RELATION OF DISCOVERY AND INVENTION

steam railway investment has been nearly reached insome places, and in others the rapidity of investmenthas perceptibly slackened. Railroads have been an outletfor the investment of savings, and have tended to supplyfor them a good return. As the necessity for new railroadsbecomes less, this outlet diminishes, and the rates ofreturn as well as the rates of interest in general tend tofall so far as this one influence is effective.

But while the after effect of an old invention is to re-duce the rate of interest, it may, of course, be true thatnew inventions, often the result of the old, will be maderapidly enough to neutralize this tendency. It is chieflywhen there is a cessation in the world’s output of newinventions that the rate of interest is thus likely to fallback, but whenever invention is active the interest ratemay rise continuously. It thus rises and falls accordingas the introduction or the exploitation of inventions isactive or inactive.

The same principles apply not only to invention inthe narrower mechanical sense, but also to scientific andgeographical discoveries. The opening up of new minesin West Virginia, Canada, Alaska, South Africa, Australia and California caused a considerable depression in theimmediate income streams of those who engaged in theexploitation of the new territory. Consequently, the rateof interest in such instances tends at first to be veryhigh.

§5. The Present an Age of Invention

The present is an age of rapid invention, especiallysince the World War. President Hoover’s Committee onRecent Economic Changes finds the “tempo” of im-provement in industrial arts the most striking character-

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