be delayed year after year,and with every such postponement a fine was to becomepayable.

Some of the Protestant reformers, while not denyingthat interest taking was wrong, admitted that it was im-possible to suppress it, and proposed that it should there-fore be tolerated. This toleration was in the same spiritas that in which many reformers today defend the licens-ing of vicious institutions, such as saloons, gamblingestablishments, and houses of prostitution.

Today interest taking is accepted as a matter of courseexcept among Marxian socialists and a few others. Butthe persistent notion that, fundamentally, interest is un-justified has given the subject a peculiar fascination. Ithas been, and still is, the great economic riddle.

§4. Naive Productivity Explanations

One of the most common superficialities in this fieldof thought is the naive idea that interest expresses thephysical productivity of land, or of nature, or of man.When the rate of interest is 5 per cent, nothing at firstthought seems more plausible than that this rate obtainsbecause capital goods will yield 5 per cent in kind. Itis alleged that because fruit trees bear apples or peaches,and because a bushel of wheat sown has the power tomultiply into 50 bushels, and because a herd of cattle

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