SOME ILLUSTRATIVE FACTS

interest was very low, government borrowing at 2 per cent, andprivate people at 3.” 1

On the other hand, among communities and peoplenoted for lack of foresight and for negligence with respectto the future are India, Java , 2 the negro communitiesboth North and South , 3 the peasant communities ofRussia , 4 and the North and South American Indians, bothbefore and after they had been subjugated by the whiteman. In all of these communities we find that interest ishigh, that there is a tendency to run into debt and todissipate rather than accumulate capital, and that theirdwellings and other instruments are of very flimsy andperishable character.

It may well be that there are other causes at work

1 The Sociological Theory of Capital, pp. 128-129.

3 My colleague, Professor Clive Day, finds that interest rates in Javahave advanced rather than declined since the early years of the twen-tieth century. He cites as the best source for recent conditions theGreat Investigation (Onderzoek naar der mindere Welvaart de inlandscheBevolking op Java en Madoera . Batavia, 1912, IX bl D1 II. 1, page 66).The report states that on small loans under 5 florins unsecured, theannual rate runs to several hundred per cent. On secured loans, say of25 florins more or less, the rate varies from 36% to 60%. These rates arenotably higher than his estimate of 40% quoted in The Rate of Interest ,p. 292.

3 Professor J. S. Lawrence, of Princeton University , informs me thatneedy negroes often pay at the end of the week, $7.00 for $5.00 bor-rowed at the beginning of the week, or more than 40% per week.

4 See Bloch , Ivan, The Future of War. Translated by R. C. Long. NewYork, Doubleday and McClure Co., 1899, p. 205. It appears thatthe peasant would sell a promise to labor a short time in the futureat one third the current wages! See also Lanin (pseud.), RussianFinance, Fortnightly Review, Vol. LV, February, 1891, pp. 188, 190,196, for typical and extreme cases. Inostranietz, L’Usure en Russie ,Journal des ficonomistes, Vol. XVI, Ser. 5, 1893, pp. 233-243, states thatthe rates paid by poor peasants to well-to-do peasants are frequently5 per cent per week.