THE THEORY OF INTEREST

ferent income situations in which the incomes of twoyears were equal. A poor man—poor in both years—would be situated near the origin, and a rich man farfrom the origin. A man who has less income this year thanhe expects to get next year would be situated above this

This Tear's Income

CHART 24

Income Position this Year and Next Year Represented by Point (Pi).

midway line, his latitude (meaning next year’s income)being more than his longitude (meaning this year’s). Ifwe move his position sufficiently to the left, so as to re-duce his longitude (this year’s income), he will be like aman stranded on a polar expedition—with rations runshort, though he might be assured by radio of plentiful

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